DATED 21 August 2003
XXXXX COMEX SEAWAY FINANCE B.V.
(as Indemnifier)
- and -
XXXXX OFFSHORE S.A.
(as guarantor)
- and -
CITIBANK N.A.
DEN NORSKE BANK ASA
HSBC BANK PLC and
NORDEA BANK NORGE ASA,
Grand Cayman Branch
(as banks)
- and -
DEN NORSKE BANK ASA
(as facility agent security trustee
and issuing bank)
USR44,000,000 SECURED
BANK GUARANTEE FACILITY AGREEMENT
[Graphic omitted]
XXXXXXXXXX XXXXXXX Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx XX0X 00X
Telephone x00(0)00 0000 0000
Fax x00(0)00 0000 0000
DX Xx. 00 Xxxxxxxx Xxxx
xxx.xxxxxxx.xxx
CONTENTS
Page
1 Definitions and Interpretation............................................2
2 The Guarantee Facility...................................................19
3 Conditions Precedent and Subsequent......................................22
4 Representations and Warranties...........................................32
5 Currency and Counter Indemnity...........................................35
6 Authority to pay.........................................................36
7 Interest.................................................................38
8 Guarantee and Indemnity..................................................38
9 Fees.....................................................................43
10 Security Documents.......................................................43
11 Agency and Trust.........................................................44
12 Covenants................................................................54
13 Earnings.................................................................67
14 Events Of Default........................................................67
15 Set-Off and Lien.........................................................72
16 Assignment and Sub-Participation.........................................74
17 Payments, Mandatory Prepayment, Reserve Requirements and Illegality......76
18 Communications...........................................................79
19 General Indemnities......................................................80
20 Miscellaneous............................................................82
21 Law and Jurisdiction.....................................................87
SCHEDULE 1...................................................................88
The Banks, the Commitments the Guarantee Commitments and the Proportionate
Shares................................................................. 88
SCHEDULE 2...................................................................89
The Shipowning Guarantors and the Vessels...............................89
SCHEDULE 3...................................................................90
Financial Covenant Calculations.........................................90
SCHEDULE 4...................................................................92
Form of Transfer Certificate............................................92
APPENDIX A...................................................................96
Issue Request...........................................................96
APPENDIX B...................................................................97
List of Encumbrances Notified to the Agent Pursuant to Clause
12.1.1 of the Agreement.................................................97
APPENDIX C...................................................................98
PART A..................................................................98
Subordinated Note.......................................................98
PART B.................................................................102
Subordinated Loan Agreement............................................102
APPENDIX D..................................................................106
Disclosure Letter......................................................106
APPENDIX E..................................................................108
Liquidity Line.........................................................108
APPENDIX F..................................................................112
Consolidated Accounts Receivable Ageing and Collection Status
as [ ] at for Xxxxx Offshore S.A................................... 112
GUARANTEE FACILITY AGREEMENT
Dated: 2003
BETWEEN: -
(1) XXXXX COMEX SEAWAY FINANCE B.V. which is a company incorporated according
to the law of The Netherlands with its registered office at Karel
Xxxxxxxxxx 00, Xxxxxxxx, 000 0XX, Xxx Xxxxxxxxxxx (the "Indemnifier"); and
(2) XXXXX OFFSHORE S.A. which is a company incorporated according to the law of
Luxembourg with its registered office at 00 xxx Xxxxxxxx, X-0000 Xxxxxxxxxx
(the "Guarantor"); and
(3) the banks and financial institutions listed in Schedule I, each acting
through its office at the address indicated against its name in Schedule 1
(together "the Banks" and each a `Bank"); and
(4) DEN NORSKE BANK ASA, acting as facility agent and security trustee through
its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Xxxxxx Xxxxxx
of America and acting as issuing bank through its office aforesaid and its
office at Xxxxxxxx 00, X0 Xxx 0000, X-0000, Xxxx, Xxxxxx (xx those
capacities "the Agent").
WHEREAS:-
(A) Each of the Banks at the request of (inter alios) the Indemnifier and the
Guarantor has agreed to (i) make available its respective Guarantee
Commitment of an aggregate amount not exceeding forty four million Dollars
($44,000,000) or the Equivalent Amount in a Permitted Currency or Permitted
Currencies and assume its Proportionate Share of the Bank's Obligations and
(ii) indemnify the Agent in respect of any Bank Guarantees issued by the
Agent to support certain performance obligations of members of the SO Group
in connection with certain contractual arrangements entered into or to be
entered into by members of the SO Group in the ordinary course of business
subject to and upon the terms and conditions contained in this Agreement.
IT IS AGREED as follows:-
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:-
1.1.1 "the Address for Service" means c/x Xxxxx Offshore M.S.
Limited of 1st Floor, Dolphin House, Windmill Road,
Sunbury-on-Thames, Middlesex TW16 7HT, England or, in
relation to any of the Security Parties, such other address
in England and Wales as that Security Party may from time to
time designate by no fewer than ten Business Days' written
notice to the Agent.
1.1.2 "Additional Permitted Indebtedness" has the meaning ascribed
to it in Clause 12.3.1(d).
1.1.3 "the Administration" has the meaning given to it in
paragraph 1.1.3 of the ISM Code.
1.1.4 "Amended and Restated Loan" means the loan and guarantee
facility made available to the Indemnifier pursuant to the
Amended and Restated Loan Agreement.
1.1.5 "Amended and Restated Loan Agreement" means the amended and
restated loan and guarantee facility agreement dated 9 July
2002 made between the Indemnifier, the Guarantor, the banks
listed in schedule 1 thereto as lenders and Nordea Bank
Norge ASA, Grand Cayman Branch as agent and security
trustee.
1.1.6 "the Assignments" means the deeds of assignment of the
Insurances, Earnings and Requisition Compensation in respect
of each Vessel referred to in Clause 10.2.1 and 10.2.2 (as
the case may be) (each an "Assignment").
1.1.7 "Avenir Vessel" means m.v. "XXXXX AVENIR" referred to in
Schedule 2.
1.1.8 "Bank Guarantees" means the bonds, guarantees or letters of
credit (including the Dolphin Bank Guarantees and the Xxxxx
Bank Guarantees)
2
each issued in a Permitted Currency in respect of certain
performance obligations of members of the SO Group and,
other than in relation to the Xxxxx Bank Guarantees which
shall expire on 31 July 2007 and 31 July 2008 respectively,
expiring on the earlier to occur of the Guarantee
Termination Date and a date falling thirty nine (39) months
after its Issue Date, in a form acceptable to and approved
by the Agent in its absolute discretion (each a "Bank
Guarantee").
1.1.9 "Bank Guarantee Outstandings" means at any time the total
amount actually or contingently payable by the Agent under
or pursuant to the Bank Guarantees issued by the Agent.
1.1.10 "Bank's Obligations" means all liabilities and obligations
of the Agent under or pursuant to the Bank Guarantees or
under or pursuant to any renewal, extension or variation of
any Bank Guarantee, and all liabilities and obligations
undertaken by the Agent to any of its subsidiaries,
affiliates or correspondents in respect of the Bank
Guarantees or any renewal, extension or variation of the
Bank Guarantees or any of them.
1.1.11 "Barge Vessels" means those Vessels listed in Schedule 2
owned by Xxxxx-Xxxxxxx Inland Tanker Service Bv.
1.1.12 "Business Day" means (a) a day on which banks are open for
the transaction of business of the nature contemplated by
this Agreement (and not authorised by law to close) in New
York City, United States of America; London, England; Oslo,
Norway; and (b) in relation to the determination of interest
rates for euros only, a day on which the Trans-European
Automated Real Time Gross Settlement Express System (TARGET)
is operating.
1.1.13 "Cash Collateral" means the sum of twenty three million four
hundred and ninety five thousand five hundred and sixty
three Dollars and sixty five cents ($23,495,563.65)
deposited by the Indemnifier with the Agent pursuant to a
guarantee facility letter in relation to the Xxxxx Xxxxx and
the Dolphin Bonds dated 1 July 2003.
3
1.1.14 "Certificate of Compliance" means a certificate materially
in the form set forth in Schedule 3, signed by the finance
director or similar officer of the Guarantor.
1.1.15 "Change of Control" means that SNSA shall cease, for any
reason whatsoever, to own or control directly or indirectly,
shares of the Guarantor representing at least 51% of all
votes capable of being represented in any shareholders'
meeting of the Guarantor or if any shareholder or group of
shareholders acting in concert outside SNSA at any time own
or control, directly or indirectly, more of the issued
voting shares determined, on a per vote basis, of the
Guarantor than those owned by SNSA.
1.1.16 a "Communication" means any notice, approval, demand,
request or other communication from one party to this
Agreement to any other party to this Agreement.
1.1.17 "the Communications Address" means c/x Xxxxx Offshore M.S.
Limited of 1st Floor, Xxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxx-xx-Xxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxx, fax no:
x(00) 0000 000000 marked for the attention of Xxxxxxx
Xx-Xxxx.
1.1.18 "the Company" means, in relation to the Avenir Vessel and at
any given time, the company responsible for that Vessel's
compliance with the ISM Code pursuant to paragraph 1.1.2 of
the ISM Code.
1.1.19 "Consolidated Debt" means for the Guarantor and its
Subsidiaries (on a consolidated basis) at any time, the
aggregate value of (i) notes payable (whether promissory
notes or otherwise), plus (ii) long-term debt (including
current portion of long-term debt), plus (iii) capitalised
lease obligations on behalf of third parties and all
contingent liabilities related to debt and capital lease
obligations which, according to US GAAP, are considered
probable and estimable, plus (iv) subordinated debt, less
(v) the amount of debt for which there is a restricted cash
deposit which will repay all or part of such financial debt
obligation.
4
1.1.20 "Consolidated Tangible Net Worth" means for the Guarantor
and its Subsidiaries (on a consolidated basis) at any time
(a) the sum, to the extent shown on the Guarantor's
consolidated balance sheet, of (i) the amount of issued and
outstanding share capital, less the cost of treasury shares,
plus (ii) the amount of surplus and retained earnings, less
(b) intangible assets as determined in accordance with US
GAAP.
1.1.21 "converted" means actually or notionally (as the case may
require) converted by the Agent, at the rate at which the
Agent, in accordance with its usual practice, is able in the
London Interbank market to purchase the Permitted Currency
in which the Facility or part thereof is then denominated
with the Permitted Currency in which the Facility or part
thereof is to be denominated, on the second Business Day
before the value date for that conversion pursuant to Clause
5, and the words "convert" and "conversion" shall be
interpreted accordingly.
1.1.22 "Currency of Account" means, in relation to any payment to
be made to a Finance Party pursuant to any of the Security
Documents, the currency in which that payment is required to
be made by the terms of the relevant Security Document.
1.1.23 "Xxxxx Bank Guarantees" means the Bank Guarantees issued by
the Agent on 11 July 2003 in relation to the Xxxxx Project
and expiring on 31 July 2007 and 31 July 2008 respectively.
1.1.24 "Xxxxx Guarantee Amount" means the total aggregate amount
for which the Agent is liable under the Xxxxx Bank
Guarantees.
1.1.25 "Xxxxx Project" means the various joint venture projects
entered into by (inter alios) the Guarantor relating to the
engineering, procurement, supply, construction and
commissioning of FPSO Topsides for the tapping of Xxxxx oil
Block 17 in Angola.
1.1.26 "D/EBITDA" means the ratio of Consolidated Debt to EBITDA.
1.1.27 "Default Rate" means the rate of four point two five per
centum (4.25%) per annum above three month LIBOR.
5
1.1.28 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
1.1.29 "Dollars" and "$" each means available and freely
transferable and convertible funds in lawful currency of the
United States of America.
1.1.30 "Dolphin Bank Guarantees" means two bid bonds each dated 28
May 2003 issued by the Agent in favour of Dolphin Energy
Limited for a total aggregate amount of one million five
hundred thousand Dollars ($1,500,000).
1.1.31 "Dolphin Guarantee Amount" means the total aggregate amount
for which the Agent is liable under Dolphin Bank Guarantees.
1.1.32 "Earnings" means all hires, freights, pool income and other
sums payable to or for the account of the Shipowning
Guarantors and any Qualifying Guarantor(s) in respect of the
Vessels including (without limitation) all remuneration for
salvage and towage services, demurrage and detention moneys,
contributions in general average, compensation in respect of
any requisition for hire and damages and other payments
(whether awarded by any court or arbitral tribunal or by
agreement or otherwise) for breach, termination or variation
of any contract for the operation, employment or use of the
Vessels.
1.1.33 "EBITDA" means the consolidated earnings of the Guarantor
and its Subsidiaries before interest, Taxes, depreciation
and amortisation, at any time during the Facility Period as
determined in accordance with US GAAP, calculated on a pro
forma basis to include acquisitions.
1.1.34 "Encumbrance" means any mortgage, charge, pledge, lien,
assignment, hypothcation, preferential right, option,
title retention or trust arrangement or any other agreement
or arrangement which, in any of the aforementioned
instances, has the effect of creating security.
1.1.35 "Equivalent Amount" means the amount of any Permitted
Currency converted from the relevant amount of Dollars.
6
1.1.36 "euro" means the currency of participating Member States of
the European Monetary Union, pursuant to Council Regulation
(EC) 974/98 of 3 May 1998, (as changed from time to time by
the European Communities).
1.1.37 "Event of Default" means any of the events set out in Clause
14.2.
1.1.38 "Execution Date" means the date on which this Agreement is
executed by each of the parties thereto.
1.1.39 "the Existing Loan" means the aggregate total amount
outstanding under the Existing Loan Agreement.
1.1.40 "Existing Loan Agreement" means the $440,000,000
multicurrency revolving credit agreement dated 22 September
2000 as amended made between (inter alios) the Indemnifier
as borrower, the Guarantor as guarantor, the Banks and
others, as lenders, Den norske Bank ASA as facility agent
and security trustee and Den norske Bank ASA and others as
arrangers.
1.1.41 "the Facility Period" means the period beginning on the
Execution Date and ending on the date when the whole of the
Indebtedness has been repaid in full and the Indemnifier has
ceased to be under any further actual or contingent
liability to the Finance Parties under or in connection with
the Security Documents.
1.1.42 "the Finance Parties" means the Banks and the Agent.
1.1.43 "the Guarantee" means the guarantee and indemnity of the
Guarantor contained in Clause 8.
1.1.44 "Guarantee Commission" means the guarantee commission to be
paid by the Indemnifier to the Agent pursuant to Clause
9.1.
1.1.45 "Guarantee Commitment" means, in relation to each Bank, the
amount of the Guarantee Facility which that Bank agrees to
reimburse to the Agent as its several liability as indicated
against the name of that Bank in Schedule 1, as reduced from
time to time in accordance with Clause 2.5, Clause 2.6,
Clause 2.7 and/or Clause 2.9 (as the case may be).
7
1.1.46 "Guarantee Facility" means the bank guarantee issuance
facility made available by the Agent and the Banks to the
Indemnifier pursuant to this Agreement.
1.1.47 "Guarantee Facility Amount" means the amount of the
aggregate Guarantee Commitments (stated in Dollars) subject
to any reductions effected in accordance with Clauses 2.5,
2.6, 2.7 and/or 2.9.
1.1.48 "Guarantee Availability Termination Date" means 30 November
2003 or such later date as may be agreed by all Banks.
1.1.49 "Guarantee Termination Date" means 30 September 2006 in
relation to all Bank Guarantees other than the Xxxxx Bank
Guarantees, unless otherwise agreed by all Banks.
1.1.50 "the Guarantor's Liabilities" means all of the liabilities
and obligations of the Guarantor to the Finance Parties
under or pursuant to the Guarantee whether actual or
contingent, including (without limitation) Interest.
1.1.51 "the Indebtedness" means the Bank Guarantee Outstandings;
all other sums of any nature including costs (together with
all interest on any of those sums) which from time to time
may be payable by the Indemnifier to the Finance Parties or
any of them pursuant to the Security Documents whether
actually or contingently, present or future; any damages
payable as a result of any breach by the Indemnifier of any
of the Security Documents; and any damages or other sums
payable as a result of any of the obligations of the
Indemnifier under or pursuant to any of the Security
Documents being disclaimed by a liquidator or any other
person, or, where the context permits, the amount thereof
for the time being outstanding.
1.1.52 "the Indemnifier's Obligations" means all of the liabilities
and obligations of the Indemnifier to the Finance Parties
under or pursuant to the Indemnifier's Security Documents,
whether actual or contingent, present or future, and whether
incurred alone or jointly or jointly and severally with any
other and in whatever currency, including (without
limitation) interest, commission and all other charges and
expenses.
8
1.1.53 "the Indemnifier's Security Documents" means those of the
Security Documents to which the Indemnifier is or is to be a
party.
1.1.54 an "Instructing Group" means any one or more Banks whose
combined Proportionate Shares equal or exceed sixty per
centum (60%).
1.1.55 "Insurances" means all policies and contracts of insurance
(including but not limited to hull and machinery, all
entries in protection and indemnity or war risks
associations) which are from time to time taken out or
entered into in respect of or in connection with the Vessels
or their increased value and (where the context permits) all
benefits thereof, including all claims of any nature and
returns of premium.
1.1.56 "Interest" means interest at the Default Rate.
1.1.57 "the ISM Code" means the International Management Code for
the Safe Management of Ships and for Pollution Prevention,
as adopted by the Assembly of the International Maritime
Organisation on 4 November 1993 by resolution A.741 (18) and
incorporated on 19 May 1994 as chapter IX of the Safety of
Life at Sea Convention 1974.
1.1.58 "the Issue Date", in relation to any Bank Guarantee, means
the date on which that Bank Guarantee is issued by the Agent
pursuant to Clause 2.
1.1.59 "Issue Request" means a notice complying with Clause 2.2.
1.1.60 "law" means any law, statute, treaty, convention,
regulation, instrument or other subordinate legislation or
other legislative or quasi-legislative rule or measure, or
any order or decree of any government, judicial or public or
other body or authority, or any directive, code of practice,
circular, guidance note or other direction issued by any
competent authority or agency (whether or not having the
force of law).
1.1.61 "LIBOR" means the rate, rounded to the nearest four decimal
places downwards (if the digit displayed in the fifth
decimal place is 1, 2, 3 or 4) or upwards (if the digit
displaced in the fifth decimal place is 5, 6, 7, 8 or 9)
displayed on the telerate page 3750 or, as the case may be,
3740 (or such other page or pages which replace(s) either
such page for the
9
purposes of display of offered rates of leading banks, for
deposits in the Currency of Account of amounts equal to the
amount of the relevant Bank Guarantee Outstandings for a
three (3) month period or if there is no such display rate
then available for the Permitted Currency for an amount
comparable to the relevant Bank Guarantee Outstandings, the
arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of one-sixteenth per centum (1/16%))
offered to the Agent and for a three month period by prime
banks in the London Interbank Market.
1.1.62 "the Managers" means any member of the SNSA Group; and/or
such other commercial and/or technical managers of the
Vessels nominated by the Shipowning Guarantors or any
Qualifying Guarantor(s) (as the case may be) as the Agent
may in its discretion approve.
1.1.63 "Management Agreement" means, in relation to any Vessel
which is leased to a party outside the SNSA Group, the
Management Agreement made between the Managers and the
relevant Shipowning Guarantor or any Qualifying Guarantor(s)
(as the case may be).
1.1.64 "the Mortgagees" Insurances" means all policies and
contracts of mortgagees' interest insurance and any other
insurance from time to time taken out by the Agent on behalf
of the Banks in relation to the Vessels pursuant to this
Agreement.
1.1.65 "the Mortgages" means the first priority and/or first
preferred mortgages referred to in Clause 10.1.1 and 10.2.1
(as the case may be) (each a "Mortgage").
1.1.66 "Norwegian Kroner" means available and freely transferable
and convertible funds in the lawful currency of the Kingdom
of Norway.
1.1.67 "Original Dollar Amount" means, at any relevant time, the
amount of the Guarantee Facility which would then have been
outstanding had the Guarantee Facility at all times been
denominated, and issued (as the case may be) wholly in
Dollars in accordance with Clause 6, or (in the case of any
part of the Bank's Obligations) the amount of that part of
the Bank's
10
Obligations notionally converted by the Agent from the
Relevant Currency into Dollars at the Issue Date of the Bank
Guarantee in question.
1.1.68 "Permitted Currency" means Dollars, the euro, each of the
lawful currencies of Norway (namely Norwegian Kroner), the
United Kingdom (namely Pounds Sterling) and any other
eurocurrency provided that each such currency selected by
the Indemnifier is acceptable to the Banks and is freely
convertible, transferable and available to the Banks in the
London Interbank market.
1.1.69 "Permitted Indebtedness" means the Existing Loan, the
Amended and Restated Loan, Short Term Permitted
Indebtedness, Subordinated Debt up to one hundred and fifty
million Dollars ($150,000,000), SNSA's Liquidity Line and
Additional Permitted Indebtedness.
1.1.70 "Permitted Liens" means (i) liens for salvage and any
Encumbrance created in favour of the Banks and/or the Agent
by the Security Documents or which otherwise has the prior
written approval of the Agent acting upon the instructions
of all the Banks, (ii) any Encumbrance arising either by
operation of law or in the ordinary course of the business
of the relevant Security Party which is discharged in the
ordinary course of business but in any event does not exist
for more than sixty (60) days, or (iii) Encumbrances created
pursuant to the Existing Loan Agreement and the Amended and
Restated Loan Agreement and existing on the Execution Date.
1.1.71 "Potential Event of Default" means any event which, with the
giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an
Event of Default.
1.1.72 "Pounds Sterling" means pounds sterling being the available
and freely transferable and convertible funds in the lawful
currency of the United Kingdom.
1.1.73 "Principal Subsidiary" means any member of the SO Group
having total assets exceeding ten per cent (10%) of the
consolidated assets of the SO Group and/or having during the
last four fiscal quarters accounted for
11
more than ten per cent (10%) of the consolidated turnover of
the SO Group.
1.1.74 "Proceedings" means any suit, action or proceedings
begun by any of the Finance Parties arising out of or in
connection with the Security Documents.
1.1.75 "Proportionate Share" means, for each Bank, the percentage
indicated against the name of that Bank in Schedule 1, as
amended by any Transfer Certificate executed from time to
time.
1.1.76 "Pro Rata Insurance Proceeds Amount" means, in respect of
each Vessel, a figure equal to (x) a fraction in which (i)
the numerator is the amount of the insurance proceeds
payable in respect of such Vessel in the event of a Total
Loss and (ii) the denominator is the aggregate market value
of all the Vessels (based on the most recent Valuations)
multiplied by (y) the Guarantee Facility Amount.
1.1.77 "Restructure Date" means the earlier to occur of 30 November
2003 and the date on which the financial covenants set forth
in clause 12.3 of the Existing Loan Agreement are amended,
varied, restated or supplemented.
1.1.78 "Qualifying Guarantee" means the guarantee and indemnity of
the Qualifying Guarantor(s) referred to in Clause 10.2.3.
1.1.79 "Qualifying Guarantor(s)" means the owner(s) of the
Qualifying Vessels acceptable to the Banks.
1.1.80 "Qualifying Security Documents" means (i) the Mortgages
together, where applicable, with collateral deeds of
covenant over Qualifying Vessels (ii) Assignments in respect
of Qualifying Vessels, (iii) the Qualifying Guarantee and
(iv) any other agreement or document as may be acceptable to
and approved in writing by the Agent acting on behalf of the
Banks, with (i) to (iv) above in each case being duly
executed and in form and substance satisfactoiy to the Agent
in its absolute discretion.
1.1.81 "Qualifying Vessels" means vessels which the Banks in their
absolute discretion deem to be acceptable security.
12
1.1.82 "Relevant Currency" means, in respect of all or any part of
the Bank's Obligations, the currency in which the Agent is
liable to make payment of that part of the Bank's
Obligations.
1.1.83 "Requisition Compensation" means all compensation or other
money which may from time to time be payable to the
Shipowning Guarantors and any Qualifying Guarantor(s) as a
result of any Vessel being requisitioned for title or in any
other way compulsorily acquired (other than by way of
requisition for hire).
1.1.84 "the Security Documents" means this Agreement, the
Mortgages, the Assignments, the Shipowners' Guarantee, the
SNSA Guarantee, the Qualifying Security Documents or (where
the context permits) any one or more of them, and any other
agreement or document which may at any time be executed by a
member of the SO Group and/or the SNSA Group as security for
the payment of all or any part of the Indebtedness.
1.1.85 "Security Parties" means the Indemnifier, the Guarantor, the
Shipowning Guarantors, SNSA, SNTG, the Qualifying
Guarantor(s) and any other member of the SO Group who may at
any time during the Facility Period be liable for, or
provide security for, all or any part of the Indebtedness,
and "Security Party" means any one of them.
1.1.86 "the Shipowners' Guarantee" means guarantee and indemnity of
the Shipowning Guarantors referred to in Clause 10.1.3.
1.1.87 "the Shipowning Guarantors" means the companies listed in
Schedule 2 each being incorporated according to the law of
the country indicated against its name in Schedule 2 (each
"a Shipowning Guarantor").
1.1.88 "Short Term Permitted Indebtedness" means any indebtedness
of the SO Group (other than the Existing Loan, the Amended
and Restated Loan and intercompany indebtedness of the SO
Group and/or the SNSA Group) incurred for working capital
and short term liquidity in an amount of up to seventy five
million Dollars ($75,000,000).
13
1.1.89 "SMC" means a valid safety management certificate issued for
the Avenir Vessel by or on behalf of the Administration
pursuant to paragraph 13.4 of the ISM Code.
1.1.90 "SMS" means a safety management system for the Avenir Vessel
developed and implemented in accordance with the ISM Code
and including the functional requirements, duties and
obligations required by the ISM Code.
1.1.91 "SNSA" means Xxxxx-Xxxxxxx S.A. a company incorporated
according to the law of Luxembourg with its registered
office at 00 Xxxxxx Xxxxxxxx, X-0000 Xxxxxxxxxx.
1.1.92 "SNSA Guarantee" means the joint and several guarantee and
indemnity of SNSA and SNTG referred to in Clause 10.1.4.
1.1.93 "SNSA Group" means SNSA and its Subsidiaries.
1.1.94 "SNSA's Liquidity Line" means the committed line of credit
in the amount of fifty million Dollars ($50,000,000)
extended by SNTG to members of the SO Group for working
capital and other corporate purposes for a period ending on
or after 30 November 2004, the availability of such
committed line of credit to be guaranteed by SNSA.
1.1.95 "SNTG" means Xxxxx-Xxxxxxx Transportation Group Ltd being a
corporation incorporated and existing accoTding to the laws
of Liberia whose registered office is at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx.
1.1.96 "SO Group" means the Guarantor and its Subsidiaries.
1.1.97 "Subordinated Debt" means any debt from any member(s) of the
SNSA Group upon the terms contained in a Subordinated Note.
1.1.98 "Subordinated Note" means a note substantially in the form
of Appendix C, Part A in respect of Subordinated Debt of up
to one hundred million Dollars ($100,000,000) and Part B in
respect of Subordinated Debt of fifty million Dollars
($50,000,000).
14
1.1.99 "Subsidiary" means a subsidiary undertaking, as defined in
section 258 Companies Act 1985 or any analogous definition
under any other relevant system of law.
1.1.100 "Surety" means any person (other than the Indemnifier or the
Guarantor) who has given or who may in the future give to
the Finance Parties or any of them any security, guarantee
or indemnity for or in relation to the Indemnifier's
Obligations.
1.1.101 "Synthetic Leases" means any leasing structure that
qualifies as an operating lease for financial reporting
purposes but is considered a loan for applicable income or
corporation tax purposes.
1.1.102 "Taxes" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related
interest and penalties) and any restrictions or conditions
resulting in any charge, other than taxes on the overall net
income of a Finance Party or branch thereof, and "Tax" and
"Taxation" shall be interpreted accordingly.
1.1.103 "Total Loss", in relation to any Vessel means:-
(a) an actual, constructive, arranged, agreed or
compromised total loss of that Vessel; or
(b) the requisition for title, compulsory acquisition,
nationalisation or expropriation of that Vessel by or
on behalf of any government or other authority (other
than by way of requisition for hire); or
(c) the capture, seizure, arrest, detention or confiscation
of that Vessel, unless the Vessel is released and
returned to the possession of the relevant Shipowning
Guarantor or Qualifying Guarantor(s) (as the case may
be) within two months after the capture, seizure,
arrest, detention or confiscation in question.
1.1.104 "Transfer Certificate" means a certificate materially in the
form set forth in Schedule 4 signed by a Bank and a
Transferee whereby:
15
(a) such Bank seeks to procure the transfer to such
Transferee of all or a part of such Bank's rights and
obligations under this Agreement upon and subject to
the terms and conditions set out in Clause 16; and
(b) such Transferee undertakes to perform the obligations
it will assume as a result of delivery of such
certificate to the Agent as is contemplated in Clause
16.
1.1.105 "Transfer Date" means, in relation to any Transfer
Certificate, the date for the making of the transfer
specified in the schedule to such Transfer Certificate.
1.1.106 "Transferee" means a bank or other financial institution to
which a Bank seeks to transfer all or part of such Bank's
rights and obligations under this Agreement.
1.1.107 "the Trust Property" means:-
(a) the benefit of the covenant contained in Clause 10; and
(b) all benefits arising under (including, without
limitation, all proceeds of the enforcement of) each of
the Security Documents (other than this Agreement),
with the exception of any benefits arising solely for
the benefit of the Agent).
1.1.108 "US GAAP" means the generally accepted accounting principles
in the United States of America, from time to time in
effect, subject to any changes in the rules of US GAAP,
consistently applied always provided that if the Guarantor
wishes to change accounting principles within the applicable
rules of US GAAP, the Indemnifier shall notify the Agent of
the intention together with an explanation of the effects on
the financial covenants contained in this Agreement. Should
the Banks, and/or the Guarantor, find that such change will
impact upon the result of the calculation of the financial
covenants contained in this Agreement, the Banks will,
following consultation with the Guarantor, stipulate
amendments to the financial covenants so that the ratio of
SO Group's performance in respect of the covenants reflects
the position which
16
would have been the case had no changes to the Guarantor's
accounting principles taken place.
1.1.109 "Valuation" means in relation to a Vessel, the arithmetic
mean of the written valuations of that Vessel expressed in
Dollars prepared by two firms of reputable independent
shipbrokers, appointed by the Indemnifier and approved by
the Agent, unless either the Agent or the Indemnifier
disagrees with such arithmetic average, in which event the
two shipbrokcrs shall appoint a third firm of reputable
independent shipbrokers and the valuation of the Vessel
shall be the arithmetic mean of all three such valuations.
Such valuations shall be prepared at the Indemnifier's
expense, without a physical inspection, on the basis of a
sale for prompt delivery for cash at arm's length between a
willing buyer and a willing seller without the benefit of
any charterparty or other engagement.
1.1.110 "the Vessels" means (i) the vessels listed in Schedule 2 and
(ii) any Qualifying Vessels and in each case everything now
or in the future belonging to them on board and ashore (each
a "Vessel").
1.2 Interpretation
In this Agreement:-
1.2.1 words denoting the plural number include the singular and
vice versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and
vice versa;
1.2.3 references to Recitals, Clauses, Schedules and Appendices
are references to recitals and clauses of, and schedules and
appendices to, this Agreement;
1.2.4 references to this Agreement include the Recitals, the
Schedules and the Appendices;
17
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and
shall be ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation,
to all or any of the Security Documents) are, unless the
context otherwise requires, references to that document as
amended, supplemented, novated or replaced from time to
time;
1.2.7 references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from
time to time amended, replaced or re-enacted;
1.2.8 references to any of the Finance Parties include its
successors, Transferees and assignees; and
1.2.9 references to times of day are to New York time.
1.3 Joint and several liability
1.3.1 All obligations, covenants, representations, warranties and
undertakings in or pursuant to the Security Documents
assumed, given, made or entered into by the Indemnifier and
the Guarantor shall, unless otherwise expressly provided, be
assumed, given, made or entered into by the Indemnifier and
the Guarantor jointly and severally.
1.3.2 Each of the Indemnifier and the Guarantor agrees that any
rights which it may have at any time during the Facility
Period by reason of the perfbrmance of its obligations under
the Security Documents to be indemnified by the other or by
any Surety and/or to take the benefit of any security taken
by the Finance Parties pursuant to the Security Documents
shall be exercised in such manner and on such terms as the
Agent may require. Each of the Indemnifier and the Guarantor
agrees to hold any sums received by it as a result of its
having exercised any such right on trust for the Agent (as
agent for the Banks) absolutely.
1.3.3 Each of the Indemnifier and the Guarantor agrees that it
will not at any time during the Facility Period claim any
set-off or counterclaim against
18
the other or against any Surety in respect of any liability
owed to it by the other or by any Surety under or in
connection with the Security Documents, nor prove in
competition with any Finance Party in any liquidation of (or
analogous proceeding in respect of) the other or of any
Surety in respect of any payment made under the Security
Documents or in respect of any sum which includes the
proceeds of realisation of any security held by any of the
Finance Parties for the repayment of the Indebtedness.
2 The Guarantee Facility
2.1 Agreement to issue/release Cash Collateral Subject to the terms and
conditions of this Agreement, and in reliance on each of the
representations and warranties made or to be made in or in accordance
with each of the Security Documents, the Agent agrees to (i) issue the
Bank Guarantees and (ii) release the Cash Collateral to the
Indemnifier.
2.2 Mechanics Subject to satisfaction by the Indemnifier of the conditions
set out in Clause 3.3, the Indemnifier (on behalf of itself or another
member of the SO Group) may request that the Agent issue a Bank
Guarantee on a Business Day subject to the Indemnifier having given to
the Agent not less than seven Business Days' notice in writing
materially in the form set out in Appendix A of the required Issue
Date attaching the form of Bank Guarantee to be issued. Upon receipt
of the form of Bank Guarantee required to be issued together with the
Issue Request, the Agent, save in relation to the Xxxxx Bank
Guarantees and the Dolphin Guarantees (which have already been issued)
shall decide in its absolute discretion within five Business Days of
receipt of the Issue Request whether or not to issue that Bank
Guarantee. The Agent shall not be liable for any loss, cost, claim or
expense suffered or incurred by any member of the SO Group as a
consequence of the Agent not issuing any Bank Guarantee so requested.
Once a Bank Guarantee has been approved by the Agent the Issue Request
in relation to such Bank Guarantee shall be irrevocable and shall
constitute a warranty by the Indemnifier that:
2.2.1 all conditions precedent to the issue of that Bank Guarantee
will have been satisfied on or before the Issue Date
requested;
19
2.2.2 no Event of Default or Potential Event of Default will then
have occurred;
2.2.3 no Event of Default or Potential Event of Default will
result from the issue of the Bank Guarantee in question; and
2.2.4 there has been no material adverse change in the business,
affairs or financial condition of any of the Security
Parties from that pertaining at the end of the last fiscal
quarter for which quarterly reports have been filed by SNSA
with the United States Securities and Exchange Commission;
provided that if this warranty is made by the Guarantor at
any time during the period commencing on the date of this
Agreement and ending on the date of the filing of the
Guarantor's next quarterly report it shall relate only to
material adverse changes occurring when compared with the
circumstances disclosed by the Guarantor to (inter alios)
the Agent at a Syndicate Bank Briefing held in London and
New York on 7 August 2003 in relation to the Guarantor's
"Position Update and Blueprint Stage II".
2.3 Guarantee Availability Termination Date The Agent shall be under no
obligation to issue any Bank Guarantee after the Guarantee
Availability Termination Date.
2.4 Issue of Bank Guarantees Upon (i) receipt of an Issue Request and (ii)
the issue of each Bank Guarantee the Agent shall promptly notify each
Bank. From the date of issue of each Bank Guarantee each Bank shall
assume liability for its Proportionate Share of the Bank's Obligations
and from the date of issue each Bank Guarantee shall be deemed
irrevocably and unconditionally to have purchased and received from
the Agent, without recourse or warranty, an undivided interest and
participation, to the extent of its Proportionate Share, in each Bank
Guarantee issued by the Agent. In addition each Bank (in the amount of
its Proportionate Share) will upon the Agent's first demand, from time
to time, reimburse the Agent for any sums paid out by the Agent under
any Bank Guarantee in accordance with Clause 6.
2.5 Voluntary Reductions The Indemnifier may voluntarily reduce the
Guarantee Facility Amount in whole or in part in multiples of two
million Dollars
20
($2,000,000), where applicable provided that it has first given to the
Agent not fewer than three (3) Business Days' prior written notice
expiring on a Business Day of its desire to reduce the Guarantee
Facility Amount. Any such reduction in the Guarantee Facility Amount
shall not be reversed.
2.6 Mandatory Reductions In the event of a sale or disposal of a Vessel
(subject to the penultimate sentence contained in Clause 12.2.21) the
Guarantee Facility Amount shall reduce by an amount equal to the
proportion that a current Valuation for such Vessel bears to the
aggregate total amount of the current Valuations for the remaining
Vessel and the Vessel sold or disposed of pursuant to this Clause.
2.7 Total Loss In the event that any Vessel becomes a Total Loss, on the
date of such Total Loss occurring, the Guarantee Facility Amount shall
reduce by the Pro Rata Insurance Proceeds Amount in respect of such
Vessel. Any such reductions in the Guarantee Facility Amount shall not
be reversed. If, as a result of any reduction in the Guarantee
Facility Amount pursuant to this Clause the Original Dollar Amount
exceeds the Guarantee Facility Amount, the Indemnifier shall, on the
earlier to occur of (a) the one hundred and eightieth day after the
date of such Total Loss occurring and (b) the date on which the
relevant Shipowning Guarantor receives the proceeds of such Total
Loss, prepay such amount of the Original Dollar Amount as will ensure
that the Original Dollar Amount is not greater than the Guarantee
Facility Amount. Such amount shall be held by the Agent on account as
security for the Indebtedness.
2.8 Guarantee Commitment Simultaneously with any reduction of the
Guarantee Facility Amount in accordance with Clause 2.5, Clause 2.6,
Clause 2.7 and/or Clause 2.9 (as the case may be) the Guarantee
Commitment of each Bank will reduce so that the Guarantee Commitments
of the Banks in respect of the reduced Guarantee Facility Amount
remain in accordance with their respective proportionate Shares.
2.9 Guarantee Facility Amount If at any time during the Facility Period
the aggregate amount of the Bank Guarantee Outstandings exceeds the
Guarantee Facility Amount, the Indemnifier shall immediately pay or
cause to be paid to the Agent a cash amount equal to the difference
between the Bank Guarantee Outstandings and the Guarantee Facility
Amount. Such amount shall be held by
21
the Agent on account as security for the Indebtedness. The Guarantee
Facility Amount shall be reduced from time to time by the aggregate of
Bank Guarantee Outstandings (which for the avoidance of doubt includes
without limitation the Xxxxx Guarantee Amount and the Dolphin
Guarantee Amount). The Guarantee Facility Amount shall be permanently
reduced by the amount of the Bank's Obligations under each Bank
Guarantee issued.
2.10 Several obligations The obligations of the Banks under this Agreement
are several. The failure of a Bank to perform its obligations under
this Agreement shall not affect the obligations of the Indemnifier to
any Finance Party nor shall any Finance Party be liable for the
failure of another Bank to perform any of its obligations under or in
connection with this Agreement.
3 Conditions Precedent and Subsequent
3.1 Conditions Precedent -- release of Cash Collateral Before the Agent
shall have any obligation to release the Cash Collateral to the
Indemnifier, the Indemnifier shall pay to the Agent any relevant fees
referred to in Clause 9 and deliver or cause to be delivered to or to
the order of the Agent the following documents and evidence:-
3.1.1 Evidence of incorporation Such evidence as the Agent may
reasonably require that each Security Party was duly
incorporated in its country of incorporation and remains in
existence and, where appropriate, in good standing, with
power to enter into, and perform its obligations under,
those of the Security Documents (other than the Qualifying
Security Documents) to which it is, or is intended to be, a
party, including (without limitation) a copy, certified by a
director or an officer of the Security Party in question as
true, complete, accurate and unamended, of all documents
establishing or limiting the constitution of each Security
Party.
3.1.2 Corporate authorities A copy, certified by a director or the
secretary of the Security Party in question as true,
complete, accurate and neither amended nor revoked, of a
resolution of the directors and (other than the Guarantor) a
resolution of the shareholders of each Security Party
(together, where appropriate, with signed waivers of notice
of any directors' or shareholders' meetings) approving, and
authorising or
22
ratifying the execution of, those of the Security Documents
(other than the Qualifying Security Documents) to which that
Security Party is or is intended to be a party and all
mafters incidental thereto.
3.1.3 Officer's certificate A certificate (i) signed by a duly
authorised officer of each of the Security Parties setting
out the names of the directors, officers and (other than the
Guarantor) shareholders of that Security Party and (ii)
issued by each Security Party's company registry confirming
due incorporation and valid existence and (when such
information is maintained by the registry) the names of its
directors and shareholders.
3.1.4 Power of attorney The power of attorney (notarially attested
and legalised, if necessary, for registration purposes) of
each of the Security Parties (other than the Qualifying
Security Documents) under which any documents are to be
executed or transactions undertaken by that Security Party.
3.1.5 Vessel documents Photocopies, certified as true, accurate
and complete by a director or the secretary of the relevant
Shipowning Guarantor of:-
(a) any time charterparty or bareboat charterparty for its
Barge Vessel(s) and the Avenir Vessel which will be in
force on the date of this Agreement and which exceeds
twelve (12) months duration which is entered into with
an entity which is not a member of the SNSA Group;
(b) the Management Agreement(s) relating to its Barge
Vessel(s) and the Avenir Vessel which are in force at
the time of this Agreement; and
(c) the Avenir Vessel's current Safety Construction,
Equipment, Safety Radio and Load Line Certificates;
(d) if required by law and the Avenir Vessel is operating
in the waters of the United States of America, that
Vessel's current Certificate of Financial
Responsibility issued pursuant to the United States Oil
Pollution Xxx 0000;
23
(e) the current SMC for the Avenir Vessel;
(f) where applicable, each Company's current DOC; and
(g) its Barge Vessel's/s' current and valid Certificate of
Approval and Certificate of Inspection issued by ADNR,
in each case together with all addenda, amendments or
supplements.
3.1.6 Evidence of ownership In respect of each Barge Vessel and
the Avenir Vessel, certificate(s) of ownership and
encumbrance (or equivalent) issued by the Registrar of Ships
(or equivalent official) at each Barge Vessel's and the
Avenir Vessel's port of registry confirming that such Barge
Vessel or the Avenir Vessel (as the case may be) is owned by
the relevant Shipowning Guarantor and free of registered
Encumbrances.
3.1.7 Evidence of insurance Evidence that each Barge Vessel and
the Avenir Vessel is insured in the manner required by the
relevant Security Documents and that letters of undertaking
will be issued in the manner required by the relevant
Security Documents, together with (if required by the Agent)
the written approval of the Insurances by an insurance
adviser appointed by the Agent.
3.1.8 Confirmation of class A Certificate of Confirmation of Class
for hull and machinery (dated not more than seven days
before the date of this Agreement) confirming that each
Barge Vessel and the Avenir Vessel is classed with the
highest applicable class necessary to properly operate such
Barge Vessel and the Avenir Vessel of Lloyd's Register of
Shipping, Det norske Veritas, the American Bureau of
Shipping or such other classification society as may be
acceptable to the Agent.
3.1.9 Valuations A Valuation of each Barge Vessel and the Avenir
Vessel addressed to the Agent evidencing that the aggregate
market values of such Vessels are at least equal to 120% of
the amount of the Cash Collateral.
3.1.10 The Security Documents The Security Documents (other than
the Qualifying Security Documents), together with all
notices and other
24
documents required by any of them, duly executed and, in the
case of the Mortgages over the Barge Vessels and the Avenir
Vessel, registered with first priority through the Registrar
of Ships (or equivalent official) at the port of registry of
the Barge Vessels and the Xxxxx Avenir Vessel.
3.1.11 Process agent A letter from Xxxxx Offshore M.S. Limited
accepting their appointment by each of the Security Parties
as agent for service of Proceedings pursuant to the Security
Documents (other than the Qualifying Security Documents).
3.1.12 Managers' subordination confirmation letter The written
confirmation of the Managers that they will (i) remain the
commercial and technical managers of the Barge Vessels and
the Avenir Vessel throughout the Facility Period and will
manage the Barge Vessels and the Avenir Vessel in accordance
with good standard ship management practice and (ii)
subordinate all their rights in relation to the Barge
Vessels and the Avenir Vessel to those of the Finance
Parties.
3.1.13 Legal opinions Confirmation satisfactory to the Agent that
all legal opinions required by the Agent on behalf of the
Banks will be given substantially in the form required by
the Agent on behalf of the Banks.
3.1.14 Accounts The (i) consolidated audited accounts of the
Guarantor for its financial year just ended and (ii) most
recent unaudited financial statements of the Guarantor in
each case, certified, by a director or the chief financial
officer of Xxxxx Offshore M.S. Limited as agent for the
Guarantor, as fair and accurate.
3.1.15 Material Adverse Change Evidence that no material adverse
change has occurred in the business, assets, operations,
conditions (financial or otherwise) or prospects of the
Guarantor or its Subsidiaries from that advised by the
Guarantor to (inter alios) the Agent at a Syndicate Bank
Briefing held in London and New York on 7 August 2003 in
relation to the Guarantor's "Position Update and Blueprint
Stage II".
3.1.16 Corporate Structure Evidence of the actual corporate
structure of the SO Group.
25
3.2 Conditions Subsequent The Indemnifier undertakes to deliver or to
cause to be delivered to the Agent on, or as soon as practicable
after, the date on which the Cash Collateral is released to the
Indemnifier, the following additional documents and evidence:-
3.2.1 Evidence of registration Evidence of registration of the
Mortgages over the Barge Vessels and the Avenir Vessel, in
each case with first priority with the Registrar of Ships
(or equivalent official) at the port of registry of the
Barge Vessels and the Avenir Vessel.
3.2.2 Letters of undertaking Letters of undertaking as required by
the relevant Security Documents (other than the Qualifying
Security Documents) in form and substance acceptable to the
Agent.
3.2.3 Legal opinions Such legal opinions as the Agent on behalf of
the Banks shall require pursuant to Clause 3.1.13.
3.2.4 Companies Act registrations Evidence that the prescribed
particulars of the Security Documents (other than the
Qualifying Security Documents) have been delivered to (i)
the Registrar of Companies of England and Wales (ii) and any
other applicable registry, agency or body within the
statutory time limit.
3.2.5 Master's receipts The master's receipt for the Mortgage over
the Avenir Vessel.
3.2.6 Management Agreements Within three months of the Execution
Date (or such later date as the Agent in its discretion may
agree) Management Agreements in relation to all the Barge
Vessels and the Avenir Vessel where such agreements were not
delivered to the Agent pursuant to Clause 3.1.5(b).
3.3 Conditions Precedent - first Bank Guarantee Before The Agent shall
have any obligation to issue the first Bank Guarantee under the
Guarantee Facility, the Indemnifier shall pay to the Agent the
relevant fees referred to in Clause 9 and deliver or cause to be
delivered to or to the order of the Agent the following documents and
evidence:-
26
3.3.1 Evidence of incorporation Such evidence as the Agent may
reasonably require that each Security Party was duly
incorporated in its country of incorporation and remains in
existence and, where appropriate, in good standing, with
power to enter into, and perform its obligations under,
those of the Qualifying Security Documents to which it is,
or is intended to be, a party, including (without
limitation) a copy, certified by a director or an officer of
the Security Party in question as true, complete, accurate
and unamended, of all documents establishing or limiting the
constitution of each Security Party.
3.3.2 Corporate authorities A copy, certified by a director or the
secretary of the Security Party in question as true,
complete, accurate and neither amended nor revoked, of a
resolution of the directors and (other than the Guarantor) a
resolution of the shareholders of each Security Party
(together, where appropriate, with signed waivers of notice
of any directors' or shareholders' meetings) approving, and
authorising or ratifying the execution of, those of the
Qualifying Security Documents and each Issue Request to
which that Security Party is or is intended to be a party
and all matters incidental thereto.
3.3.3 Officer's certificate A certificate (i) signed by a duly
authorised officer of each of the Security Parties setting
out the names of the directors, officers and (other than the
Guarantor) shareholders of that Security Party and (ii)
issued by each Security Party's company registry confirming
due incorporation and valid existence and (when such
information is maintained by the registry) the names of its
directors and shareholders.
3.3.4 Power of attorney The power of attorney (notarially attested
and legalised, if necessary, for registration purposes) of
each of the Security Parties under which any Qualifying
Security Documents are to be executed or transactions
undertaken by that Security Party.
3.3.5 Qualifying Vessel documents Photocopies, certified as true,
accurate and complete by a director or the secretary of the
Qualifying Guarantor(s) of: -
27
(a) any time chafterparty or bareboat charterparty for its
Qualifying Vessel(s) which will be in force on the
first Issue Date and which exceeds twelve (12) months
duration which is entered into with an entity which is
not a member of the SNSA Group;
(b) the Management Agreement(s) relating to its Qualifying
Vessel(s) which is in force at the first Issue Date;
and
(c) where applicable, each Qualifying Vessel's current
Safety Construction, Safety Equipment, Safety Radio and
Load Line Certificates;
(d) if required by law and any Qualifying Vessel is
operating in the waters of the United States of
America, that Qualifying Vessel's Certificate of
Financial Responsibility issued pursuant to the United
States Oil Pollution Xxx 0000;
(e) where applicable, the current SMC for each Qualifying
Vessel;
(f) where applicable, each Company's current DOC; and
(g) where applicable, its Qualifying Vessel's/s' current
and valid Certificate of Approval and Certificate of
Inspection issued by ADNR,
in each case together with all addenda, amendments or
supplements.
3.3.6 Evidence of ownership In respect of each Qualifying Vessel,
certificate(s) of ownership and encumbrance (or equivalent)
issued by the Registrar of Ships (or equivalent official) at
each Qualifying Vessel's port of registry confirming that
such Qualifying Vessel is on the first Issue Date owned by
the relevant Qualifying Guarantor(s) and free of registered
Encumbrances.
3.3.7 Evidence of insurance Evidence that each Qualifying Vessel
is insured in the manner required by the relevant Qualifying
Security Documents and that letters of undertaking will be
issued in the manner required by the relevant Qualifying
Security Documents, together with (if required by the
28
Agent) the written approval of the Insurances by an
insurance adviser appointed by the Agent.
3.3.8 Confirmation of class A Certificate of Confirmation of Class
for hull and machinery (dated not more than seven days
before the first Issue Date) confirming that each Qualifying
Vessel is classed with the highest applicable class
necessary to properly operate such Qualifying Vessel of
Lloyd's Register of Shipping, Det norske Veritas, the
American Bureau of Shipping or such other classification
society as may be acceptable to the Agent.
3.3.9 Valuations A Valuation of each Qualifying Vessel addressed
to the Agent.
3.3.10 The Qualifying Security Documents The Qualifying Security
Documents, together with all notices and other documents
required by any of them, duly executed and, in the case of
the Mortgages over the Qualifying Vessels, registered with
first priority through the Registrar of Ships (or equivalent
official) at the port of registry of the Qualifying Vessel
concerned.
3.3.11 Issue Request An Issue Request.
3.3.12 Process agent A letter from Xxxxx Offshore M.S. Limited
accepting their appointment by each of the Security Parties
as agent for service of Proceedings pursuant to the
Qualifying Security Documents.
3.3.13 Managers' subordination confirmation letter The written
confirmation of the Managers that they will (i) remain the
commercial and technical managers of the Qualifying Vessels
throughout the Facility Period and will manage the
Qualifying Vessels in accordance with good standard ship
management practice and (ii) subordinate all their rights in
relation to the Qualifying Vessels to those of the Finance
Parties.
3.3.14 Legal opinions Confirmation satisfactory to the Agent that
all legal opinions required by the Agent on behalf of the
Banks will be given substantially in the form required by
the Agent on behalf of the Banks.
29
3.3.15 Material Adverse Change Evidence that no material adverse
change has occurred in the business, assets, operations,
conditions (financial or otherwise) or prospects of the
Guarantor or its Subsidiaries from that disclosed by the
Guarantor to (inter alios) the Agent at a Syndicate Bank
Briefing held in London and New York on 7 August 2003 in
relation to the Guarantor's "Position Update and Blueprint
Stage II".
3.3.16 Corporate Structure Evidence of the actual corporate
structure of the SO Group.
3.3.17 Further Assurance Such other documents and evidence as the
Agent may require in relation to authorisation, execution,
delivery, registration and perfection of the Qualifying
Security Documents.
3.4 Conditions Subsequent The Indemnifier undertakes to deliver or to
cause to be delivered to the Agent on, or as soon as practicable
after, the first Issue Date, the following additional documents and
evidence: -
3.4.1 Evidence of registration Evidence of registration of the
Mortgages over the Qualifying Vessels, in each case with
first priority with the Registrar of Ships (or equivalent
official) at the port of registry of the Qualifying Vessel
concerned.
3.4.2 Letters of undertaking Letters of undertaking as required by
the relevant Qualifying Security Documents in form and
substance acceptable to the Agent.
3.4.3 Legal opinions Such legal opinions as the Agent on behalf of
the Banks shall require pursuant to Clause 3.3.14.
3.4.4 Companies Act registrations Evidence that the prescribed
particulars of the Qualifying Security Documents have been
delivered to (i) the Registrar of Companies of England and
Wales (ii) and any other applicable registry, agency or body
within the statutory time limit.
3.4.5 Management Agreements Within three months of the Execution
Date (or such later date as the Agent in its discretion may
agree) Management
30
Agreements in relation to all the Qualifying Vessels where
such agreements were not delivered to the Agent pursuant to
Clause 3.3.5(b).
3.5 Conditions Precedent -- Subsequent Bank Guarantees Before the Agent
shall have any obligation to issue any subsequent Bank Guarantee under
the Guarantee Facility, the Indemnifier shall deliver or cause to be
delivered to the order of the Agent: -
3.5.1 an Issue Request, in addition to the documents and evidence
referred to in Clauses 3.1 and 3.3 where such documents and
evidence have not already been delivered to and received by
the Agent; and
3.5.2 a Valuation of each Vessel addressed to the Agent evidencing
compliance with Clause 12.2.2.
3.6 No waiver If the Agent in its sole discretion agrees to issue any Bank
Guarantee on behalf of the Indemnifier before all of the documents and
evidence required by Clause 3.1, Clause 3.3 or Clause 3.5 (as the case
may be) have been delivered to or to the order of the Agent, the
Indemnifier undertakes to deliver all outstanding documents and
evidence to or to the order of the Agent no later than the date
specified by the Agent, and the issue of any Bank Guarantee shall not
be taken as a waiver of the Agent's right to require production of all
the documents and evidence required by Clause 3.1, Clause 3.3 or
Clause 3.5 (as the case may be).
3.7 Form and content All documents and evidence delivered to the Agent
pursuant to this Clause shall:-
3.7.1 be in form and substance acceptable to the Agent;
3.7.2 be accompanied, if required by the Agent, by translations
into the English language, certified in a manner acceptable
to the Agent;
3.7.3 if required for registration purposes, be certified,
notarised, legalised or attested in a manner acceptable to
the Agent.
3.8 Event of Default The Agent shall not be under any obligation to issue
any Bank Guarantee nor to act on any Issue Request if, at the date of
the Issue Request or at the date on which the issue of a Bank
Guarantee is requested in an Issue Request, an Event of Default or
Potential Event of Default shall have occurred, or if an
31
Event of Default or Potential Event of Default would result from the
issue of the Bank Guarantee in question.
4 Representations and Warranties
Each of the Indemnifier and the Guarantor represents and warrants to each
of the Finance Parties at the date of this Agreement and (by reference to
the facts and circumstances then pertaining) at the date of each, Issue
Request and at each Issue Date as follows (except that the representation
and warranty contained at Clause 4.6 and Clause 4.13 shall only be made on
the first Issue Date):-
4.1 Incorporation and capacity Each of the Security Parties is a body
corporate duly constituted, organised and validly existing and (where
applicable) in good standing under the law of its country of
incorporation, in each case with perpetual corporate existence and the
power to xxx and be sued, to own its assets and to carry on its
business, and all of the corporate shareholders (if any) of each
Security Party (other than the Guarantor) are duly constituted and
existing under the laws of their countries of incorporation with
perpetual corporate existence and the power to xxx and be sued, to own
their assets and to carry on their business and are acting on their
own account.
4.2 Solvency None of the Security Parties is insolvent or in liquidation
or administration or subject to any other insolvency procedure, and no
receiver, administrative receiver, administrator, liquidator, trustee
or analogous officer has been appointed in respect of any of the
Security Parties or all or any part of their assets except if such
insolvency should arise in relation to a Shipowning Guarantor or any
Qualifying Guarantor(s) (as the case may be) in the circumstances
where a demand has been made under the Shipowners' Guarantee or the
Qualifying Guarantee (as the case may be). For this purpose a Security
Party will be deemed insolvent if it is unable to pay its debts within
the meaning of S.l23 of the Insolvency Xxx 0000 save in relation to
the exception referred to in the previous sentence.
4.3 Binding obligations The Security Documents when duly executed and
delivered will constitute the legal, valid and binding obligations of
the Security Parties enforceable in accordance with their respective
terms subject to applicable laws regarding creditors' rights in
general.
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4.4 Satisfaction of conditions All acts, conditions and things required to
be done and satisfied and to have happened prior to the execution and
delivery of the Security Documents in order to constitute the Security
Documents the legal, valid and binding obligations of the Security
Parties in accordance with their respective terms have been done,
satisfied and have happened in compliance with all applicable laws.
4.5 Registrations and consents With the exception only of the
registrations referred to in Clause 3.2 and in Clause 3.4 (as the case
may be), all (if any) consents, licences, approvals and authorisations
of, or registrations with or declarations to, any governmental
authority, bureau or agency which may be required in connection with
the execution, deliveiy, performance, validity or enforceability of
the Security Documents have been obtained or made and remain in full
force and effect and neither the Indemnifier nor the Guarantor is
aware of any event or circumstance which could reasonably be expected
adversely to affect the right of any of the Security Parties (as the
case may be) to hold and/or obtain renewal of any such consents,
licences, approvals or authorisations.
4.6 Disclosure of material facts Neither the Indemnifier nor the Guarantor
is aware of any material facts or circumstances which have not been
disclosed to the Agent and which might, if disclosed, have reasonably
been expected to adversely affect the decision of a person considering
whether or not to make guarantee facilities of the nature contemplated
by this Agreement available to the Indemnifier.
4.7 No material litigation Except for those matters disclosed in writing
to the Agent or listed in Appendix E, there is no action, suit,
arbitration or administrative proceeding nor any contemplated action,
suit, arbitration or administrative proceeding pending or to its
knowledge about to be pursued before any court, tribunal or
governmental or other authority which would, or would be likely to,
have a materially adverse effect on the business, assets, financial
condition or creditworthiness of the SO Group.
4.8 No breach of law or contract The execution, delivery and performance
of the Security Documents will not contravene any contractual
restriction or any law binding on any of the Security Parties or on
any shareholder (whether legal or beneficial) of any of the Security
Parties (other than the Guarantor or SNSA), or the constitutional
documents of any of the Security Parties, nor result in the
33
creation of, nor oblige any of the Security Parties to create, any
Encumbrance over all or any of its assets, with the exception of the
Encumbrances created by or pursuant to the Security Documents.
4.9 No deductions Except as disclosed to the Agent in writing, to the best
of their knowledge and belief and without undue enquiry, none of the
Security Parties is required to make any deduction or withholding from
any payment which it may be obliged to make to any of the Finance
Parties under or pursuant to the Security Documents.
4.10 No established place of business in the United Kingdom or United
States None of the Security Parties has, at the date of this
Agreement, an established place of business in the United Kingdom or
the United States of America.
4.11 Use of Facility and Guarantee Facility The Guarantee Facility will be
used for the purposes specified in Recital (A).
4.12 Subsidiaries Save as a result of any merger or amalgamation effected
pursuant to Clause 12.1.4, the Shipowning Guarantors and any
Qualifying Guarantor(s) are and will remain throughout the Facility
Period directly or indirectly wholly owned subsidiaries of SNSA.
4.13 Material Adverse Change There has been no material adverse change in
the financial condition of the Indemnifier or the Guarantor from that
disclosed by the Guarantor to (inter alios) the Agent at a Syndicate
Bank Briefing held in London and New York on 7 August 2003 in relation
to the Guarantor's "Position Update and Blueprint Stage II".
4.14 Finance company Status (i) The Indemnifier complies with and shall
throughout the Facility Period continue to comply (to the extent
applicable), with the regulations of the Netherlands Ministry of
Finance dated 1 July 2001 (Vrijsteltrngsregeliflg Wet Toezicht
Kredietwezen 1992) with respect to finance companies and that the
application of the Guarantee Facility is and will throughout the
Facility Period continue to be in accordance with such regulations and
(ii) all notice requirements to the Dutch central bank pursuant to the
Foreign Financial Relations Act ("Wet Financiele Betrekkingen
Buitenland") 1994 (as the
34
same may be amended from time to time) have been complied with and
shall throughout the Facility Period continue to be complied with.
4.15 Guarantor's company Status That the Guarantor operates as a financial
holding company under Luxembourg law pursuant to the terms of a letter
of the "Administration de l'Enregistrement et des Domaines" dated 9
September 1994.
4.16 SNSA's company status That SNSA operates as a milliardaire holding
company and finance holding company under Luxembourg law pursuant to
the terms of a letter of "Administration de L'Enregistrement et des
Domaines" dated 14 September 1984.
5 Currency and Counter Indemnity
5.1 Currency Fluctuations If on a Commission Payment Date (as defined in
Clause 9.1) the Agent shall determine that the Equivalent Amount of
any part of the Bank's Obligations is greater than 100% of the
Original Dollar Amount of that part of the Bank's Obligations, the
Indemnifier shall immediately pay or cause to be paid to the Agent on
behalf of the Banks an amount in the relevant Permitted Currency equal
to the excess of such Equivalent Amount over such Original Dollar
Amount, which, in the case of any such payment in respect of the
Bank's Obligations, shall be held by the Agent as additional security
in respect of that part of the Bank's Obligations in question and
released to or to the order of the Indemnifier when the relevant Bank
Guarantee is cancelled and/or expires without any demand having been
made.
5.2 Counter-Indemnity In consideration of the Agent agreeing to issue each
Bank Guarantee, the Indemnifier unconditionally and irrevocably
agrees:
5.2.1 Indemnity at all times as a continuing security to keep the
Agent indemnified in the Relevant Currency against all
demands, claims, payments, costs, liabilities, damages,
losses, proceedings and expenses incurred or suffered by the
Agent directly or indirectly by reason of or in connection
with the Bank's Obligations;
5.2.2 Evidence of termination/reduction to supply the Agent
promptly with such evidence as the Agent may reasonably
require of the termination or reduction of the Agent's
liability under the Bank's Obligations; and
35
5.2.3 Payments and Interest to pay to the Agent on demand from
time to time all amounts payable by the Indemnifier under
Clause 5.2.1 with Interest on each of those amounts from the
date of the Agent's payment until the date of the
Indemnifier's payment to the Agent, before or after any
relevant judgment.
5.3 Counter Indemnity Notification The Agent shall notify the Indemnifier
each time it receives a demand under a Bank Guarantee specifying the
amount the Agent is required to pay under such Bank Guarantee. Upon
receipt of such notification the Indemnifier shall indemnify the Agent
for the amount specified in accordance with Clause 5.2.
6 Authority to pay
6.1 Direction to pay The Indemnifier irrevocably directs the Agent to make
such payments and comply with such demands or claims made on the Agent
in respect of or purporting to be in respect of the Bank's Obligations
as the Agent in its absolute discretion (but acting always in good
faith) thinks fit without any reference to or further authority or
direction from the Indemnifier, or any necessity to obtain the
Indemnifier's confirmation or verification, and notwithstanding that
the Indemnifier may have disputed the Agent's liability to pay or
comply or that all or any part of the Bank's Obligations may not
legally exist or be legally binding on the Agent. The Indemnifier
agrees that the Agent may treat the Bank's Obligations as payable on
first demand and that any such payment or compliance or purported
compliance by the Agent shall as between the Agent and the Indemnifier
be conclusive evidence that the Agent was liable to make the payment
or comply with the demand or claim.
6.2 Underlying transaction The Indemnifier agrees that the Agent shall be
concerned only with the demand or claim made on it and, where a demand
or claim must be accompanied by any other document, with any such
document, in each case as presented to the Agent, and not with any
transaction to which the demand, claim or document relates, or as to
whether the payment demanded or the claim made was in fact due.
6.3 Propriety of demand The Agent shall be entitled to rely without
further enquiry on any demand, claim, document or communication
believed by it to be genuine and correct and to have been signed or
otherwise executed or made by the proper
36
person. In particular, but without limitation, the Agent shall not be
obliged to investigate the propriety of any such demand, claim,
document or communication or the authority or identity of the person
producing, claiming, signing or making such demand, claim, document or
communication.
6.4 Funding and cash cover The Indemnifier undertakes at any time (i)
after the occurrence and during the continuation of an Event of
Default and/or (ii) a Change of Control occurs, to pay to the Agent or
to its order on demand the amount specified in that demand (in the
currency so specified):-
(a) to give the Agent cash cover for all or (if the Agent so
specifies) part of the amount of the Bank's Obligations; and/or
(b) to put the Agent in funds to make a payment which the Agent is
authorised by this Agreement to make in connection with the
Bank's Obligations,
provided that any monies received by the Agent pursuant to this Clause
or Clause 14.1 in excess of the amount of the Bank's Obligations due
and owing at that time (the "Excess Amount") shall be held by the
Agent by way of retention on account of the Indebtedness in accordance
with Clause 15.4. The Agent may in its sole discretion release the
Excess Amount to the Indemnifier if the relevant Event of Default has
been remedied and no other Event of Default or Potential Event of
Default has occurred or is in existence at such time.
6.5 Security over funding/cash cover The Indemnifier undertakes, at its
own expense, to execute such documents as the Agent may require in
order to create or perfect in the Agent's favour a restriction on
withdrawal or repayment of any amount paid by the Indemnifier under
Clause 6.4 and/or a security in or over such amount, in each case to
secure or support the Indemnifier's liabilities to the Agent under
this Agreement.
6.6 Currency The Agent may, if called on to make a payment or to comply
with a demand or claim in connection with the Bank's Obligations,
purchase in accordance with its usual practice the amount of the
Relevant Currency necessary to make that payment or to comply with
that demand or claim (unless the Agent has already been put in funds
by the Indemnifier pursuant to Clause 6.4).
37
7 Interest
7.1 Default Rate If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event of
Default, bear interest up to the date of actual payment (both before
and after judgment) at the Default Rate, compounded at such intervals
as the Agent shall in its reasonable discretion determine, which
interest shall be payable from time to time by the Indemnifier to the
Agent on behalf of the Banks on demand.
7.2 Determinations conclusive Each determination of an interest rate made
by the Agent in accordance with Clause 7 shall (save in the case of
manifest error or on any question of law) be final and conclusive.
8 Guarantee and Indemnity
8.1 The Indemnifier's Obligations
In consideration of the agreement of the Agent and the Banks to make
the Guarantee Facility available to the Indemnifier, the Guarantor:-
8.1.1 irrevocably and unconditionally guarantees to discharge on
demand the Indemnifier's Obligations, including Interest
from the date of demand until the date of payment, both
before and after judgement; and
8.1.2 agrees, as a separate and independent obligation, that, if
any of the Indemnifier's Obligations are not recoverable
from the Guarantor under Clause 8.1.1 for any reason, the
Guarantor will be liable to the Finance Parties as a
principal debtor by way of indemnity for the same amount as
that for which the Guarantor would have been liable had
those Indemnifier's Obligations been recoverable and agrees
to discharge its liability under this Clause 8.1.2 on demand
together with Interest from the date of demand until the
date of payment, both before and after judgement.
8.2 Continuing Security
The Guarantee is a continuing security for the full amount of the
Indemnifier's Obligations from time to time and shall remain in force
notwithstanding the liquidation of the Indemnifier or any change in
the constitution of the Indemnifier
38
or of any Finance Party or the absorption of or amalgamation by any
Finance Party in or with any other entity or the acquisition of all or
any part of the assets or undertaking of any Finance Party by any other
entity.
8.3 Preservation of Guarantor's Liability
8.3.1 The Banks may without the Guarantor's consent and without
notice to the Guarantor and without in any way releasing or
reducing the Guarantor's Liabilities:-
(a) amend, novate, supplement or replace all or any of the
Indemnifier's Security Documents;
(b) increase or reduce the amount of the Guarantee Facility
or vary the terms and conditions for its issuance
(including, without limitation the rate and/or method
of calculation of interest or commission payable on the
Guarantee Facility);
(c) allow to the Indemnifier or to any other person any
time or other indulgence;
(d) renew, vary, release or refrain from enforcing any of
the Indemnifier's Security Documents or any other
security, guarantee or indemnity which the Agent may
now or in the future hold from the Indemnifier or from
any other person;
(e) compound with the Indemnifier or any other person;
(f) enter into, renew, vary or terminate any other
agreement or arrangement with the Indemnifier or any
other person; or
(g) make any concession to the Indemnifier or do or omit or
neglect to do anything which might, but for this
provision, operate to release or reduce the liability
of the Guarantor under the Guarantee.
8.3.2 The liability of the Guarantor under the Guarantee shall not
be affected by: -
39
(a) the absence of or any defective, excessive or irregular
exercise of any of the powers of the Indemnifier or of
any Surety;
(b) any security given or payment made to the Finance
Parties or any of them by the Indemnifier or any other
person being avoided or reduced under any law (whether
English or foreign) relating to bankruptcy or
insolvency or analogous circumstance in force from time
to time;
(c) the liquidation, administration, receivership or
insolvency of the Guarantor;
(d) any other security, guarantee or indemnity now or in
the future held by the Finance Parties or any of them
being defective, void or unenforceable, or the failure
of the any Finance Party to take any security,
guarantee or indemnity;
(e) any compromise or arrangement under Part I or Part VII
of the Insolvency Xxx 0000 or section 425 of the
Companies Xxx 0000 (or any statutory modification or
re-enactment of either of them for the time being in
force) or under any analogous provision of any foreign
law;
(f) the novation of any of the Indemnifier's Obligations;
(g) anything which would not have released or reduced the
liability of the Guarantor to the Finance Parties had
the liability of the Guarantor under Clause 8.1.1 been
as a principal debtor of the Finance Parties and not as
a guarantor.
8.4 Preservation of Banks' Rights
8.4.1 The Guarantee is in addition to any other security,
guarantee or indemnity now or in the future held by the
Finance Parties in respect of the Indemnifier's Obligations,
whether from the Indemnifier, the Guarantor or any other
person, and shall not merge with, prejudice or be prejudiced
by any such security, guarantee or indemnity or any
contractual or legal right of each Finance Party.
40
8.4.2 Any release, settlement, discharge or arrangement relating
to the liabilities of the Guarantor under the Guarantee
shall be conditional on no payment, assurance or security
received by the Finance Parties in respect of the
Indemnifier's Obligations being avoided or reduced under any
law (whether English or foreign) in force from time to time
relating to bankruptcy, insolvency or any (in the opinion of
the Agent) analogous circumstance and after any such
avoidance or reduction the Finance Parties shall be entitled
to exercise all of their rights, powers, discretions and
remedies under or pursuant to the Guarantee and/or any other
rights, powers, discretions or remedies which they would
otherwise have been entitled to exercise, as if no release,
settlement, discharge or arrangement had taken place.
8.4.3 Following the discharge of the Indemnifier's Obligations,
the Finance Parties shall be entitled to retain any security
which they may hold for the liabilities of the Guarantor
under the Guarantee until the Finance Parties are satisfied
in their reasonable discretion that they will not have to
make any payment under any law referred to in Clause 8.4.2.
8.4.4 Until all claims of the Finance Parties in respect of the
Indemnifier's Obligations have been discharged in full:
(a) the Guarantor shall not be entitled to participate in
any security held or sums received by any Finance Party
in respect of all or any part of the Indemnifier's
Obligations;
(b) the Guarantor shall not stand in the place of, or be
subrogated for, any of the Finance Parties in respect
of any security nor take any step to enforce any claim
against the Indemnifier or any Surety (or the estate or
effects of any such person) nor claim or exercise any
right of set off or counterclaim against the
Indemnifier or any Surety nor make any claim in the
bankruptcy or liquidation of the Indemnifier or any
Surety in respect of any sums paid by the Guarantor to
the Finance Parties or any of them or in respect of any
sum which includes the proceeds of realisation of any
security at any time held by the Finance Parties or any
of them in respect of all or any part of the
Guarantor's Liabilities; and
41
(c) the Guarantor shall not take any steps to enforce any
claim which it may have against the Indemnifier or any
Security Party without the prior written consent of the
Agent, and then only on such terms and subject to such
conditions as the Agent may impose.
8.4.5 The Guarantor's Liabilities shall be continuing for all
purposes (including Interest) and every sum of money which
may now or in the future be or become due or owing to the
Finance Parties by the Indemnifier under the Security
Documents to which the Indemnifier is a party (or which
would have become due or owing had it not been for the
bankruptcy, liquidation or insolvency of the Indemnifier)
shall be deemed to continue due and owing to the Finance
Parties by the Indemnifier until such sum is actually repaid
to the Finance Parties, notwithstanding the bankruptcy,
liquidation or insolvency of the Indemnifier.
8.4.6 The Finance Parties may, but shall not be obliged to, resort
for their own benefit to any other means of payment at any
time and in any order they think fit without releasing or
reducing the Guarantor's Liabilities.
8.4.7 The Finance Parties may enforce the Guarantee either before
or after resorting to any other means of payment or
enforcement and, in the latter case, without entitling the
Guarantor to any benefit from or share in any such other
means of payment for so long as the Indemnifier's
Obligations have not been discharged in full.
8.5 Other Security
The Guarantor confirms that it has not taken and will not take without
the prior written consent of the Agent (and then only on such terms
and subject to such conditions as the Agent may impose) any security
from the Indemnifier or from any Surety in connection with the
Guarantee and any security taken by the Guarantor in connection with
the Guarantee notwithstanding this Clause shall be held by the
Guarantor in trust for the Agent on behalf of the Finance Parties
absolutely as a continuing security for the Guarantor's Liabilities.
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9 Fees
9.1 Guarantee Commission The Indemnifier shall pay to the Agent a
guarantee commission calculated at the rate of (i) one point six two
five per centum (1.625%) per annum in respect of any Bank Guarantee
expiring on a date falling on or less than thirty nine (39) months
after its Issue Date or (ii) two point five per centum (2.5%) per
annum in respect of any Bank Guarantee expiring on a date falling more
than thirty nine (39) months after its Issue Date (the "Guarantee
Commission") on the maximum amount for which each Bank Guarantee is
issued. The Guarantee Commission will accrue from day to day on the
basis of a 360 day year and the actual number of days elapsed and
shall be paid quarterly in arrears with a first payment due on the
date which is three months after the date of the issue of the first
Bank Guarantee and a final pro rata payment on the last day of the
Facility Period (each a "Commission Payment Date").
9.2 Guarantee Commitment Commission The Indemnifier shall pay to the Agent
a guarantee commitment commission equal to nought point seven three
one two five (0.73125%) payable on the daily unissued portion of the
Guarantee Facility available for issuance from the date of this
Agreement. Such guarantee commitment commission will accrue from day
to day on the basis of a 360 day year and the actual number of days
elapsed and shall be paid quarterly in arrears. The first payment
shall be due on 1 November 2003 and a final pro rata payment shall be
due on the last day of the Facility Period.
9.3 Bank Guarantee Issue Fee The Indemnifier shall pay to the Agent on the
date of issue of each Bank Guarantee an issue fee equal to nought
point three five per cent (0.35%) of the amount for which each Bank
Guarantee is issued. Nought point one per cent (0.10%) of each such
issue fee shall be for the sole account of the Agent.
10 Security Documents
10.1 As security for the repayment of the Indebtedness, the Indemnifier
shall execute and deliver to the Agent or cause to be executed and
delivered to the Agent, on or before the date on which the Cash
Collateral is released to the Indemnifier the following Security
Documents in such forms and containing such terms and conditions as
the Agent shall require:-
43
10.1.1 the Mortgages a first priority or first preferred mortgage
over each Barge Vessel and the Avenir Vessel;
10.1.2 the Assignments a deed of assignment of the Insurances,
Earnings and Requisition Compensation of each Barge Vessel
and the Avenir Vessel;
10.1.3 the Shipowners' Guarantee the guarantee and indemnity of the
Shipowning Guarantors; and
10.1.4 the SNSA Guarantee the joint and several guarantee and
indemnity of SNSA and SNTG.
10.2 As security for the repayment of the Indebtedness, the Indemnifier
shall execute and deliver to the Agent or cause to be executed and
delivered to the Agent, on or before the first Issue Date, the
following Security Documents in such forms and containing such terms
and conditions as the Agent shall require:-
10.2.1 the Mortgages a first priority or first preferred mortgage
over each Qualifying Vessel;
10.2.2 the Assignments a deed of assignment of the Insurances,
Earnings and Requisition Compensation of each Qualifying
Vessel;
10.2.3 the Qualifying Guarantee the guarantee and indemnity of the
Qualifying Guarantor(s); and
with such other Security Documents as the Agent may require in its
absolute discretion.
11 Agency and Trust
11.1 Appointment Each of the Banks appoints the Agent its agent for the
purpose of administering the Facility and the Security Documents and
authorises the Agent and its directors, officers, employees and agents
acting on the instructions from time to time of an Instructing Group,
and subject to Clauses 11.4 and 11.19, to execute the Security
Documents on its behalf and to exercise all rights, powers,
discretions and remedies vested in the Banks under or pursuant to the
Security Documents, together with all powers reasonably incidental to
them.
44
11.2 Authority Subject to Clause 11.4, each of the Banks irrevocably
authorises the Agent, acting on the instructions from time to time of
an Instructing Group:-
11.2.1 to give or withhold any consents or approvals;
1l.2.2 to exercise, or refrain from exercising, any discretions;
and
11.2.3 to collect, receive, release or pay any money;
under or pursuant to any of the Security Documents with the prior
written consent of an Instructing Group. The Agent shall have no
duties or responsibilities as agent or as security trustee other than
those expressly conferred on it by the Security Documents and shall
not be obliged to act on any instructions if to do so would, in the
opinion of the Agent, be contrary to any provision of the Security
Documents or to any law, or would expose the Agent to any actual or
potential liability to any third party.
11.3 Trust The Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this
Clause, the Agent holds the Trust Property on trust for the Banks, in
accordance with their respective Proportionate Shares, absolutely.
Each of the Banks agrees that the obligations, rights and benefits
vested in the Agent in its capacity as security trustee shall be
performed and exercised in accordance with this Clause. The Agent in
its capacity as security trustee shall have the benefit of all of the
provisions of this Agreement benefiting it in its capacity as agent
for the Banks, and all the powers and discretions conferred on
trustees by the Trustee Xxx 0000 (to the extent not inconsistent with
this Agreement). In addition:
1l.3.1 the Agent (and any attorney, agent or delegate of the Agent)
may indemnify itself or himself out of the Trust Property
against all liabilities, costs, fees, damages, charges,
losses and expenses sustained or incurred by it or him in
relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported
exercise of the rights, trusts, powers and discretions
vested in the Agent or any other such person by or pursuant
to the Security Documents or in respect of anything else
done or omitted to be done in any way relating to the
Security Documents; and
45
11.3.2 the Banks acknowledge that the Agent shall be under no
obligation to insure any property nor to require any other
person to insure any property and shall not be responsible
for any loss which may be suffered by any person as a result
of the lack or insufficiency of any insurance; and
11.3.3 the Agent and the Banks agree that the perpetuity period
applicable to the trusts declared by this Agreement shall be
the period of eighty years from the Execution Date.
11.4 Limitations on authority Except with the prior written consent of each
of the Banks, the Agent shall not be entitled to:-
11.4.1 release or vary any security given for the Indemnifier's
obligations under this Agreement; nor
11.4.2 except as otherwise provided in the Security Documents,
agree to waive the payment of any sum of money payable by
any of the Security Parties under the Security Documents;
nor
11.4.3 change the meaning of the expression "Instructing Group";
nor
11.4.4 exercise, or refrain from exercising, any discretion, or
give or withhold any consent, the exercise or giving of
which is, by the terms of this Agreement, expressly reserved
to the Banks; nor
11.4.5 extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security
Documents; nor
11.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the
obligations of a Bank under any of the Security Documents;
nor
11.4.7 agree to change the currency in which any sum is payable
under the Security Documents (other than in accordance with
the terms of the Security Documents); nor
11.4.8 agree to amend this Clause 11.4; nor
46
11.4.9 agree to amend Clauses 9.1, 13.1 or 19.2.3; nor
11.4.10 11.4.10 save in relation to the Xxxxx Bank Guarantees agree
to issue any Bank Guarantee where its expiry date exceeds
thirty nine (39) months from its Issue Date; nor
11.4.11 waive or delay delivery of any condition precedent required
to be delivered to the Agent pursuant to Clause 3.1.
11.5 Liability Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Banks for anything done or
omitted to be done by the Agent under or in connection with the
Security Documents unless as a result of the Agent's wilful misconduct
or gross negligence.
11.6 Acknowledgement Each of the Banks acknowledges that:
11.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents
or by any other person acting or purporting to act on behalf
of the Agent to induce it to enter into any of the Security
Documents;
11.6.2 it has made and will continue to make without reliance on
the Agent, and based on such documents and other evidence as
it considers appropriate, its own independent investigation
of the financial condition and affairs of the Security
Parties in connection with the making and continuation of
the Facility;
11.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
11.6.4 the Agent shall not have any duty or responsibility at any
time to provide it with any credit or other information
relating to any of the Security Parties unless that
information is received by the Agent pursuant to the express
terms of the Security Documents.
Each of the Banks agrees that it will not assert nor seek to assert
against any director, officer, employee or agent of the Agent or
against any other person acting or purporting to act on behalf of the
Agent any claim which it might have against them in respect of any of
the matters referred to in this Clause.
47
11.7 Limitations on responsibility The Agent shall have no responsibility
to any of the Security Parties or to the Banks on account of:-
11.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the
Security Documents;
11.7.2 the financial condition of any of the Security Parties;
11.7.3 the completeness or accuracy of any statements,
representations or warranties made in or pursuant to any of
the Security Documents, or in or pursuant to any document
delivered pursuant to or in connection with any of the
Security Documents;
11.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any
document executed or delivered pursuant to or in connection
with any of the Security Documents.
11.8 The Agent's rights The Agent may:-
11.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to
any of the Security Documents are true and complete, unless,
in its capacity as the Agent, it has acquired actual
knowledge to the contrary; and
11.8.2 assume that no Event of Default or Potential Event of
Default has occurred unless, in its capacity as the Agent,
it has acquired actual knowledge to the contrary; and
11.8.3 rely on any document or Communication believed by it to be
genuine; and
11.8.4 rely as to legal or other professional matters on opinions
and statements of any legal or other professional advisers
selected or approved by it; and
11.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any of the Security
Parties on a certificate signed by or on behalf of that
Security Party; and
48
11.8.6 refrain from exercising any right, power, discretion or
remedy unless and until instructed to exercise that right,
power, discretion or remedy and as to the manner of its
exercise by the Banks (or, where applicable, by an
Instructing Group) and unless and until the Agent has
received from the Banks any payment which the Agent may
require on account of, or any security which the Agent may
require for, any costs, claims, expenses (including legal
and other professional fees) and liabilities which it
considers it may incur or sustain in complying with those
instructions.
11.9 The Agent's duties The Agent shall:-
11.9.1 if requested in writing to do so by a Bank, make enquiry and
advise the Banks as to the performance or observance of any
of the provisions of the Security Documents by any of the
Security Parties or as to the existence of an Event of
Default; and
11.9.2 inform the Banks promptly of any Event of Default of which
the Agent has actual knowledge; and
11.9.3 inform the Banks promptly of any disclosures in writing
received by the Agent pursuant to Clause 4.7.
11.10 No deemed knowledge The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation or
warranty made or deemed repeated by any of the Security Parties or
actual knowledge of the occurrence of any Event of Default or
Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent.
11.11 Other business The Agent may, without any liability to account to the
Banks, generally engage in any kind of banking or trust business with
any of the Security Parties or any of their respective Subsidiaries or
associated companies or with a Bank as if it were not the Agent.
11.12 Indemnity The Banks shall, promptly on the Agent's request, reimburse
the Agent in their respective Proportionate Shares, for, and keep the
Agent fully indemnified in respect of:-
49
11.12.1 all amounts payable by the Indemnifier to the Agent pursuant
to Clause 17.6 or Clause 19 to the extent that those amounts
are not paid by the Indemnifier;
11.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security
Documents, or the performance of its duties and obligations,
or the exercise of its rights, powers, discretions or
remedies under or pursuant to any of the Security Documents;
or in connection with any action taken or omitted by the
Agent under or pursuant to any of the Security Documents,
unless in any case those liabilities, damages, costs or
claims arise solely from the Agent's wilful misconduct or
gross negligence.
11.13 Employment of agents In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of money and
documents and the payment of money) and to act or refrain from taking
action in reliance on the opinion of, or advice or information
obtained from, any lawyer, banker, broker, accountant, valuer or any
other person believed by the Agent in good faith to be competent to
give such opinion, advice or information.
11.14 Distribution of payments The Agent shall pay promptly to the order of
each of the Banks that Bank's Proportionate Share of every sum of
money received by the Agent pursuant to the Security Documents or the
Mortgagees' Insurances (with the exception of any amounts payable
pursuant to Clause 9.2 and any amounts which, by the terms of the
Security Documents, are paid to the Agent for the account of the Agent
alone or specifically for the account of one or more Banks) and until
so paid such amount shall be held by the Agent on trust absolutely for
that Bank.
11.15 Reimbursement The Agent shall have no liability to pay any sum to a
Bank until it has itself received payment of that sum. If, however,
the Agent does pay any sum to a Bank on account of any amount
prospectively due to it pursuant to Clause 11.14 before it has itself
received payment of that amount, and the Agent does not in fact
receive payment within five Business Days after the date on
50
which that payment was required to be made by the terms of the
Security Documents or the Mortgagees' Insurances, the recipient will,
on demand by the Agent, refund to the Agent an amount equal to the
amount received by it, together with an amount sufficient to reimburse
the Agent for any amount which the Agent may certify that it has been
required to pay by way of interest on money borrowed to fund the
amount in question during the period beginning on the date on which
that amount was required to be paid by the terms of the Security
Documents or the Mortgagees' Insurances and ending on the date on
which the Agent receives reimbursement.
11.16 Redistribution of payments Unless otherwise agreed between the
Finance Parties, if at any time a Bank receives or recovers by way of
set-off, the exercise of any lien or otherwise (other than from any
assignee or transferee of or sub-participant in that Bank's
Commitment), an amount greater than that Bank's Proportionate Share of
any sum due from any of the Security Parties under the Security
Documents (the amount of the excess being referred to in this Clause
as the "Excess Amount") then:-
11.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
11.16.2 that Bank shall pay to the Agent an amount equal to the
Excess Amount within ten days of its receipt or recovery of
the Excess Amount; and
11.16.3 the Agent shall treat that payment as if it were a payment
by the Security Party in question on account of the sum owed
to the Banks as aforesaid and shall account to the Banks in
respect of the Excess Amount in accordance with the
provisions of this Clause.
However, if a Bank has commenced any Proceedings to recover sums owing
to it under the Security Documents and, as a result of, or in
connection with, those Proceedings has received an Excess Amount, the
Agent shall not distribute any of that Excess Amount to any other Bank
which had been notified of the Proceedings and had the legal right to,
but did not, join those Proceedings or commence and diligently
prosecute separate Proceedings to enforce its rights in the same or
another court.
51
11.17 Rescission of Excess Amount If all or any part of any Excess Amount
is rescinded or must otherwise be restored to any of the Security
Parties or to any other third party, the Banks which have received any
part of that Excess Amount by way of distribution from the Agent
pursuant to this Clause shall repay to the Agent for the account of
the Bank which originally received or recovered the Excess Amount, the
amount which shall be necessary to ensure that the Banks share
rateably in accordance with their Proportionate Shares in the amount
of the receipt or payment retained, together with interest on that
amount at a rate equivalent to that (if any) paid by the Bank
receiving or recovering the Excess Amount to the person to whom that
Bank is liable to make payment in respect of such amount, and Clause
11.16.3 shall apply only to the retained amount.
11.18 Proceedings Each of the Finance Parties shall notify one another of
the proposed commencement of any Proceedings under any of the Security
Documents prior to their commencement. No such Proceedings may be
commenced without the prior written consent of an Instructing Group.
11.19 Instructions Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the Banks
or of an Instructing Group each of the Banks shall provide the Agent
with instructions within five Business Days of the Agent's request
(which request may be made orally or in writing). If a Bank does not
provide the Agent with instructions within that period, (I) that Bank
shall be bound by the decision of the Agent, (ii) that Bank shall have
no vote for the purposes of this Clause and (iii) the combined
Proportionate Shares of the other Banks who provided such instructions
shall be deemed to contribute 100%. Nothing in this Clause shall limit
the right of the Agent to take, or refrain from taking, any action
without obtaining the instructions of the Banks if the Agent in its
discretion considers it necessaly or appropriate to take, or refrain
from taking, such action in order to preserve the rights of the Banks
under or in connection with the Security Documents. In that event, the
Agent will notify the Banks of the action taken by it as soon as
reasonably practicable, and the Banks agree to ratify any action taken
by the Agent pursuant to this Clause.
11.20 Communications Any Communication under this Clause shall be given,
delivered, made or served, in the case of the Agent (in its capacity
as Agent or as one of the Banks), and in the case of the other Banks,
at the address indicated in
52
Schedule 1 or such other addresses as shall be duly notified in
writing to the Agent on behalf of the Banks.
11.21 Payments All amounts payable to a Bank under this Clause shall be
paid to such account at such bank as that Bank may from time to time
direct in writing to the Agent.
11.22 Retirement Subject to a successor being appointed in accordance with
this Clause, the Agent may retire as agent and/or security trustee at
any time without assigning any reason by giving to the Indemnifier and
the other Finance Parties notice of its intention to do so, in which
event the following shall apply:-
11.22.1 with the consent of the Indemnifier, not to be unreasonably
withheld, the other Finance Parties may within thirty days
after the date of the Agent's notice appoint a successor to
act as agent and/or security trustee or, if they fail to do
so with the consent of the Indemnifier, not to be
unreasonably withheld, the Agent may appoint any other bank
or financial institution as its successor;
11.22.2 the resignation of the Agent shall take effect
simultaneously with the appointment of its successor on
written notice of that appointment being given to the
Indemnifier and the other Finance Parties;
11.22.3 the Agent shall thereupon be discharged from all further
obligations as agent and/or security trustee but shall
remain entitled to the benefit of the provisions of this
Clause;
11.22.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been
a party to this Agreement.
11.23 No fiduciary relationship Except as provided in Clauses 11.3 and
11.14, the Agent shall not have any fiduciary relationship with or be
deemed to be a trustee of or for a Bank and nothing contained in any
of the Security Documents shall constitute a partnership between any
two or more Banks or between the Agent and any Bank.
53
11.24 The Agent as a Bank The expression "the Banks" when used in the
Security Documents includes the Agent in its capacity as one of the
Banks. The Agent shall be entitled to exercise its rights, powers,
discretions and remedies under or pursuant to the Security Documents
in its capacity as one of the Banks in the same manner as any other
Bank and as if it were not also the Agent.
11.25 The Agent as security trustee Unless the context otherwise requires,
the expression "the Agent" when used in the Security Documents
includes the Agent acting in its capacities both as agent and security
trustee.
12 Covenants
Each of the Indemnifier and the Guarantor covenants with the Finance
Parties in the following terms.
12.1 Negative covenants
Neither the Indemnifier nor the Guarantor, will:-
12.1.1 no third party rights without the Banks' prior written
consent permit any member of the SO Group to create or
permit to arise or continue any Encumbrance on or over all
or any part of its assets or undertaking (including, without
limitation accounts receivable by that member) except (I)
any Encumbrance existing on the date of this Agreement and
listed in Appendix B or (ii) any Encumbrance relating to
assets which become the property of the SO Group after the
date of this Agreement (including accounts receivable
attributable thereto where such accounts receivables
security interest is ancillary to the security interest in
the associated fixed costs as part of an asset based
financing) and (iii) Permitted Liens; nor
12.1.2 chartering without the prior written consent of an
Instructing Group, (a) charter any Vessel or permit any
Vessel to be chartered on any bareboat charter, or otherwise
for a period exceeding (or inclusive of any extension
options, capable of exceeding) twelve (12) months) provided
that committing a Vessel for several periods, each of less
than twelve months but for an aggregated period exceeding
(12) months or chartering a Vessel to a member of the SNSA
Group for a period in
54
excess of twelve (12) months shall not be deemed to be a
breach of this Clause (together the "Permitted Charters") or
(b) following the occurrence and during the continuation of
an Event of Default, let any Vessel on charter (including a
Permitted Charter unless the same was entered into prior to
the occurrence of any such Event of Default) or renew or
extend any charter or other contract of employment of any
such Vessel (nor agree to do so); nor
12.1.3 no change in management without the prior written consent of
an Instructing Group, permit the appointment of anyone other
than the Managers as commercial or technical managers of the
Vessels, nor terminate or amend any Management Agreement
and/or the arrangements for the commercial or technical
management of the Vessels in a manner which is, in the
reasonable opinion of the Agent, detrimental to the interest
of the Finance Parties or any of them, nor permit the
Managers to sub-contract or delegate the commercial or
technical management of any Vessel to any third party
outside of the SNSA Group provided that any termination or
amendment of any Management Agreement and/or management
arrangements referred to above with a member of the SNSA
Group shall not be deemed to be detrimental to the interests
of the Finance Parties or any of them where any new manager
(being within the SNSA Group) enters into an agreement with
the Agent subordinating its rights in such Vessel to those
of the Banks in terms substantially the same as contained in
those agreements/arrangements entered into immediately
before such amendment; nor
12.1.4 merger or amalgamation without the prior written consent of
an Instructing Group, permit any merger or amalgamation
unless (i) the Guarantor, the Indemnifier, a Shipowning
Guarantor or any Qualifying Guarantor(s), as the case may
be, remains the surviving entity following any such merger
or amalgamation (or if the merger or amalgamation involves
more than one of the Shipowning Guarantors or Qualifying
Guarantor(s) as the case may be, then one of the Shipowning
Guarantors or the Qualifying Guarantor(s) (as the case may
be) remains the surviving entity) and (ii) such surviving
entity is not divested of any
55
material part of the assets or operations of such member of
the SNSA Group and (iii) in the case of the Guarantor only,
such merger or amalgamation has been approved by a duly
passed resolution of the Guarantor's shareholders; nor
12.1.5 no sale of Vessels/Shipowning Guarantors/Qualifying
Guarantor(s) without the prior written consent of the Banks
sell or cause to be sold or, dispose or caused to be
disposed of in whole or in part, any Vessel, Shipowning
Guarantor or Qualifying Guarantor(s) nor agree to do so
except where (i) the Guarantee Facility Amount is reduced
pursuant to Clause 2.6 or (ii) the sale or disposal, in
whole or in part, is made to a member of the SNSA Group who
will become a Shipowning Guarantor or Qualifying Guarantor
upon the acquisition of such Vessel and who will execute and
deliver to the Agent a Shipowners'/Qualifying Guarantee, a
Mortgage and an Assignment in respect of such Vessel in
substantially the same terms as those Security Documents
already executed in favour of and delivered to the Agent
which shall be accompanied by such corporate documents and
legal opinions as the Agent may request (and upon any sale
or disposal of a Shipowning Guarantor, a Qualifying
Guarantor or its Vessel such Shipowning Guarantor's or
Qualifying Guarantor(s)' obligations under the Security
Documents to which it is a party will terminate provided
that no Event of Default has occurred and the provisions of
Clause 12.1.5(i) or (ii), as the case may, be have been
fully complied with) or (iii) any such Vessel is replaced by
a similar asset acceptable to the Banks in their sole
discretion of equal or greater value.
12.2 Positive covenants
12.2.1 Registration of Vessels Each of the Indemnifier and the
Guarantor undertakes to procure the maintenance of the
registration of the Vessels under the flags and ownerships
indicated in Schedule 2 for the duration of the Facility
Period unless otherwise approved by an Instructing Group in
writing.
12.2.2 Additional security If and so often as the aggregate of any
Valuations of the Vessels plus the value of any additional
security (other than cash)
56
for the time being provided to the Banks (or to the Agent on
their behalf) pursuant to this Clause shall be less than one
hundred and twenty per centum (120%) of the Original Dollar
Amount (less the amount of any cash deposited as additional
security pursuant to this Clause) the Indemnifier will,
within thirty days of the request of the Agent to do so, at
the Indemnifier's option:-
(a) pay to the Agent or to its nominee a cash deposit in
the amount of the shortfall to be secured in favour of
the Banks (or of the Agent on their behalf) as
additional security for the payment of the
Indebtedness; or
(b) give to the Banks (or to the Agent on their behalf)
other additional security in amount and form acceptable
to the Banks in their discretion; or
(c) prepay the amount of the Indebtedness which will ensure
that the aggregate of the Valuations of the Vessels
plus the value of any such additional security (other
than cash) is not less than one hundred and twenty per
centum (120%) of the Original Dollar Amount (less the
amount of any cash deposited as additional security
pursuant to this Clause).
For the purpose of determining the value of a Vessel under
this Clause, where such Vessel constitutes a Total Loss its
value shall be deemed to be the lesser of (i) the last
Valuation in respect of that Vessel prior to it becoming a
Total Loss or (ii) the amount of insurance proceeds expected
to be paid in respect of any insurance claim relating to the
Total Loss of such Vessel.
The value of any additional security provided pursuant to
this Clause shall be determined by the Agent in its
discretion. Provided that, where the Indemnifier has
provided additional security pursuant to this Clause, the
Indemnifier may request that the Agent obtain new Valuations
on a date falling not earlier than six months after the date
such additional security was provided. Where requested by
the Indemnifier to obtain new Valuations pursuant to this
Clause the Agent
57
shall obtain such new Valuations at the cost and expense of
the Indemnifier. If the aggregate of the new Valuations of
the Vessels plus the value of any additional security (other
than cash) (the "New Security Amount") is greater than one
hundred and twenty per cent (120%) of the Original Dollar
Amount (less the amount of any cash deposited as additional
security pursuant to this Clause) (the "Security Maintenance
Amount") provided that no Event of Default has occurred and
is continuing, the Agent (provided that the Agent shall
firstly release any cash collateral deposited with it
pursuant to this Clause) shall release to the Indemnifier,
upon the Indemnifier's written request and at the
Indemnifier's expense, any such additional security as the
Agent selects, such that after its release the New Security
Amount will at least be equal to the Security Maintenance
Amount, provided, however, that the value of such security
to be released is not less than five hundred thousand
Dollars ($500,000). For the purposes of this Clause the
Indemnifier shall at its expense throughout the Facility
Period deliver to the Agent a Valuation in respect of each
Vessel (i) at least annually after the Execution Date and
(ii) at any time reasonably requested by the Agent.
12.2.3 Financial statements The Indemnifier will supply to the
Agent without request (together in each case, where the item
is generally available in printed form, with a copy for
distribution by the Agent to each of the Banks):-
(a) its annual unaudited financial statements for each
financial year of the Indemnifier ending during the
Facility Period, containing (amongst other things) the
indemnifier's profit and loss account for, and balance
sheet at the end of, each such financial year, prepared
in accordance with generally accepted accounting
principles and practices applicable to companies
incorporated in the Netherlands consistently applied,
in each case within one hundred and eighty days of the
end of the financial year to which they relate and such
financial statements shall accurately and fairly
represent the financial condition of the Indemnifier;
and
58
(b) on a consolidated basis:-
(i) the Guarantor's annual audited accounts prepared
in accordance with US GAAP within one hundred and
eighty days of the end of the financial year to
which they relate and such financial statements
shall accurately and fairly represent the
financial condition of the SO Group; and
(ii) the Guarantor's unaudited quarterly financial
statements (including cash flow analysis) not
later than 90 days after the end of the relevant
fiscal quarter; and
(c) the SO Group's consolidated budget on an annual basis;
and
(d) any financial information delivered by the Guarantor to
its shareholders;
(e) a cash flow projection for the following three years to
be provided every twelve months during the Facility
Period;
(f) the Guarantor's monthly unaudited internal management
accounting reports comprising the consolidated
statement of profit and loss and the consolidated
statement of cashflow as soon as practicable but in any
event not later than 35 days after the month end to
which they relate; and
(g) a monthly update, within 35 days of month end, on (i)
the Guarantor's receivables and/or collections
substantially in the form of Appendix F and (ii)
projects which have incurred downgrades if and when
they exist.
12.2.4 Other information The Indemnifier will promptly supply to
the Agent copies of all financial and other information from
time to time given by the Guarantor to its shareholders and
such information and explanations as an Instructing Group
may from time to time reasonably require in connection with
the operation of the Vessels and the Indemnifier's and the
Guarantor's profit and liquidity, and will procure that the
Agent be
59
given the like information and explanations relating to all
other Security Parties.
12.2.5 Evidence of current COFR Without limiting the Indemnifier's
obligations under Clause 12.2.4, the Indemnifier will from
time to time on the request of the Agent provide the Agent
with such evidence as the Agent may reasonably require that
each Vessel operating in the waters of the United States of
America has a valid and current Certificate of Financial
Responsibility pursuant to the United States Oil Pollution
Xxx 0000.
12.2.6 LSM Code compliance The Indemnifier will:-
(a) procure that Vessel, where applicable, remains for the
duration of the Facility Period subject to a SMS;
(b) maintain a valid and current SMC for Vessel, where
applicable, throughout the Facility Period;
(c) if it is not itself the Company, procure that the
Company maintains a valid and current DOC throughout
the Facility Period;
(d) promptly report to the Agent in writing of any actual
or threatened withdrawal, suspension, cancellation or
modification of Vessel's SMC or of the Company's DOC,
where applicable;
(e) where applicable, promptly report to the Agent in
writing (i) any accident involving any Vessel which may
result in that Vessel's insurers making payment
directly to the Agent in accordance with the relevant
Security Documents or (ii) any "major nonconformity",
as that term is defined in the Guidelines on the
Implementation of the International Safety Management
Code by Administrations adopted by the Assembly of the
International Maritime Organisation pursuant to
Resolution A.788(19), and of the steps being taken to
remedy the situation; and
60
(f) not without the prior written consent of the Agent
(which will not be unreasonably withheld) change the
identity of the Company.
12.2.7 Guarantor's Public Listing Each of the Indemnifier and the
Guarantor shall ensure that throughout the Facility Period
the Guarantor shall remain a public listed company unless
with the prior written approval of the Banks it is owned by
significant and recognised corporate bodies with a corporate
rating of at least BBB as defined by Standard & Poor's or
similar rating from a rating agency acceptable to the Banks.
12.2.8 Insurances The Indemnifier shall ensure that each of the
Vessels is fully insured upon the terms and conditions set
forth in the Mortgages. In addition, each of the Indemnifier
and the Guarantor shall ensure that its property and assets
are insured against such risks and in such amounts as are
customary for companies engaged in similar businesses.
12.2.9 Classification The Indemnifier shall ensure that each Vessel
is classed and maintained with the highest applicable class
necessary to properly operate such Vessel of Lloyds Register
of Shipping, Det norske Veritas, the American Bureau of
Shipping or such other classification society acceptable to
the Agent and that such classification is not changed or
impaired in any way during the Facility Period.
12.2.10 Certificate of Compliance The Indemnifier and the Guarantor
shall deliver to the Agent a duly executed Certificate of
Compliance ninety (90) days after the end of each fiscal
quarter occurring during the Facility Period certifying
(inter alia) compliance with the covenants contained in
Clauses 12.2.18 and 12.3.
12.2.11 Inspection of records The Indemnifier and the Guarantor will
each permit the inspection of its financial records and
accounts from time to time during business hours by the
Agent or its nominee.
12.2.12 Notification of Event of Default Each of the Indemnifier and
the Guarantor will immediately notify the Agent in writing
of the occurrence of any Event of Default or Potential Event
of Default or any
61
event which will materially adversely affect the
Indemnifier's or the Guarantor's ability to perform its
obligations under this Agreement or the ability of any of
the other Security Parties or any Principal Subsidiary to
perform any of their obligations under any of the Security
Documents to which they are a party or may become a party
to.
12.2.13 Additional Filings/Notification Each of the Indemnifier and
the Guarantor shall ensure that (i) any and all additional
filings referred to in the proviso to Clause 4.5 will be
made and/or effected promptly and within any applicable time
limits imposed by law and (ii) the Agent is immediately
notified if any of the Security Parties (a) has an
established place of business in the United Kingdom or the
United States of America at any time during the Facility
Period or (b) changes the place of its Chief Executive
office or principal place of business in the United States
of America.
12.2.14 Pari Passu Each of the Indemnifier and the Guarantor shall
ensure that their respective obligations under this
Agreement shall at all times rank at least pari passu with
all of their other present and future unsecured and
unsubordinated indebtedness with the exception of any
obligations which are mandatorily preferred by any
applicable laws to companies generally and not by contract.
12.2.15 Corporate Existence Save as permitted by Clause 12.1.4, each
of the Indemnifier and the Guarantor shall ensure that
throughout the Facility Period each of the Security Parties
shall (i) remain duly formed and validly existing under the
laws of its respective jurisdiction of incorporation (ii)
remain authorised to do business in the jurisdiction in
which it transacts its business (iii) continue to have the
power to carry on its business as it is now being conducted
and to enter into and perform its obligations under the
Security Documents to which it is a party and (iv) continue
to comply with all statutory, regulatory and other
requirements relative to its business which could reasonably
be expected to have a material adverse effect on its
business, assets or operations, financial or otherwise.
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12.2.16 Admissibility In Evidence Each of the Indemnifiers and the
Guarantor shall on the request of the Agent obtain all
necessary authorisations, consents, approvals, licences,
exemptions, filings, registrations, recordings and
notarisations required or advisable in connection with the
admissibility in evidence of the Security Documents or any
of them in Proceedings in England or any other jurisdiction
in which Proceedings have been commenced.
12.2.17 Finance Company Status The Indemnifier will ensure that
throughout the Facility Period the Indemnifier will comply
with the regulations of the Netherlands Ministry of Finance
dated 1 July 2001 (Vrijstellingsregeling Wet Toezicht
Kredietwezen 1992) with respect to finance companies to the
extent applicable and that the application of the Facility
and the Guarantee Facility will be in accordance with such
regulations. The Indemnifier will also ensure that
throughout the Facility Period all notice requirements to
the Dutch Central Bank pursuant to the Foreign Financial
Relations Act ("Wet Financiele Betrekkingen Buitenland")
1994 (as the same may be amended from time to time), are
complied with.
12.2.18 Permitted Indebtedness The Indemnifier and the Guarantor
shall procure that throughout the Facility Period the SO
Group will have no indebtedness other than Permitted
Indebtedness, unless otherwise agreed by an Instructing
Group.
12.2.19 Short Term Permitted Indebtedness The Indemnifier and the
Guarantor shall procure that throughout the Facility Period
the Short Term Permitted Indebtedness shall not exceed
seventy five million Dollars ($75,000,000) in aggregate or
the equivalent in any other currency, unless otherwise
agreed by an Instructing Group.
12.2.20 Subordinated Debt The Indemnifier and the Guarantor shall
ensure that throughout the Facility Period any Subordinated
Debt shall be provided on the terms of the Subordinated
Note, unless otherwise agreed by an Instructing Group.
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12.2.21 Sale of Assets Unless otherwise agreed by an Instructing
Group, the sale of assets of the SO Group shall not at any
time during each fiscal year falling within the Facility
Period exceed seventy five million Dollars ($75,000,000) or
the equivalent in any other currency in aggregate.
Notwithstanding the foregoing, unless otherwise agreed by an
Instructing Group, the maximum cumulative aggregate amount
for the sale of assets of the SO Group during the Facility
Period shall not exceed one hundred and fifty million
Dollars ($150,000,000) or the equivalent in any other
currency. In this Clause the sale of assets includes
contributing assets to joint ventures. For the purposes of
(i) this Clause the value of any asset sold or disposed of
shall be deemed to be its market value whether or not such
asset was sold on "an arms length basis" and sales of assets
within the SO Group shall not be counted and (ii) the second
sentence of this Clause only the Facility Period shall be
deemed to commence on 3 January 2003.
12.2.22 Synthetic Leases Unless otherwise agreed by an Instructing
Group, throughout the Facility Period the Indemnifier and
the Guarantor shall ensure that the total aggregate amount
outstanding under any Synthetic Lease shall not exceed fifty
million Dollars ($50,000,000).
12.3 Guarantor's Financial Covenants
12.3.1 Unless otherwise agreed by an Instructing Group, from the
date of this Agreement until the Restructure Date the
Guarantor shall: -
(a) maintain a Consolidated Debt to Consolidated Tangible
Net Worth ratio of a maximum of 1.00:1.00 as calculated
at the end of each fiscal quarter;
(b) ensure that any inter-company debt due from SNSA or any
of its Subsidiaries (not including the SO Group) to the
SO Group does not at any one time exceed fifty million
Dollars ($50,000,000) in aggregate or its equivalent
amount in any other currency provided that, the
Guarantor shall procure that no inter-company debt
whatsoever shall be advanced to SNSA or any of its
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subsidiaries if an Event of Default or Potential Event
of Default has occurred and is continuing;
(c) ensure that SNSA's Liquidity Line (i) shall be fully
subordinated to the Facility throughout the Facility
Period upon terms and conditions acceptable to the
Banks in their sole discretion upon the occurrence of
an Event of Default; (ii) shall not exceed $50,000,000
in aggregate and (iii) shall not be repaid if an Event
of Default or Potential Event of Default has occurred
and is continuing or an Event of Default or Potential
Event of Default would occur as a result of such
repayment.
For the purposes of this Clause 12.3.1:-
(a) (i) Subordinated Debt in an amount of up to one
hundred and fifty million Dollars ($150,000,000)
or the equivalent in any other currency and (ii)
SNSA's Liquidity Line shall not be included as
Consolidated Debt in the calculation of (i)
Consolidated Debt to Consolidated Tangible Net
Worth and (ii) D/EBITDA, for covenant calculation
purposes but shall be included for the purposes of
calculating the applicable Margin and the
applicable Premium; and
(b) Subordinated Debt in an amount of fifty million
Dollars ($50,000,000) only or the equivalent in
any other currency shall be included as part of
Consolidated Tangible Net Worth for covenant
calculation purposes;
(d) Notwithstanding Clause 12.2.19, the Guarantor shall be
permitted to incur additional indebtedness ("Additional
Permitted Indebtedness") (i) in an amount of up to the
difference between four hundred and forty million
Dollars ($440,000,000) and the total available
commitments of the lenders under the Existing Loan
Agreement at such time and (ii) for acquisitions and/or
capital expenditure if on a pro forma basis D/EBITDA
does not exceed the ratios specified in clause 12.3.1
(c) of the
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Existing Loan Agreement and no Event of Default has
occurred and is continuing.
12.3.2 Unless otherwise agreed by the Banks from the Restructure
Date until the end of the Facility Period the Guarantor
shall comply with such revised and/or additional financial
covenants as shall be agreed between (inter alios) the Agent
and the Guarantor in relation to the Existing Loan
Agreement, subject to such changes thereto as the Banks may
require. If no such revised and/or amended financial
covenants are agreed in relation to the Existing Loan
Agreement on or before the Restructure Date the Guarantor
shall comply with such financial covenants as the Banks
shall require in relation to this Agreement. On or before
the Restructure Date each of the Borrower and the Guarantor
undertakes to enter into a supplemental agreement to this
Agreement in order formally to set out in writing the terms
of the revised and/or amended financial covenants so agreed.
Such supplemental agreement shall be in form and substance
satisfactory to the Banks in their discretion and shall be
accompanied by such legal opinions as the Banks may require.
12.3.3 The Guarantor agrees that for the six month period ending 31
August 2003 its cumulative net reported losses shall not
exceed seventy five million Dollars ($75,000,000). In
calculating such cumulative net losses, write downs taken on
non-financial assets, gains or losses on the sale of
non-financial assets and the additional costs of (i)
implementing changes to the financial covenants contained in
Clause 12.3 (ii) implementing changes to the financial
covenants contained in clauses 12.3 of each of the Existing
Loan Agreement and the Amended and Restated Loan Agreement
and the conversion thereunder of part of the facility into a
guarantee facility and (iii) the entry into of the this
Agreement (including, without limitation, the additional
fees, Premium and interest cost on Subordinated Debt) will
not be included.
12.3.4 The Guarantor covenants that the SO Group will not incur
discretionary capital expenditures in excess of four million
five hundred thousand Dollars ($4,500,000) for the remainder
of the fiscal year commencing 1 June 2003. For the purposes
of this Clause, discretionary capital
66
expenditures are those contemplated by the Guarantor as
being included within the $19,500,000 unused discretionary
capital expenditures in the Guarantor's forecast dated 31
March 2003.
12.3.5 Each of the Indemnifier and the Guarantor agrees that:-
(a) it will not repay any sums due and owing or any other
sums howsoever payable by it under or pursuant to
SNSA's Liquidity Line if an Event of Default has
occurred and is continuing or an Event of Default or
Potential Event of Default would occur as a result of
such repayment;
(b) immediately upon receiving monies under or pursuant to
SNSA's Liquidity Line it will execute a Promissory Note
in the form attached at Appendix E (the "Liquidity
Note") and deliver a certified copy of the same to the
Agent; and
(c) any funds received by it under or pursuant to SNSA's
Liquidity Line shall at all times throughout the
Facility Period be fully subordinated to the Facility
upon the terms set out in the Liquidity Note.
13 Earnings
13.1 Remittance of earnings Immediately upon the occurrence of an Event of
Default, the Indemnifier shall procure that all Earnings are paid to
such account(s) as the Agent shall from time to time specify by notice
in writing to the Indemnifier.
14 Events Of Default
14.1 The Agent's rights If any of the events set out in Clause 14.2 occurs,
and such event remains unremedied for fourteen (14) days after notice
thereof has been given by the Agent to the Indemnifier (except in
relation to any of the events described in Clauses 14.2.1, 14.2.2,
14.2.4, 14.2.5, 14.2.6, 14.2.12, 14.2.18 and 14.2.22 where such remedy
period shall not apply) the Agent may at its discretion by notice to
the Indemnifier declare the Banks and the Agent to be under no
further obligation to the Indemnifier under or pursuant to this
Agreement and may declare all or any part of the Indebtedness
(including such unpaid interest as shall
67
have accrued) to be immediately payable, whereupon the Indebtedness
(or the part of the Indebtedness referred to in the Agent's notice)
shall immediately become due and payable without any further demand or
notice of any kind.
14.2 Events of Default The events referred to in Clause 14.1 are:-
14.2.1 payment default if the Indemnifier defaults in the payment
of any part of the Indebtedness when due; or
14.2.2 other default if any of the Security Parties fails to
observe or perform any of the covenants, conditions,
undertakings, agreements or obligations on its part
contained in any of the Security Documents or shall in any
other way be in breach of or do or cause to be done any act
repudiating or evidencing an intention to repudiate any of
the Security Documents and such default (if in the
reasonable opinion of the Instructing Group capable of
remedy) is not remedied within fourteen (14) days after
notice of the default has been given to the Indemnifier; or
14.2.3 misrepresentation or breach of warranty if any
representation, warranty or statement made, deemed to be
made, or repeated under any of the Security Documents or in
any accounts, certificate, notice instrument, written
statement or opinion delivered by a Security Party under or
in connection with any Security Document is incorrect in any
material respect when made, deemed to be made or repeated;
or
14.2.4 execution if a distress or execution or other process of a
court or authority is levied on any of the property of any
of the Security Parties or any of the Principal Subsidiaries
before or after final judgment or by order of any competent
court or authority for an amount in excess of ten million
Dollars ($10,000,000) or, its equivalent in any other
currency and is not satisfied or stayed (with a view to
being contested in good faith) within fourteen days of levy;
or
14.2.5 insolvency events if any of the Security Parties or any of
the Principal Subsidiaries: -
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(a) resolves to appoint, or applies for, or consents to the
appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of
all or part of its assets other than for the purposes
of a merger or amalgamation pursuant to Clause 12.1.4;
or
(b) is unable or admits its inability to pay its debts as
they fall due; or
(c) makes a general assignment for the benefit of
creditors; or
(d) ceases trading or threatens to cease trading; or
(e) has appointed an Inspector under the Companies Xxx 0000
or any statutory provision which the Agent in its
discretion considers analogous thereto; or
14.2.6 insolvency proceedings if any proceedings are commenced or
threatened, or any order or judgment is given by any court,
for the bankruptcy, liquidation, winding up, administration
or re-organisation of any of the Security Parties or any of
the Principal Subsidiaries or for the appointment of a
receiver, administrative receiver, administrator, liquidator
or trustee of any of the Security Parties or any of the
Principal Subsidiaries or of all or part of the assets of
any of the Security Parties or any of the Principal
Subsidiaries, or if any person appoints or purports to
appoint such receiver, administrative receiver,
administrator, liquidator or trustee which proceeding is not
discharged within thirty (30) days of its commencement; or
14.2.7 impossibility or illegality unless covered by Clause 17.7,
if any event occurs which would, or would with the passage
of time, render performance of any of the Security Documents
impossible, unlawful or unenforceable by the Banks or the
Agent; or
14.2.8 conditions subsequent if any of the conditions set out in
Clauses 3.2 and 3.4 is not satisfied within the time
reasonably required by the Agent with respect to the
conditions referred to at Clauses 3.2.1 to 3.2.5 and 3.4.1
to 3.4.4 inclusive and within twelve (12) months with
respect to the conditions referred to at Clauses 3.2.6 and
3.4.5, except where such
69
condition has not been satisfied due to an act or omission
on the part of a Finance Party; or
14.2.9 revocation or modification of consents etc. if any material
consent, licence, approval or authorisation which is now or
which at any time during the Facility Period becomes
necessary to enable any of the Security Parties to comply
with any of their obligations in or pursuant to any of the
Security Documents is revoked, withdrawn or withheld, or
modified in a manner which the Agent reasonably considers
is, or may be, prejudicial to the interests of the Banks in
a material manner, or any material consent, licence,
approval or authorisation ceases to remain in full force
and effect; or
14.2.10 curtailment of business if the business of any of the
Security Parties is wholly or partially curtailed by any
intervention by or under authority of any government, or if
all or a substantial part of the undertaking, property or
assets of any of the Security Parties (other than a Vessel
if it is that Security Party's only asset) is seized,
nationalised, expropriated or compulsorily acquired by or
under authority of any government or any Security Party
disposes or threatens to dispose of a substantial part of
its business or assets; or
14.2.11 loss of Vessel if any Vessel, or any such other vessel which
may from time to time be mortgaged to the Banks (or to the
Agent on their behalf) as security for the repayment of all
or any part of the Indebtedness is destroyed, abandoned,
confiscated, forfeited, condemned as prize or otherwise
becomes a Total Loss, except that a Total Loss shall not be
an Event of Default if:-
(a) such Vessel or such other vessel (as the case may be)
is insured in accordance with the Security Documents;
and
(b) no insurer has refused to meet or has disputed the
claim for Total Loss and it is not apparent to the
Agent in its discretion that any such refusal or
dispute is likely to occur; and
70
(c) payment of all insurance proceeds in respect of the
Total Loss (as required by Clause 2.7) is made in full
to the Agent on behalf of the Banks in accordance with
Clause 2.7; or
14.2.12 acceleration of other indebtedness if any other indebtedness
or obligation for borrowed money of any of the Security
Parties or any Principal Subsidiary becomes due or capable
of being declared due prior to its stated maturity by reason
of default on the part of that Security Party or Principal
Subsidiary (as the case may be), or is not repaid or
satisfied on the due date for its repayment or any such
other loan, guarantee or indebtedness becomes enforceable
save, in either case, for amounts of less than five million
Dollars ($5,000,000) in aggregate, or its equivalent in any
other currency, and claims contested in good faith; or
14.2.13 reduction of capital if any of the Security Parties except
the Guarantor or SNSA reduces its authorised or issued or
subscribed capital except reductions effected in compliance
with Clause 12.1.4; or
14.2.14 challenge to registration if the registration of any Vessel
or any Mortgage becomes void or voidable or liable to
cancellation or termination; or
14.2.15 war if the country of registration of any Vessel becomes
involved in war (whether or not declared) or civil war or is
occupied by any other power and the Agent reasonably
considers that, as a result, the security conferred by the
Security Documents is materially prejudiced; or
14.2.16 notice of termination if the Guarantor, either of the
Shipowning Guarantors, any Qualifying Guarantor, SNSA or
SNTG gives notice to the Agent to determine its obligations
under the Guarantee, the Qualifying Guarantee, the
Shipowners' Guarantee or the SNSA Guarantee, as appropriate;
or
14.2.17 claim against the Guarantor's, SNSA's or SNTG's assets
except for Permitted Liens, if a maritime or other lien,
arrest distress or similar charge is levied upon or against
any Vessel or any substantial part of the
71
assets of the Guarantor or SNSA or SNTG (on a consolidated
basis) and such is not discharged within fourteen (14)
Business Days after any Security Party or Principal
Subsidiary (as the case may be) has become aware of the
same; or
14.2.18 Guarantor's, SNSA's or SNTG's business if all or a
substantial part of the Guarantors or SNSA's or SNTG's
business is destroyed, abandoned, seized, appropriated or
forfeited for any reason; or
14.2.19 ownership if(i) the Indemnifier ceases to be 100% directly
owned by Xxxxx Offshore A/S or 100% indirectly owned by the
Guarantor and (ii) either of the Shipowning Guarantors or
any Qualifying Guarantor ceases to be 100% directly or
indirectly owned by SNSA; or
14.2.20 final judgments if any of the Security Parties fails to
comply with any non appealable court order or fails to pay a
final unappealable judgment against it, in either case, in
excess of ten million Dollars ($10,000,000) which remains
unsettled for fourteen (14) days; or
14.2.21 third party charters if any Vessel which is on chatter to a
member of the SO Group is chartered for a period of twelve
(12) months or more to a person who is not a member of the
SNSA Group; or
14.2.22 cross default if there occurs any Event of Default (as that
expression is defined in each of the Existing Loan Agreement
and the Amended and Restated Loan Agreement) under the
Existing Loan Agreement and/or the Amended and Restated Loan
Agreement.
15 Set-Off and Lien
15.1 Set-off Each of the Indemnifier and the Guarantor irrevocably
authorises the Finance Parties at any time after all or any part of
the Indebtedness shall have become due and payable to set off without
notice any liability of the Indemnifier or the Guarantor (as the case
may be) to any of the Finance Parties (whether present or future,
actual or contingent, and irrespective of the branch or office,
currency or place of payment) against any credit balance from time to
time standing on any account of the Indemnifier or the Guarantor (as
the case may be) (whether current or otherwise and whether or not
subject to notice) with any
72
branch of any of the Finance Parties in or towards satisfaction of the
Indebtedness and, in the name of that Finance Xxxxx, the Indemnifier
or the Guarantor (as the case may be), to do all acts (including,
without limitation, converting or exchanging any currency) and execute
all documents which may be required to effect such application.
15.2 Lien If an Event of Default has occurred and is continuing, each
Finance Party shall have a lien on and be entitled to retain and
realise as additional security for the repayment of the Indebtedness
any cheques, drafts, bills, notes or negotiable or non-negotiable
instruments and any stocks, shares or marketable or other securities
and property of any kind of the Indemnifier or the Guarantor (or of
that Finance Party as agent or nominee of the Indemnifier or the
Guarantor) from time to time held by that Finance Party, whether for
safe custody or otherwise.
15.3 Restrictions on withdrawal Despite any term to the contrary in
relation to any deposit or credit balance at any time on any account
of the Indemnifier or the Guarantor (as the case may be) with any of
the Finance Parties, no such deposit or balance shall be repayable or
capable of being assigned, mortgaged, charged or otherwise disposed of
or dealt with by the Indemnifier or the Guarantor (as the case may be)
after an Event of Default has occurred and while such Event of Default
is continuing, but any Finance Party may from time to time permit the
withdrawal of all or any part of any such deposit or balance without
affecting the continued application of this Clause.
15.4 Application Whilst an Event of Default is continuing, each of the
Indemnifier and the Guarantor irrevocably authorises the Agent to
apply all sums which the Agent may receive:-
15.4.1 pursuant to a sale or other disposition of a Vessel or any
right, title or interest in a Vessel; or
15.4.2 by way of payment to the Agent of any sum in respect of the
Insurances, Earnings or Requisition Compensation of a
Vessel; or
15.4.3 otherwise arising under or in connection with any of the
Security Documents
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in or towards satisfaction, or by way of retention on
account, of the Indebtedness, in such manner as the Agent
may in its discretion determine.
16 Assignment and Sub-Participation
16.1 Right to assign Each of the Banks may assign or transfer all or any of
its rights under or pursuant to the Security Documents to any other
branch of that Bank or to any other bank or financial institution, and
may grant sub-participations in all or any part of its Guarantee
Commitment provided that (a) the Indemnifier and the Agent consent to
such assignment or transfer (such consent not to be unreasonably
withheld or delayed); and (b) such assignment or transfer does not
result in the Indemnifier being subject to any additional Tax or other
financial or legal obligations other than those contemplated by the
terms of this Agreement at the time of such assignment or transfer.
16.2 Indemnifier's co-operation Each of the Indemnifier and the Guarantor
will cooperate fully with the Banks in connection with any assignment,
transfer or sub-participation pursuant to Clause 16.1; will execute
and procure the execution of such documents as the Banks may require
in connection therewith; and irrevocably authorises each of the
Finance Parties to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Facility or the Security Documents which each
such Finance Party may in its discretion consider necessary or
desirable (subject to any duties of confidentiality applicable to the
Banks generally).
16.3 Rights of assignee Any assignee, transferee or sub-participant of a
Bank shall (unless limited by the express terms of the assignment,
transfer or sub-participation) take the full benefit of every
provision of the Security Documents benefiting that Bank.
16.4 Transfer Certificates If any Bank wishes to transfer all or any of its
Guarantee Commitment as contemplated in Clause 16.1 then such transfer
may be effected by the delivery to the Agent of a duly completed and
duly executed Transfer Certificate in which event, on the later of the
Transfer Date specified in such
74
Transfer Certificate and the fifth Business Day after the date of
delivery of such Transfer Certificate to the Agent:
16.4.1 to the extent that in such Transfer Certificate the Bank
which is a party thereto seeks to transfer its Guarantee
Commitment in whole, the Indemnifier and such Bank shall be
released from further obligations towards each other under
this Agreement and their respective rights against each
other shall be cancelled other than existing claims against
such Bank for breach of this Agreement (such rights,
benefits and obligations being referred to in this Clause
16.4 as "discharged rights and obligations");
16.4.2 the Indemnifier and the Transferee which is a party thereto
shall assume obligations towards one another and/or acquire
rights against one another which differ from such discharged
rights and obligations only insofar as the Indemnifier and
such Transferee have assumed and/or acquired the same in
place of the Indemnifier and such Bank; and
16.4.3 the Agent, the Transferee and the other Banks shall acquire
the same rights and benefits and assume the same obligations
between themselves as they would have acquired and assumed
had such Transferee been an original party to this Agreement
as a Bank with the rights, benefits and/or obligations
acquired or assumed by it as a result of such transfer.
16.5 Power of Attorney In order to give effect to each Transfer Certificate
the Finance Parties and the Indemnifier each hereby irrevocably and
unconditionally appoint the Agent as its true and lawful attorney with
full power to execute on their respective behalves each Transfer
Certificate delivered to the Agent pursuant to Clause 16.4 without the
Agent being under any obligation to take any further instructions from
or give any prior notice to, any of the Finance Parties or, subject to
the Indemnifier's rights under Clause 16.1, the Indemnifier before
doing so and the Agent shall so execute each such Transfer Certificate
on behalf of the other Finance Parties and the Indemnifier immediately
on its receipt of the same pursuant to Clause 16.4.
16.6 Notification The Agent shall promptly notify the other Finance
Parties, the Transferee and the Indemnifier on the execution by it of
any Transfer Certificate
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together with details of the amount transferred, the Transfer Date and
the parties to such transfer.
17 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
17.1 Payments All amounts payable by the Indemnifier and the Guarantor
under or pursuant to any of the Security Documents shall be paid to
such accounts at such banks as the Agent may from time to time direct
to the Indemnifier or the Guarantor (as the case may be), and (unless
payable in any other Currency of Account) shall be paid in Dollars in
same day funds (or such funds as are required by the authorities in
the United States of America for settlement of international payments
for immediate value). Payments shall be deemed to have been received
by the Agent on the date on which the Agent receives authenticated
advice of receipt, unless that advice is received by the Agent on a
day other than a Business Day or at a time of day (whether on a
Business Day or not) when the Agent in its reasonable discretion
considers that it is impossible or impracticable for the Agent to
utilise the amount received for value that same day, in which event
the payment in question shall be deemed to have been received by the
Agent on the Business Day next following the date of receipt of advice
by the Agent.
17.2 No deductions or withholdings All payments (whether of principal or
interest or otherwise) to be made by the Indemnifier and/or the
Guarantor pursuant to the Security Documents shall, subject only to
Clause 17.3, be made free and clear of and without deduction for or on
account of any Taxes or other deductions, withholdings, restrictions,
conditions or counterclaims of any nature, and neither the Indemnifier
nor the Guarantor will claim any equity in respect of any payment due
from it to the Banks or to the Agent under or in relation to any of
the Security Documents.
17.3 Grossing-up If at any time any law requires (or is interpreted to
require) the Indemnifier or the Guarantor to make any deduction or
withholding from any payment, or to change the rate or manner in which
any required deduction or withholding is made, the Indemnifier or the
Guarantor (as the case may be) will promptly notify the Agent and,
simultaneously with making that payment, will pay to the Agent
whatever additional amount (after taking into account any additional
Taxes on, or deductions or withholdings from, or restrictions or
conditions on, that additional amount) is necessary to ensure that,
after making the
76
deduction or withholding, the Agent and the Banks receive a net sum
equal to the sum which they would have received had no deduction or
withholding been made.
17.4 Evidence of deductions If at any time either the Indemnifier or the
Guarantor is required by law to make any deduction or withholding from
any payment to be made by it pursuant to any of the Security
Documents, the Indemnifier or the Guarantor (as the case may be) will
pay the amount required to be deducted or withheld to the relevant
authority within the time allowed under the applicable law and will,
no later than thirty days after making that payment, deliver to the
Agent an original receipt issued by the relevant authority, or other
evidence reasonably acceptable to the Banks, evidencing the payment to
that authority of all amounts required to be deducted or withheld. If
the Indemnifier makes any deduction or withholding from any payment
under or pursuant to any of the Security Documents, and a Bank
subsequently receives a refund or allowance from any tax authority
which that Bank identifies as being referable to that deduction or
withholding, that Bank shall, as soon as reasonably practicable, but
without substantially interfering with the businesses operations of
that Bank, pay to the Indemnifier an amount equal to the amount of the
refund or allowance received, if and to the extent that it may do so
without prejudicing its right to retain that refund or allowance and
without putting itself in any worse financial position than that in
which it would have been had the deduction or withholding not been
required to have been made. Nothing in this Clause shall be
interpreted as imposing any obligation on any Bank unless requested by
the Indemnifier to apply for any refund or allowance nor as
restricting in any way the manner in which any Bank organises its tax
affairs, nor as imposing on any Bank any obligation to disclose to the
Indemnifier any information regarding its tax affairs or tax
computations. All costs and expenses incurred by any Bank in obtaining
or seeking to obtain a refund or allowance from any tax authority
pursuant to this Clause shall be for the Indemnifier's account.
17.5 Adjustment of due dates If any payment to be made under any of the
Security Documents, shall be due on a day which is not a Business Day,
that payment shall be made on the next succeeding Business Day (unless
the next succeeding Business Day falls in the next calendar month in
which event the payment shall be made on the next preceding Business
Day). Any such variation of time shall be taken into account in
computing any interest in respect of that payment.
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17.6 Change in law If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any law,
or in compliance with any request or requirement from any central bank
or any fiscal, monetary or other authority:-
17.6.1 any Finance Party (or the holding company of any Finance
Party) shall be subject to any Tax with respect to payments
of all or any part of the Indebtedness or the Bank's
Obligations; or
17.6.2 the basis of Taxation of payments to any Finance Party in
respect of all or any part of the Indebtedness shall be
changed; or
17.6.3 any reserve requirements shall be imposed, modified or
deemed applicable against assets held by or deposits in or
for the account of or loans by any branch of any Finance
Party or its direct or indirect holding company; or
17.6.4 any ratio (whether cash, capital adequacy, liquidity or
otherwise) which any Finance Party or its direct or indirect
holding company is required or requested to maintain shall
be affected; or
17.6.5 there is imposed on any Finance Party (or on the direct or
indirect holding company of any Finance Party) any other
condition in relation to the Indebtedness or the Security
Documents;
and the result of any of the above shall be to increase the cost to
the Agent in undertaking or maintaining the Bank's Obligations, or to
cause any Finance Party to suffer (in its reasonable opinion) a
material reduction in the rate of return on its overall capital below
the level which it reasonably anticipated at the date of this
Agreement and which it would have been able to achieve but for its
entering into this Agreement and/or performing its obligations under
this Agreement, the Finance Party affected shall notify the Agent and,
on demand to the Indemnifier by the Agent, the Indemnifier shall from
time to time pay to the Agent for the account of the Agent the amount
which shall compensate that Finance Party or the Agent (or the
relevant holding company) for such additional cost or reduced return.
A certificate signed by an authorised signatory of the Agent or of the
Finance Party affected setting out the amount of that payment and the
basis of its
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calculation shall be submitted to the Indemnifier and shall be
conclusive evidence of such amount save for manifest error or on any
question of law.
17.7 Illegality and impracticality Notwithstanding anything contained in
the Security Documents, the obligations of the Agent to issue any Bank
Guarantee shall terminate in the event that a change in any law or in
the interpretation of any law by any authority charged with its
administration shall make it unlawful for that Bank to maintain its
Guarantee Commitment. In such event the Bank affected shall notify the
Agent and the Agent shall, by written notice to the Indemnifier,
declare the Banks' and/or the Agent's obligations (as the case may he)
to be immediately terminated.
18 Communications
18.1 Method Except for Communications pursuant to Clause 11, which shall
be made or given in accordance with Clause 11.20, any Communication
may be given, delivered, made or served (as the case may be) under or
in relation to this Agreement by letter or fax and shall be in the
English language and sent addressed:-
18.1.1 in the case of any of the Finance Parties to the Agent at
its address at the head of this Agreement (fax no: + 1 (212)
681-3900 marked for the attention of: Xxxxxx Xxxxx; and
18.1.2 in the case of the Indemnifier and/or the Guarantor to the
Communications Address with a copy to XxXxxxxxxx & Xxxxx,
LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, (fax no: + 1
(000) 000-0000) Attention: Xxxx X. Xxxxxxxxx, provided that
the failure to deliver such copy shall not affect the rights
of any party under this Agreement;
or to such other address or fax number as the Finance Parties, the
Indemnifier or the Guarantor may designate for themselves by written
notice to the others.
18.2 Timing A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by a party to this
Agreement:-
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18.2.1 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication
to have been transmitted to the correct fax number;
18.2.2 if delivered to an officer of the relevant party or (in the
case of the Indemnifier and/or the Guarantor) left at the
Communications Address at the time of delivery or leaving;
or
18.2.3 if posted, at 9.00 a.m. on the third Business Day after
posting by prepaid first class post.
Any Communication by fax shall be promptly confirmed in writing by
post or hand delivery.
19 General Indemnities
19.1 Currency In the event of any Finance Party receiving or recovering any
amount payable under any of the Security Documents in a currency other
than the Currency of Account, and if the amount received or recovered
is insufficient when converted into the Currency of Account at the
date of receipt to satisfy in full the amount due, the Indemnifier
and/or the Guarantor (as the case may be) shall, on the Agent's
written demand, pay to the Agent such further amount in the Currency
of Account as is sufficient to satisfy in full the amount due and that
further amount shall be due to the Agent on behalf of the Finance
Parties as a separate debt under this Agreement.
19.2 Costs and expenses Each of the Indemnifier and the Guarantor will,
within fourteen days of the Agent's written demand, reimburse the
Agent (on behalf of each of the Finance Parties) for all reasonable
out of pocket expenses including internal and external legal costs
(including Value Added Tax or any similar or replacement tax if
applicable) of and incidental to:-
19.2.1 the negotiation, syndication, preparation, execution and
registration of the Security Documents (whether or not any
of the Security Documents are actually executed or
registered and whether or not any Bank Guarantee is issued);
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19.2.2 any amendments, addenda or supplements to any of the
Security Documents (whether or not completed);
19.2.3 any other documents which may at any time be required by any
Finance Party to give effect to any of the Security
Documents or which any Finance Party is entitled to call for
or obtain pursuant to any of the Security Documents
(including, without limitation, all premiums and other sums
from time to time payable by the Agent in relation to the
Mortgagees' Insurances); and
19.2.4 the exercise of the rights, powers, discretions and remedies
of the Finance Parties under or pursuant to the Security
Documents.
19.3 Events of Default Each of the Indemnifier and the Guarantor shall
indemnify the Finance Parties from time to time on demand against all
losses and costs incurred or sustained by any Finance Party as a
consequence of any Event of Default, including (without limitation)
any Break Costs.
19.4 Protection and enforcement Each of the Indemnifier and the Guarantor
shall indemnify the Finance Parties from time to time on demand
against all losses, costs and liabilities which any Finance Party may
from time to time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on the
Finance Parties by the Security Documents or in or about the exercise
or purported exercise by the Finance Parties of any of the rights,
powers, discretions or remedies vested in them under or arising out of
the Security Documents, including (without limitation) any losses,
costs and liabilities which any Finance Party may from time to time
sustain, incur or become liable for by reason of any Finance Party
being mortgagees of any Vessel and/or a lender to the Indemnifier, or
by reason of any Finance Party being deemed by any court or authority
to be an operator or controller, or in any way concerned in the
operation or control, of any Vessel. No such indemnity will be given
to a Finance Party where any such loss, cost or liability has occurred
due to gross negligence or wilful misconduct on the part of that
Finance Party however this shall not affect the right of any other
Finance Party to receive any such indemnity.
19.5 Liabilities of Finance Parties Each of the Indemnifier and the
Guarantor will from time to time reimburse the Finance Parties on
demand for all sums which
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any Finance Party may pay on account of any of the Security Parties or
in connection with any Vessel (whether alone or jointly or jointly and
severally with any other person) including (without limitation) all
sums which any Finance Party may pay or guarantees which any Finance
Party may give in respect of the Insurances, any expenses incurred by
any Finance Party in connection with the maintenance or repair of any
Vessel or in discharging any lien, bond or other claim relating in any
way to any Vessel, and any sums which any Finance Party may pay or
guarantees which they may give to procure the release of any Vessel
from arrest or detention.
19.6 Taxes Each of the Indemnifier and the Guarantor shall pay all Taxes to
which all or any part of the Indebtedness or any of the Security
Documents may be at any time subject and shall indemnify the Finance
Parties on demand against all liabilities, costs, claims and expenses
resulting from any omission to pay or delay in paying any such Taxes.
The indemnity contained in this Clause shall survive the repayment of
the Indebtedness.
20 Miscellaneous
20.1 Waivers No failure or delay on the part of the any Finance Party in
exercising any right, power, discretion or remedy under or pursuant to
any of the Security Documents, nor any actual or alleged course of
dealing between any Finance Party and any of the Security Parties,
shall operate as a waiver of, or acquiescence in, any default on the
part of any Security Party, unless expressly agreed to do so in
writing by the Agent, nor shall any single or partial exercise by any
Finance Party of any right, power, discretion or remedy preclude any
other or further exercise of that right, power, discretion or remedy,
or the exercise by a Finance Party of any other right, power,
discretion or remedy.
20.2 No oral variations No variation or amendment of any of the Security
Documents shall be valid unless in writing and signed on behalf of the
Finance Parties and the relevant Security Party.
20.3 Severability If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not be
affected or impaired in any way.
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20.4 Successors etc. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees and
assignees, and shall inure to the benefit of the Finance Parties and
their respective successors, transferees and assignees. Neither the
Indemnifier nor the Guarantor may assign or transfer any of its rights
or duties under or pursuant to any of the Security Documents without
the prior written consent of the Banks.
20.5 Further assurance If any provision of the Security Documents shall be
invalid or unenforceable in whole or in part by reason of any present
or future law or any decision of any court, or if the documents at any
time held by the Finance Parties on their behalf are considered by the
Banks for any reason insufficient to carry out the terms of this
Agreement, then from time to time the Indemnifier and/or the Guarantor
(as the case may be) will promptly, on demand by the Agent, execute or
procure the execution of such further documents as in the reasonable
opinion of the Banks are necessary to provide adequate security for
the repayment of the Indebtedness.
20.6 Other arrangements The Finance Parties may, without prejudice to their
rights under or pursuant to the Security Documents, at any time and
from time to time, on such terms and conditions as they may in their
discretion determine, and without notice to either the Indemnifier or
the Guarantor, grant time or other indulgence to, or compound with,
any other person liable (actually or contingently) to the Finance
Parties or any of them in respect of all or any part of the
Indebtedness, and may release or renew negotiable instruments and take
and release securities and hold funds on realisation or suspense
account without affecting the liabilities of the Indemnifier and/or
the Guarantor (as the case may be) or the rights of the Finance
Parties under or pursuant to the Security Documents.
20.7 Advisers The Indemnifier and the Guarantor irrevocably authorise the
Agent, at any time and from time to time during the Facility Period,
to consult insurance advisers on any matters relating to the
Insurances, including, without limitation, the collection of insurance
claims, and from time to time to consult or retain advisers or
consultants to monitor or advise on any other claims relating to the
Vessels. The Indemnifier and the Guarantor will provide such advisers
and consultants with all information and documents which they may from
time to time
83
reasonably require and will reimburse the Agent on demand for all
reasonable costs and expenses incurred by the Agent in connection with
the consultation or retention of such advisers or consultants.
20.8 Delegation The Finance Parties may at any time and from time to time
delegate to any person any of their rights, powers, discretions and
remedies pursuant to the Security Documents, other than rights
relating to actions to be taken by an Instructing Group or the Banks
as a group on such terms as they may consider appropriate (including
the power to sub-delegate).
20.9 Rights etc. cumulative Every right, power, discretion and remedy
conferred on the Finance Parties under or pursuant to the Security
Documents shall be cumulative and in addition to every other right,
power, discretion or remedy to which they may at any time be entitled
by law or in equity. The Finance Parties may exercise each of their
rights, powers, discretions and remedies as often and in such order as
they deem appropriate subject to obtaining the prior written consent
of an Instructing Group. The exercise or the beginning of the exercise
of any right, power, discretion or remedy shall not be interpreted as
a waiver of the right to exercise any other right, power, discretion
or remedy either simultaneously or subsequently.
20.10 No enquiry The Finance Parties shall not be concerned to enquire into
the powers of the Security Parties or of any person purporting to act
on behalf of any of the Security Parties, even if any of the Security
Parties or any such person shall have acted in excess of their powers
or if their actions shall have been irregular, defective or informal,
whether or not any Finance Parties had notice thereof.
20.11 Continuing security The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall have
been repaid in full and none of the Finance Parties shall be under any
further actual or contingent liability to any third party in relation
to the Vessels, the Insurances, Earnings or Requisition Compensation
or any other matter referred to in the Security Documents.
20.12 Security cumulative The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Finance Parties or any of them for or in respect of
all or any part of the Indebtedness, and
84
shall not merge with or prejudice or be prejudiced by any such
security or any other contractual or legal rights of any of the
Finance Parties, nor affected by any irregularity, defect or
informality, or by any release, exchange or variation of any such
security. Section 93 of the Law of Property Xxx 0000 and all
provisions which the Agent considers analogous thereto under the law
of any other relevant jurisdiction shall not apply to the security
constituted by the Security Documents.
20.13 Re-instatement If any Finance Party takes any steps to exercise any
of its rights, powers, remedies or discretions pursuant to the
Security Documents and the result shall be adverse to the Finance
Parties, the Indemnifier, the Guarantor and the Finance Parties shall
be restored to their former positions as if no such steps had been
taken.
20.14 No liability None of the Finance Parties, nor any agent or employee
of any Finance Party, nor any receiver and/or manager appointed by the
Agent, shall be liable for any losses or any special, indirect,
consequential or punitive damages which may be incurred under or in
connection with the Security Documents or the transactions
contemplated thereunder, nor liable as mortgagee in possession for any
loss on realisation or for any neglect or default of any nature for
which a mortgagee in possession might otherwise be liable unless such
Finance Party's action constitutes gross negligence or wilful
misconduct. Each of the Indemnifier and the Guarantor waives, releases
and agrees (for itself and on behalf of its Subsidiaries) not to xxx
on any such claim for any such losses or damages whether or not
accrued and whether or not known or expected to exist in its favour,
except in the event that such party alleges gross negligence or wilful
misconduct
20.15 Rescission of payments etc. Any discharge, release or reassignment by
any of the Finance Parties of any of the security constituted by, or
any of the obligations of any Security Party contained in, any of the
Security Documents shall be (and be deemed always to have been) void
if any act (including, without limitation, any payment) as a result of
which such discharge, release or reassignment was given or made is
subsequently wholly or partially rescinded or avoided by operation of
any law, unless such Finance Party's action constitutes gross
negligence or wilful misconduct.
20.16 Subsequent Encumbrances If the Agent receives notice of any
subsequent Encumbrance (other than any Encumbrance permitted by the
terms of this
85
Agreement) affecting any Vessel, or all or any part of the Insurances,
Earnings or Requisition Compensation, the Agent may open a new account
in its books for the Indemnifier. If the Agent does not open a new
account, then (unless the Encumbrance is permitted by the terms of
this Agreement or the Agent gives written notice to the contrary to
the Indemnifier) as from the time of receipt by the Agent of notice of
such subsequent Encumbrance, all payments made to the Agent shall be
treated as having been credited to a new account of the Indemnifier
and not as having been applied in reduction of the Indebtedness.
20.17 Releases If any Finance Party shall at any time in its discretion
release any party from all or any part of any of the Security
Documents or from any term, covenant, clause, condition or obligation
contained in any of the Security Documents, the liability of any other
party to the Security Documents shall not be varied or diminished.
20.18 Certificates Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for manifest
error or on any question of law, be conclusive evidence as against the
Indemnifier or the Guarantor (as the case may be) of that amount.
20.19 The Bank's Obligations Neither the Agent nor any agent or employee of
the Agent shall be liable to the Indemnifier for any loss or damage
arising from any action taken or omitted in relation to the Bank's
Obligations, unless caused by its or their gross negligence or wilful
misconduct. In particular, but without limitation, neither the Agent
nor any agent or employee of the Agent shall be liable for any loss or
damage arising from any delay, loss, error, omission, variation or
mutilation in the transmission, translation, coding or decoding of all
or any part of the Bank's Obligations or any communication in
connection with the Bank's Obligations.
20.20 Survival of representations and warranties The representations and
warranties on the part of each of the Indemnifier and the Guarantor
contained in this Agreement shall survive the execution of this
Agreement and the advance of the facility or any part thereof.
86
20.21 Counterparts This Agreement may be executed in any number of
counterparts each of which shall be original but which shall together
constitute the same
20.22 Third Party Rights Notwithstanding the provisions of the Contracts
(Rights of Third Parties) Xxx 0000, no term of this Agreement is
enforceable by a person who is not a party to it.
21 Law and Jurisdiction
21.1 Governing law This Agreement shall in all respects be governed by and
interpreted in accordance with English law.
21.2 Jurisdiction For the exclusive benefit of the Finance Parties, the
parties to this Agreement irrevocably agree that the courts of England
are to have jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement and that any Proceedings may be
brought in those courts. Each of the Indemnifier and the Guarantor
irrevocably waives any objection which it may now or in the future
have to the laying of the venue of any Proceedings in any court
referred to in this Clause, and any claim that those Proceedings have
been brought in an inconvenient or inappropriate forum.
21.3 Alternative jurisdictions Nothing contained in this Clause shall limit
the right of the Finance Parties to commence any Proceedings against
either the Indemnifier or the Guarantor in any other court of
competent jurisdiction nor shall the commencement of any Proceedings
against either the Indemnifier or the Guarantor in one or more
jurisdictions preclude the commencement of any Proceedings in any
other jurisdiction, whether concurrently or not.
21.4 Service of process Without prejudice to the right of the Finance
Parties to use any other method of service permitted by law, each of
the Indemnifier and the Guarantor irrevocably agrees that any writ,
notice, judgment or other legal process shall be sufficiently served
on it if addressed to it and left at or sent by post to the Address
for Service, and in that event shall be conclusively deemed to have
been served at the time of leaving or, if posted, at 9.00 a.m. on the
third Business Day after posting by prepaid first class registered
post.
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
87
SIGNED by )
duly authorised for and on behalf )
of CITIBANK NA. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly anthorised for and on behalf )
of DEN NORSKE BANK ASA )
(as a Bank) )
in the presence of: - )
SIGNED by )
duly authorised for and on behalf )
of HSBC BANK PLC )
(as a Bank) )
in the presence of: )
SIGNED by )
duly authorised for and on behalf )
of NORDEA )
BANK NORGE ASA, Grand Cayman Branch) )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DEN NORSKE BANK ASA )
(as the Agent and Security Trustee) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of XXXXX COMEX )
SEAWAY FINANCE B.V. )
in the presence of:- )
SIGNED by )
duly authoriscd for and on behalf )
of XXXXX OFFSHORE S.A. )
in the presence of:- )
