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EXHIBIT 10.23
Dated 11 June, 1997
GULF OFFSHORE N.S. LIMITED
as Borrower
-and-
XXXXXXXXXX BANK OG KREDITKASSE ASA
as Lender and Security Trustee
-------------------------
LOAN AGREEMENT
-------------------------
relating to
a L.27,565,000 Revolving Term Loan Facility
XXXXXX, XXXXXX & XXXXXXXX
London
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INDEX
CLAUSE PAGE
1 INTERPRETATION 4
2 FACILITY 7
3 DRAWDOWN 7
4 INTEREST 7
5 INTEREST PERIODS 8
6 DEFAULT INTEREST 8
7 REPAYMENT AND PREPAYMENT 9
8 CONDITIONS PRECEDENT 10
9 REPRESENTATIONS AND WARRANTIES 11
10 GENERAL UNDERTAKINGS 12
11 CORPORATE UNDERTAKINGS 15
12 SECURITY COVER 16
13 PAYMENTS AND CALCULATIONS 17
14 APPLICATION OF RECEIPTS 18
15 APPLICATION OF EARNINGS 18
16 EVENTS OF DEFAULT 18
17 FEES AND EXPENSES 22
18 INDEMNITIES 23
19 NO SET-OFF OR TAX DEDUCTION 24
20 ILLEGALITY, ETC 25
21 INCREASED COSTS 25
22 CHANGES IN CIRCUMSTANCES 26
23 SET-OFF 27
24 TRANSFERS AND CHANGES IN LENDING OFFICES 27
25 VARIATIONS AND WAIVERS 29
26 NOTICES 30
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27 THE SECURITY TRUSTEE 31
28 SUPPLEMENTAL 34
29 LAW AND JURISDICTION 34
EXECUTION
SCHEDULE 1 DRAWDOWN NOTICE
SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS
SCHEDULE 3 TRANSFER CERTIFICATE
SCHEDULE 4 COMPLIANCE CERTIFICATE
APPENDIX A FORM OF MORTGAGE
APPENDIX B FORM OF DEED OF COVENANT
APPENDIX C FORM OF ACCOUNT SECURITY DEED
APPENDIX D FORM OF GUARANTEE
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LOAN AGREEMENT made on the 11th day of June, 1997
BETWEEN :
(1) GULF OFFSHORE N.S. LIMITED, a company incorporated in England with
company number 2541716, whose registered office is at 00 Xxxxxxxxx
Xxxx, Xxxxxx XX00 0XX, Xxxxxxx (xxx "Borrower");
(2) CHRISTIANIA BANK OG KREDITKASSE ASA, acting through its office at
Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx, as Lender; and
(3) CHRISTIANIA BANK OG KREDITKASSE ASA acting through its office at
Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx, as Security Trustee.
WHEREAS the Lender has agreed to make available to the Borrower a facility of
L.27,565,000 to refinance certain existing indebtedness of the Borrower and to
provide post-delivery finance for the acquisition of a platform supply vessel
presently under construction for the Borrower by Brattvag Skipsverft AS and
known during construction as Yard No. 68.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 Subject to Clause 1.7, in this Agreement:
"Account Security Deed" means a deed creating security in respect of
the Earnings Account in the form set out in Appendix C;
"Advance" means the amount of each borrowing by the Borrower under
this Agreement;
"Approved Manager" means any company which the Lender may approve
from time to time as the manager of the Ships (or any of them);
"Assigned Value" means, in relation to each Ship, 60 per cent. of
the value in Sterling set out against its name below, such values
being reduced by eight per cent. (8%) on each anniversary of the
first Drawdown Date (except that, in relation to the Newbuilding, the
first such reduction shall only occur on the second anniversary of
the first Drawdown Date):
Newbuilding L.10,840,000
Highland Pride L.10,645,000
Highland Star L.10,645,000
Highland Piper L. 9,000,000
Highland Legend L. 3,550,000
Highland Warrior L. 5,241,000
"Availability Period" means the period commencing on the date of
this Agreement and ending on (a) in relation to the first Advance,
30th June 1997 (or such later date as the Lender may agree with the
Borrower), or (b) in relation to the second Advance, 30th June, 1998
(or such later date as the Lender may agree with the Borrower) or (c)
if earlier, the date on which the Lender's obligation to make the
Loan is cancelled or terminated;
"Building Contract" means the contract dated 1st November, 1996 (as
subsequently supplemented and amended) entered into between the
Borrower and Brattvag Skipsverft AS pursuant to which Brattvag
Skipsverft AS agreed to build and sell, and the Borrower agreed to
purchase, the Newbuilding;
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"Business Day" means a day on which banks are open in Oslo and
London;
"Deed of Covenant" means, in relation to Ship, a deed of covenant
collateral to the Mortgage on Ship and creating charges over that
Ship, her Insurances, her Earnings and any requisition compensation
in the form set out in Appendix B (and, in the plural, means all of
them);
"Drawdown Date" means, in relation to each Advance, the date
requested by the Borrower for that Advance to be made, or (as the
context requires) the date on which that Advance is actually made;
"Drawdown Notice" means a notice in the form set out in Schedule 1
(or in any other form which the Lender approves or reasonably
requires);
"Earnings" means, in relation to each Ship, all moneys whatsoever
which are now, or later become payable (actually or contingently) to
the Borrower and which arise out of the use or operation of that
Ship, including (but not limited to) (a) all freight, hire and
passage moneys, compensation payable to the Borrower in the event of
requisition of that Ship for hire, remuneration for salvage and
towage services, demurrage and detention moneys and damages for
breach (or payments for variation or termination) of any charterparty
or other contract for the employment of that Ship, (b) all moneys
which are at any time payable under Insurances in respect of loss of
earnings, and (c) if and whenever that Ship is employed on terms
whereby any moneys falling within (a) or (b) are pooled or shared
with any other person, that proportion of the net receipts of the
relevant pooling or sharing arrangement which is attributable to that
Ship;
"Earnings Account" means an account in the name of the Borrower with
the Lender in London with account number 00000000, or any other
account (with that or another office of the Lender or with a bank or
financial institution other than the Lender) which is designated by
the Lender as the Earnings Account for the purposes of this
Agreement;
"Event of Default" means any of the events or circumstances
described in Clause 16.1;
"Finance Documents" means (a) this Agreement, the Guarantee, the
Deeds of Covenant, the Mortgages and the Account Security Deed and
(b) any other document (whether creating a Security Interest or not)
which is executed at any time by the Borrower or any other person as
security for, or to establish any form of subordination or priorities
arrangement in relation to, any amount payable to the Lender under
this Agreement or any of the documents referred to in this
definition;
"Financial Indebtedness" means, in relation to a person (the
"debtor"), a liability of the debtor (a) for principal, interest or
any other sum payable in respect of any moneys borrowed or raised by
the debtor, (b) under any loan stock, bond, note or other security
issued by the debtor, (c) under any acceptance credit, guarantee or
letter of credit facility made available to the debtor, (d) under a
financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or
raising of money by the debtor, (e) under any interest or currency
swap or any other kind of derivative transaction entered into by the
debtor, or (f) under a guarantee, indemnity or similar obligation
entered into by the debtor in respect of a liability of another
person which would fall within (a) to (e) if the references to the
debtor referred to the other person;
"GNS" means GulfMark North Sea Limited, a company incorporated in
England with company number 2625893, whose registered office is at 00
Xxxxxxxxx Xxxx, Xxxxxx XX00 0XX, Xxxxxxx;
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"GOMI" means Gulf Offshore Marine International Inc., a company
incorporated in Panama, whose registered office is at Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx;
"Guarantee" means a guarantee in the form set out in Appendix D;
"Guarantors" means, together, GNS and GOMI (and, in the singular,
means either of them);
"Highland Legend" means the platform supply vessel named "Highland
Legend" registered in the name of the Borrower under British flag
with official number 709907;
"Highland Piper" means the platform supply vessel named "Highland
Piper" registered in the name of the Borrower under British flag with
Official Number 728724;
"Highland Pride" means the platform supply vessel named "Highland
Pride" registered in the name of the Borrower under British flag with
official number 722013;
"Highland Star" means the platform supply vessel named "Highland
Star" registered in the name of the Borrower under British flag with
official number 719032;
"Highland Warrior" means the platform supply vessel named "Highland
Warrior" registered in the name of the Borrower under British flag at
the Port of Xxxxxxxx, Bermuda with Official Number 716310;
"Insurances" means, in relation to each Ship, (a) all policies and
contracts of insurance, including entries of that Ship in any
protection and indemnity or war risks association, which are effected
in respect of that Ship, her Earnings or otherwise in relation to
her, and (b) all rights and other assets relating to, or derived
from, any of the foregoing, including any rights to a return of a
premium;
"Interest Period" means a period determined in accordance with
Clause 5;
"Latest Accounts" means, in relation to the Borrower, the latest
audited annual or unaudited quarterly accounts delivered to the
Lender under Clause 10.6 or, in relation to a Guarantor, under Clause
4.1 of the Guarantee;
"Lender" means, subject to Clause 24.6, (a) Christiania Bank og
Kreditkasse ASA, acting through its branch at Xxxxxxxxxxxxxxx 00,
0000 Xxxx, Xxxxxx (or through another branch notified to the Lender
under Clause 24.4) and (b) the holder for the time being of a
Transfer Certificate;
"Liquid Assets" means:
(i) cash in hand;
(ii) deposits in prime banks or other financial institutions with
a maturity of 6 months or less;
(iii) government issued bills and bonds; and
(iv) marketable securities quoted on a recognised stock exchange,
but excluding any of those assets (other than monies standing to the
credit of the Earnings Account) subject to any Security Interest;
"Loan" means the principal amount for the time being outstanding
under this Agreement;
"Margin" means one per cent. (1%) per annum, Provided that if the
Value Adjusted Equity exceeds fifty per cent. (50%) and no Event of
Default or Potential Event of Default has occurred, the Margin shall
be reduced to seven eighths of one per cent. (7/8%) per
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annum from the next Interest Period commencing after the Lender has
received a quarterly compliance certificate in the form set out in
Schedule 4 showing that the Value Adjusted Equity exceeds 50%;
"Mortgage" means, in relation to each Ship, the first priority
account current ship mortgage on that Ship in the form set out in
Appendix A (and, in the plural, means all of them);
"net working capital" means, in relation to the Borrower and each
Guarantor and at any time, its current assets less its current
liabilities as shown in its Latest Accounts;
"Newbuilding" means, with effect from delivery to and acceptance by
the Borrower under the Building Contract, the platform supply vessel
presently under construction for the Borrower by Brattvag Skipsverft
AS and known during construction as Yard No. 68;
"Pertinent Jurisdiction", in relation to a company, means (a) England
and Wales, (b) the country under the laws of which the company is
incorporated or formed, (c) a country in which the company's central
management and control is or has recently been exercised, (d) a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax, (e) a country in
which assets of the company (other than securities issued by, or
loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in
which a Security Interest created by the company must or should be
registered in order to ensure its validity or priority, and (f) a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which
would have such jurisdiction if their assistance were requested by
the courts of a country referred to in (b) or (c);
"Potential Event of Default" means an event or circumstance which,
with the giving of any notice, the lapse of time, a determination of
the Lender and/or the satisfaction of any other condition, would
constitute an Event of Default;
"Pounds", "L." and "Sterling" means the lawful currency for the time
being of the United Kingdom;
"Repayment Date" means a date on which a repayment is required to be
made under Clause 7;
"Security Interest" means (a) a mortgage, charge (whether fixed or
floating) or pledge, any maritime or other lien or any other security
interest of any kind, (b) the rights of the plaintiff under an action
in rem in which the vessel concerned has been arrested or a writ has
been issued or similar step taken, and (c) any arrangement entered
into by a person (A) the effect of which is to place another person
(B) in a position which is similar, in economic terms, to the
position in which B would have been had he held a security interest
over an asset of A; but (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of business
of a bank or financial institution;
"Security Party" means each Guarantor and any other person (except
the Lender) who, as a surety or mortgagor, as a party to any
subordination or priorities arrangement, or in any similar capacity,
executes a document falling within paragraph (b) of the definition of
"Finance Documents";
"Security Period" means the period commencing on the date of this
Agreement and ending on the date on which all amounts payable by the
Borrower or any Security Party under the Finance Documents have been
paid;
"Security Trustee" means Christiania Bank og Kreditkasse ASA, acting
through its branch at Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx;
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"Ships" means, together, Highland Legend, Highland Star, Highland
Pride, Highland Piper, Highland Warrior, and from delivery to, and
acceptance by, the Borrower under the Building Contract, the
Newbuilding (and, in the singular, means each of them);
"Total Liabilities" means, at any time, the total liabilities of the
Borrower as shown in its Latest Accounts;
"Total Loss" and "Total Loss Date" have, in relation to each Ship,
the meaning given in the Deed of Covenant relating to that Ship;
"Transfer Certificate" has the meaning given in Clause 24;
"Value Adjusted Equity" means Value Adjusted Total Assets less Total
Liabilities (excluding any Financial Indebtedness which by its terms
is subordinated to the Loan); and
"Value Adjusted Total Assets" means, at any time, the total assets
of the Borrower as shown in its Latest Accounts after deducting (i)
goodwill and (ii) the values of the ships used in the preparation of
its Latest Accounts and substituting, in the case of the Ships, the
most recent market values shown by valuations complying with the
requirements of Clause 12.4 and, in the case of any other ships, the
most recent market values shown by valuations prepared on a similar
basis (and if no such valuations have been made, the Lender shall be
entitled to require that valuations shall be made on such similar
basis).
1.1 In this Agreement:
"asset" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or
other payment;
"company" includes any partnership, joint venture and unincorporated
association;
"contingent liability" means a liability which is not certain to
arise and/or the amount of which remains unascertained;
"document" includes a deed; also a letter, fax or telex;
"expense" means any kind of cost, charge or expense (including all
legal costs, charges and expenses) and any applicable value added or
other tax;
"law" includes any form of delegated legislation, any order or
decree, any treaty or international convention and any regulation,
directive or decision of the Council of the European Union or the
European Commission;
"legal or administrative action" means any legal proceeding or
arbitration and any administrative or regulatory action or
investigation;
"liability" includes every kind of debt or liability (present or
future, certain or contingent), whether incurred as principal or
surety or otherwise;
"months" shall be construed in accordance with Clause 1.3;
"official consent" and "official requirement" mean respectively:
(a) any consent, authorisation or clearance; and
(b) any requirement, directive, request, guideline or notice
(whether general or specific and whether or not having the
force of law);
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of or issued by any fiscal, monetary or banking authority or any
other governmental, official or public authority of any kind,
including the Council of the European Union or the European
Commission; and "official requirement" also includes a resolution of
the United Nations or of its Security Council;
"parent company" has the meaning given in Clause 1.4;
"person" includes any company; any state, political sub-division of
a state and local or municipal authority; and any international
organisation;
"subsidiary" has the meaning given in Clause 1.4; and
"tax" includes any present or future tax, duty, impost, levy or
charge of any kind which is imposed by any state, any political
sub-division of a state or any local or municipal authority
(including any such imposed in connection with exchange controls),
and any connected penalty, interest or fine.
1.2 A period of one or more "months" ends on the day in the relevant
calendar month numerically corresponding to the day of the calendar
month on which the period started ("the numerically corresponding
day"), but:
(a) on the Business Day following the numerically corresponding
day if the numerically corresponding day is not a Business Day
or, if there is no later Business Day in the same calendar
month, on the Business Day preceding the numerically
corresponding day; or
(b) on the last Business Day in the relevant calendar month, if
the period started on the last Business Day in a calendar
month or if the last calendar month of the period has no
numerically corresponding day;
and "month" and "monthly" shall be construed accordingly.
1.3 A company (S) is a subsidiary of another company (P) if:
(a) a majority of the issued shares in S (or a majority of the
issued shares in S which carry unlimited rights to capital and
income distributions) are directly owned by P or are
indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the
voting rights attaching to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a
majority of the directors of S; or
(d) P otherwise has the direct or indirect power to ensure that
the affairs of S are conducted in accordance with the wishes
of P;
and any company of which S is a subsidiary is a parent company of S.
1.4 In this Agreement:
(a) references to, or to a provision of, a Finance Document
or any other document are references to it as amended or
supplemented, whether before the date of this Agreement or
otherwise; and
(b) references to, or to a provision of, any law include
any amendment, extension, re-enactment or replacement, whether
made before the date of this Agreement or otherwise.
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1.5 Clauses 1.1 to 1.5 apply unless the contrary intention appears.
1.6 References in Clause 1.1 to a document being in the form of a
particular Appendix include references to that form with any modifications to
that form which the Lender approves or reasonably requires.
1.7 The clause headings shall not affect the interpretation of this
Agreement.
2 FACILITY
2.1 Subject to the other provisions of this Agreement, the Lender shall
make a loan facility not exceeding L.27,565,000 available to the Borrower.
2.2 The Borrower undertakes with the Lender to use the Loan only for the
purposes stated in the preamble to this Agreement.
3 DRAWDOWN
3.1 Subject to the following conditions, the Borrower may request an
Advance to be made by ensuring that the Lender receives a completed Drawdown
Notice not later than 11.00 a.m. (Oslo time) 3 Business Days prior to the
intended Drawdown Date for that Advance.
3.2 Those conditions are that:
(a) Subject to the provisions of Clause 7.12, there shall only
be two Advances, the first of L.18,565,000 and the second
of L.9,000,000; and
(b) the Drawdown Date for an Advance has to be a Business Day
during the applicable Availability Period.
3.3 A Drawdown Notice must be signed by a director of the Borrower; and,
once served, a Drawdown Notice cannot be revoked without the prior consent of
the Lender.
3.4 Subject to the provisions of this Agreement, the Lender shall on the
Drawdown Date for an Advance make available to the Borrower the proceeds of
that Advance as the Borrower shall direct in the Drawdown Notice for that
Advance.
4 INTEREST
4.1 Subject to the provisions of this Agreement, interest on
an Advance in respect of an Interest Period applicable to it shall be paid by
the Borrower on the last day of that Interest Period.
4.2 Subject to the provisions of this Agreement, the rate of interest on
an Advance in respect of an applicable Interest Period shall be the aggregate
of the Margin and LIBOR for that Interest Period.
4.3 LIBOR for an Interest Period is the rate per annum determined by the
Lender to be the rate of the offered quotation for deposits in Sterling which
appears on the Xxxxxx Monitor Money Rates Service page designated FRBD (or such
other page on that service as may replace that page) at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period for a period equal to that Interest Period.
4.4 However, in the case of an Interest Period longer than 6 months,
accrued interest shall be paid every 6 months during the Interest Period and on
the last day of the Interest Period.
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5 INTEREST PERIODS
5.1 The first Interest Period applicable to an Advance shall commence on
the Drawdown Date for that Advance and each subsequent Interest Period
applicable to that Advance shall commence on the expiry of the preceding
Interest Period applicable to that Advance.
5.2 Subject to Clauses 5.3 and 5.4, each Interest Period shall be:
(a) 1, 3 or 6 months as notified by the Borrower to the Lender
not later than 11.00 a.m. (London time) 3 Business Days before
the commencement of the Interest Period; or
(b) 3 months, if the Borrower fails to notify the Lender by the
time specified in paragraph (a) above; or
(c) such other period as the Lender may agree with the Borrower.
5.3 However,
(a) unless the Lender notifies the Borrower to the contrary, the
first Interest Period applicable to the second Advance and any
Advance made pursuant to Clause 7.12 shall end on the last day
of the Interest Period then current in respect of the first
Advance, whereupon both Advances shall be consolidated and
treated as a single Advance;
(b) in respect of an amount due to be repaid under Clause 7 on
a particular Repayment Date, an Interest Period shall end on
that Repayment Date; and
(c) the Borrower shall not select Interest Periods of 1 month
more often than 3 times in each period of 12 months from the
first Drawdown Date.
5.4 If, after the Borrower has selected an Interest Period longer than
6 months, the Lender notifies the Borrower by 11.00 a.m. (London time) on the
second Business Day before the commencement of the Interest Period that it is
not satisfied that deposits in Sterling for a period equal to the Interest
Period will be available to it in the London Interbank Market when the Interest
Period commences, the Interest Period shall be of 6 months.
6 DEFAULT INTEREST
6.1 The Borrower shall pay interest in accordance with the following
provisions on any amount payable by the Borrower under any Finance
Document which the Lender or the Security Trustee does not receive on or before
the relevant date, that is:
(a) the date on which the Finance Documents provide that such
amount is due for payment; or
(b) if a Finance Document provides that such amount is payable
on demand, the date on which the demand is served; or
(c) if such amount has become immediately due and payable under
Clause 16.4, the date on which it became immediately due and
payable.
6.2 Interest shall accrue on an overdue amount from (and including) the
relevant date until the date of actual payment (as well after as before
judgment) at the rate per annum determined by the Lender to be 2 per cent.
above:
(a) in the case of an overdue amount of principal, the higher
of the rates set out at paragraphs (a) and (b) of Clause 6.3;
or
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(b) in the case of any other overdue amount, the rate set out at
paragraph (b) of Clause 6.3.
6.3 Those rates are:
(a) the rate applicable to the overdue principal amount
immediately prior to the relevant date (but only for any
unexpired part of any then current Interest Period);
(b) the Margin plus, in respect of successive periods of any
duration (including at call) up to three months which the
Lender may select from time to time:
(i) LIBOR, as determined by the Lender in accordance
with Clause 4.3; or
(ii) if the Lender determines that Sterling deposits for
any such period are not being made available to it by
leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time
determined by the Lender by reference to the cost of
funds to it from such other sources as the Lender may
from time to time determine.
6.4 The Lender shall promptly notify the Borrower of each interest rate
determined by it under Clause 6.3 and of each period selected by it for the
purposes of paragraph (b) of that Clause; but this shall not be taken to imply
that the Borrower is liable to pay such interest only with effect from the date
of the Lender's notification.
6.5 Subject to the other provisions of this Agreement, any interest due
under this Clause shall be paid on the last day of the period by
reference to which it was determined.
6.6 Any such interest which is not paid at the end of the period by
reference to which it was determined shall thereupon be compounded.
7 REPAYMENT AND PREPAYMENT
7.1 Subject to Clauses 7.2 and 7.10 below, the Borrower shall repay the
Loan by 24 consecutive three-monthly instalments, the first 4 of five hundred
and seventy thousand Pounds (L.570,000) each, the next 19 of seven hundred and
seventy thousand Pounds (L.770,000) each and the final instalment of ten million
six hundred and fifty five thousand Pounds (L.10,655,000). Instalments falling
due shall be payable whether or not the second Advance has been made on any
Repayment Date.
7.2 If the second Advance is not made for any reason, each of the first
23 instalments specified in Clause 7.1 shall be five hundred and seventy
thousand Pounds (L.570,000) and the final instalment shall be five million four
hundred and fifty five thousand Pounds (L.5,455,000).
7.3 The first instalment shall be repaid on the date falling 3 months
after the first Drawdown Date and the last instalment on the date falling 72
months after the first Drawdown Date.
7.4 On the final Repayment Date, the Borrower shall additionally pay to
the Lender all other sums then accrued or owing under any Finance Document.
7.5 Subject to the following conditions, the Borrower may prepay the
whole or any part of the Loan on the last day of an Interest Period.
7.6 Those conditions are:
(a) that a partial prepayment shall be L.500,000 or a multiple
thereof;
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(b) that the Lender has received from the Borrower at least 20
days prior written notice specifying the amount to be prepaid
and the date on which the prepayment is to be made;
(c) that the Borrower has provided evidence satisfactory to the
Lender that any official consent required by the Borrower or
any Security Party in connection with the prepayment has been
obtained and remains in force, and that any official
requirement relevant to this Agreement which affects the
Borrower or any Security Party has been complied with.
7.7 A prepayment notice may not be withdrawn or amended without the
consent of the Lender.
7.8 If a Ship is sold or becomes a Total Loss, the Borrower shall prepay
a portion of the Loan equal to the then prevailing Assigned Value of that Ship.
Such prepayment shall be made simultaneously with the sale of that Ship (and as
a condition of the release of the Mortgage on that Ship) or within 120 days
after the Total Loss Date.
7.9 A prepayment shall be made together with accrued interest (and any
other amount payable under Clause 18 below or otherwise) in respect of the
amount prepaid and, if the prepayment is not made on the last day of an Interest
Period together with any sums payable under Clause 18.1(b) but without premium
or penalty.
7.10 Each partial prepayment shall be applied against the repayment
instalments specified in Clause 7.1 in inverse order of maturity.
7.11 Except as provided in Clause 7.12, no amount prepaid under any
provisions of this Agreement may be re-borrowed.
7.12 Subject to the following conditions, the Borrower may prepay the
whole or any part of the Loan on the last day of an Interest Period in a minimum
amount of L.2,500,000, and re-borrow any amount so prepaid.
Those conditions are:
(a) that the Lender has received from the Borrower at least 20
days prior written notice specifying the amount to be prepaid
and the date on which the prepayment is to be made, and that
amount is available for re-borrowing;
(b) that the provisions of Clauses 3.1, 3.3 and 3.4 shall apply
to any re-borrowing; and
(c) no re-borrowing of any amount prepaid pursuant to this Clause
7.12 can be made if and to the extent that it would result in
the amount of the Loan exceeding the amount which the Loan
should then be pursuant to the other provisions of this
Agreement; and
(d) no re-borrowing of any amount prepaid pursuant to this Clause
7.12 can be made if an Event of Default or a Potential Event
of Default has occurred and is continuing.
8 CONDITIONS PRECEDENT
8.1 The Lender's obligation to make each Advance is subject to the
following conditions precedent:
(a) that the Lender receives the documents described in Schedule
2 below in form and substance satisfactory to it and its
lawyers on or before the service of the Drawdown Notice for
the Advance or, in the case of paragraph 9 of Part I and
paragraph 3 of Part II, on or before the Drawdown Date for the
Advance;
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(b) that, on or before the first Drawdown Date, the Lender
receives the arrangement fee and the trustee fee referred to
in Clause 17.1;
(c) that on or before each Drawdown Date, the Lender receives all
accrued commitment fee payable pursuant to Clause 17.1;
(d) that both at the date of the Drawdown Notice and at the
Drawdown Date for that Advance:
(i) no Event of Default or Potential Event of Default
has occurred and is continuing or would result from
the making of the Advance;
(ii) the representations and warranties in Clause 9.1 and
those of the Borrower or any Security Party which are
set out in the other Finance Documents would be true
and not misleading if repeated on each of those dates
with reference to the circumstances then existing;
(iii) none of the circumstances contemplated by Clause 22
has occurred and is continuing; and
(e) that, if the ratio set out in Clause 12.1 were applied
immediately following the making of the Advance, the Borrower
would not be obliged to provide additional security or prepay
part of the Loan under that Clause.
8.2 If the Lender, at its discretion, permits an Advance to be made
before certain of the conditions referred to in Clause 8.1 are satisfied, the
Borrower shall ensure that those conditions are satisfied within 5 Business days
after the Drawdown Date for that Advance (or such longer period as the Lender
may specify).
9 REPRESENTATIONS AND WARRANTIES
9.1 The Borrower represents and warrants to the Lender and the Security
Trustee as follows.
9.2 The Borrower is duly incorporated and validly existing under the
laws of England.
9.3 The Borrower has an authorised share capital of L.655,865
divided into 655,865 registered shares of L.1 each, of which 655,767 shares
have been issued fully paid, and the legal title (other than the legal title to
1 share held by GOMI) and beneficial ownership of all those shares is held,
free of any Security Interest (except as disclosed in writing to the Lender) or
other claim, by GNS.
9.4 The Borrower has the corporate capacity, and has taken
all corporate action and obtained all official consents necessary for it:
(a) to execute the Building Contract;
(b) to execute the Finance Documents to which the Borrower is a
party; and
(c) to borrow under this Agreement and to make all the payments
contemplated by, and to comply with, those Finance Documents.
9.5 All the official consents referred to in Clause 9.4 remain in force
and nothing has occurred which makes any of them liable to revocation.
9.6 The Finance Documents to which the Borrower is a party, do now or,
as the case may be, will, upon execution and delivery (and, where applicable,
registration as provided for in the Finance Documents):
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(a) constitute the Borrower's legal, valid and binding
obligations enforceable against the Borrower in accordance
with their respective terms; and
(b) create legal, valid and binding Security Interests
enforceable in accordance with their respective terms;
subject to any relevant insolvency laws affecting creditors' rights
generally.
9.7 The execution by the Borrower of each Finance Document, and the
borrowing by the Borrower of the Loan, and its compliance with each Finance
Document will not involve or lead to a contravention of:
(a) any law or official requirement; or
(b) the constitutional documents of the Borrower; or
(c) any contractual or other obligation or restriction which is
binding on the Borrower or any of its assets.
9.8 All payments which the Borrower is liable to make under the
Finance Documents may be made without deduction or withholding for or on
account of any tax payable under any law of England.
9.9 No Event of Default or Potential Event of Default has occurred and
is continuing.
9.10 All information which has been provided in writing by or on behalf
of the Borrower or any Security Party to the Lender in connection with any
Finance Document satisfied the requirements of Clause 10.5; all audited and
unaudited accounts which have been so provided satisfied the requirements of
Clause 10.7; and there has been no material adverse change in the financial
position or state of affairs of the Borrower from that disclosed in the latest
of those accounts.
9.11 No legal or administrative action involving the Borrower has been
commenced or taken or, to the Borrower's knowledge, is likely to be commenced
or taken which, in either case, would be likely to have a material adverse
effect on the Borrower's financial position or profitability.
9.12 The copy of the Building Contract delivered to the Lender before the
date of this Agreement is a true and complete copy; the Building Contract
constitutes valid, binding and enforceable obligations of Brattvag Skipsverft AS
and the Borrower respectively in accordance with its terms; and no amendments or
additions to the Building Contract have been agreed nor has the Borrower or
Brattvag Skipsverft AS waived any of their respective rights under the Building
Contract.
9.13 There is no agreement or understanding to allow or pay any rebate,
premium, commission or other payment (howsoever described) to the Borrower or a
third party in connection with the purchase by the Borrower of the Newbuilding,
other than as disclosed to the Lender in writing on or prior to the date of this
Agreement.
9.14 At the date of this Agreement, the Borrower is in compliance with
Clauses 10.2, 10.4, 10.9 and 10.13.
9.15 The Borrower has paid all taxes applicable to, or imposed on or in
relation to the Borrower, its business or any Ship.
10 GENERAL UNDERTAKINGS
10.1 The Borrower undertakes with the Lender and the Security Trustee to
comply with the following provisions of this Clause 10 at all times during the
Security Period, except as the Lender may otherwise permit in writing.
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10.2 The Borrower will hold the legal title to, and own the entire
beneficial interest in each Ship, her Insurances and her Earnings, free from
all Security Interests and other interests and rights of every kind, except for
those created by the Finance Documents and the effect of assignments contained
in the Finance Documents, but this undertaking shall not apply to the
Newbuilding until the second Drawdown Date.
10.3 The Borrower will not transfer, lease or otherwise dispose of:
(a) all or a substantial part of its assets, whether by one
transaction or a number of transactions, whether related or
not; or
(b) any debt payable to it or any other right (present, future or
contingent right) to receive a payment, including any right to
damages or compensation.
10.4 The Borrower will not incur any liabilities or obligations except:
(a) those existing at the date of this Agreement;
(b) those arising under the Building Contract and the Finance
Documents;
(c) those incurred in the ordinary course of managing, operating
and chartering any vessel owned, managed or chartered by the
Borrower;
(d) those incurred in ordering and acquiring one additional
platform supply vessel of the same UT 755 design as the
Newbuilding and otherwise as already disclosed by the Borrower
to the Lender in writing; or
(e) in addition to those covered by paragraphs (a) to (d) above,
those not exceeding L.500,000 in aggregate at any time.
10.5 All financial and other information which is provided in writing by
or on behalf of the Borrower under or in connection with any Finance Document
will be true and not misleading and will not omit any material fact or
consideration.
10.6 The Borrower will send to the Lender:
(a) as soon as possible, but in no event later than 150 days
after the end of each financial year of the Borrower, the
audited accounts of the Borrower;
(b) as soon as possible, but in no event later than 45 days
after the end of each quarter in each financial year of the
Borrower:
(i) unaudited accounts of the Borrower prepared in
accordance with accounting principles generally
accepted in England, consistently applied and
certified as to their correctness by a director of the
Borrower; and
(ii) management accounts in a format approved by the
Lender which show the results of the operation of each
Ship during the preceding financial quarter and which
are certified as to their correctness by a director of
the Borrower; and
(iii) a compliance certificate in the form set out in
Schedule 4 signed by a director of the Borrower.
10.7 All accounts (audited and unaudited) delivered under Clause 10.6 will:
(a) be prepared in accordance with all applicable laws and
accounting principles generally accepted in England
consistently applied;
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(b) give a true and fair view of the state of affairs of the
Borrower at the date of those accounts and of its profit for
the period to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of
the Borrower.
10.8 The Borrower will send to the Lender, at the same time as they are
despatched, copies of all communications which are despatched to the Borrower's
shareholders or creditors or any class of them (other than communications to a
specific creditor under the terms of any agreement with that creditor)
10.9 The Borrower will maintain in force and promptly obtain or renew,
and will promptly send certified copies to the Lender of, all official
consents required:
(a) for the Borrower to perform its obligations under any Finance
Document;
(b) for the validity or enforceability of any Finance Document;
(c) for the Borrower to continue to own and operate each Ship;
and the Borrower will comply with the terms of all such official
consents.
10.10 The Borrower will promptly register, file, record or enrol any Finance
Document with any court or authority in England, Bermuda or Panama, pay any
stamp, registration or similar tax in England, Bermuda or Panama in respect of
any Finance Document, give any notice or take any other step which may be or
become necessary or desirable for any Finance Document to be valid, enforceable
or admissible in evidence or to ensure or protect the priority of any Security
Interest which it creates.
10.11 The Borrower will provide the Lender with details of any legal or
administrative action involving the Borrower, any Security Party or any Ship,
her Earnings or her Insurances as soon as such action is instituted or it
becomes apparent to the Borrower that it is likely to be instituted, unless it
is clear that the legal or administrative action cannot be considered material
in the context of any Finance Document.
10.12 The Borrower will not agree to any material amendment or supplement
to, or waive or fail to enforce, the Building Contract or any of its
provisions.
10.13 The Borrower will maintain its registered office, and keep its
corporate documents and records, at the address stated at the commencement of
this Agreement.
10.14 The Borrower will, within two Business Days after service by the
Lender of a written request, serve on the Lender a notice which is signed by
two directors of the Borrower and which:
(a) states that no Event of Default or Potential Event of
Default has occurred; or
(b) states that no Event of Default or Potential Event of
Default has occurred, except for a specified event or matter,
of which all material details are given.
10.15 The Borrower will notify the Lender as soon as the Borrower becomes
aware of:
(a) the occurrence of an Event of Default or a Potential Event
of Default; or
(b) any matter which indicates that an Event of Default or a
Potential Event of Default may have occurred;
and will thereafter keep the Lender fully up-to-date with all
developments.
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10.16 The Borrower will, as soon as practicable after receiving the request,
provide the Lender with any additional financial or other information relating:
(a) to the Borrower, any Ship, her Insurances or her Earnings;
or
(b) to any other matter relevant to, or to any provision of, a
Finance Document;
which may reasonably be requested by the Lender at any time.
11 CORPORATE UNDERTAKINGS
11.1 The Borrower also undertakes with the Lender and the Security
Trustee to comply with the following provisions of this Clause 11 at all times
during the Security Period except as the Lender may otherwise permit (such
permission not to be unreasonably withheld in relation to Clause 11.3(g)).
11.2 The Borrower will maintain its separate corporate existence under
the laws of England.
11.3 The Borrower will not:
(a) make any material change in the nature of its business as
conducted at the date of this Agreement; or
(b) repay any principal of or interest on a loan owing to any
such person or company as is referred to in Clause 11.3(c)
below or pay any dividend or make any other form of
distribution or effect any form of redemption, purchase or
return of share capital unless, after doing so, the aggregate
of the net working capital of the Borrower and of each
Guarantor exceeds L.4,000,000; or
(c) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in
the Borrower's share or loan capital; or
(ii) any company in or with which such a person is
directly or indirectly interested or connected;
or enter into any transaction with or involving such a person
or company on terms which are, in any respect, less
favourable to the Borrower than those which it could obtain
in a bargain made at arms' length;
(d) assign or otherwise dispose of any book debt;
(e) issue, allot or grant any person a right to any shares in
its capital or repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than government
issued bills and bonds, certificates of deposit issued by
prime banks and marketable securities quoted on a recognised
stock exchange, or enter into any transaction in a
derivative (other than an interest rate or currency hedge
entered into in the ordinary course of business); or
(g) enter into any form of amalgamation, merger or de- merger or
any form of reconstruction or reorganisation.
11.4 The Borrower will:
(a) at all times retain Liquid Assets of at least L.500,000;
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(b) ensure that the Borrower's Value Adjusted Equity is at least
L.12,000,000; and
(c) ensure that the Borrower's Value Adjusted Equity is at least
40 per cent. of the Borrower's Value Adjusted Total Assets.
12 SECURITY COVER
12.1 The Borrower undertakes with the Lender and the Security Trustee
that, if the Lender notifies the Borrower that:
(a) the aggregate of the market values (determined as provided
below) of the Ships; plus
(b) the net realisable value of any additional security
previously provided under this Clause 12;
is below 150 per cent. of the Loan, the Borrower will, within one
month after the date on which the Lender's notice is served, either:
(i) provide, or ensure that a third party provides,
additional security which, in the reasonable opinion
of the Lender, has a net realisable value at least
equal to the shortfall and which, if it consists of
or includes a Security Interest, covers such asset or
assets and is documented in such terms as the Lender
may reasonably approve or require; or
(ii) prepay in accordance with Clause 7 such part (at
least) of the Loan as will eliminate the shortfall.
12.2 In Clause 12.1 "security" means a Security Interest over an asset or
assets (whether securing the Borrower's liabilities under the Finance Documents
or a guarantee in respect of those liabilities), or a guarantee, letter of
credit or other security in respect of the Borrower's liabilities under the
Finance Documents.
12.3 The Borrower shall not be deemed to have complied with Clause 12.1
(i) above until the Lender has received in connection with the additional
security certified copies of documents of the kinds referred to in paragraphs
3, 4 and 5 of Part I Schedule 2 below and such legal opinions in terms
reasonably acceptable to the Lender from such lawyers as it may select.
12.4 The market value of a Ship at any date is the arithmetic mean of the
values shown by valuations prepared:
(a) as at a date not more than 14 days previously;
(b) by 2 independent sale and purchase shipbrokers which
the Borrower has appointed and the Lender has approved or (if
the Borrower has not appointed 2 such shipbrokers promptly
after a request from the Lender to do so) which the Lender
has appointed for the purpose;
(c) with or without physical inspection of that Ship (as the
Lender may require);
(d) on the basis of a sale for prompt delivery for cash on
normal arm's length commercial terms as between a willing
seller and a willing buyer, free of any existing charter or
other contract of employment;
(e) after deducting the estimated amount of the usual and
reasonable expenses which would be incurred in connection
with the sale.
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12.5 The net realisable value of any additional security which is provided
under Clause 12.1 and which consists of a Security Interest over a vessel shall
be that shown by a valuation complying with the requirements of Clause 12.4.
12.6 Any valuation under Clause 12.1(i), 12.4 or 12.5 shall be binding
and conclusive as regards the Borrower, as shall be any valuation which the
Lender makes of a security which does not consist of or include a Security
Interest.
12.7 The Borrower shall promptly provide the Lender and any shipbroker or
expert acting under Clause 12.4 or 12.5 with any information which the Lender
or the shipbroker or expert may request for the purposes of the valuation; and,
if the Borrower fails to provide the information by the date specified in the
request, the valuation may be made on any basis and assumptions which the
shipbroker or the Lender (or the expert appointed by it) considers prudent.
12.8 The Borrower shall, on demand, pay the Lender the amount of the fees
and expenses of any shipbroker or expert instructed by the Lender under this
Clause (but not more often than twice in any calendar year) and all legal and
other expenses incurred by the Lender in connection with any matter arising out
of this Clause.
13 PAYMENTS AND CALCULATIONS
13.1 All payments to be made by the Borrower to the Lender or the
Security Trustee under a Finance Document shall be made to the Lender (or to
the Security Trustee, in the case of an amount payable to it):
(i) by not later than 11.00 a.m. (London time) on the
due date;
(ii) in same day Sterling funds settled in such manner
as the Lender shall specify as being customary at the
time for the settlement of international transactions
of the type contemplated by this Agreement);
(iii) in the case of an amount payable to the Lender, to
such account of the Lender with such bank as the
Lender may from time to time notify to the Borrower;
and
(iv) in the case of an amount payable to the Security
Trustee, to such account of the Security Trustee with
such bank as the Security Trustee may from time to
time notify to the Borrower.
13.2 If any payment by the Borrower under a Finance Document would
otherwise fall due on a day which is not a Business Day:
(a) the due date shall be extended to the next succeeding
Business Day; or
(b) if the next succeeding Business Day falls in the next
calendar month, the due date shall be brought forward to the
immediately preceding Business Day;
and interest shall be payable during any extension under paragraph
(a) at the rate payable on the original due date.
13.3 All interest and commitment fee and any other payments under any
Finance Document which are of an annual or periodic nature shall accrue from
day to day and shall be calculated on the basis of the actual number of days
elapsed and a 365 day year.
13.4 The Lender shall maintain an account showing the amounts advanced
by the Lender and all other sums owing to the Lender from the Borrower and each
Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.
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13.5 If the account maintained under Clauses 13.4 shows an amount to be
owing by the Borrower or a Security Party to the Lender, that account shall be
prima facie evidence that that amount is owing to the Lender.
14 APPLICATION OF RECEIPTS
14.1 Except as any Finance Document may otherwise provide, any sums which
are received or recovered by the Lender or the Security Trustee under or by
virtue of any Finance Document shall be applied:-
FIRST: in or towards satisfaction of any amounts then due and payable
under the Finance Documents (or any of them) in such order of
application and/or such proportions as the Lender may specify by
notice to the Borrower, the Security Parties and the Security
Trustee;
SECONDLY: in retention of an amount equal to any amount not then due
and payable under any Finance Document but which the Lender, by
notice to the Borrower, the Security Parties and the Security
Trustee, states in its opinion will or may become due and payable in
the future and, upon those amounts becoming due and payable, in or
towards satisfaction of them in accordance with the foregoing
provisions of this Clause; and
THIRDLY: any surplus shall be paid to the Borrower or to any other
person appearing to be entitled to it.
14.2 The Lender may, by notice to the Borrower, the Security Parties and
the Security Trustee, provide for a different manner of application from that
set out in Clause 14.1 either as regards a specified sum or sums or as regards
sums in a specified category or categories.
14.3 The Lender may give notices under Clause 14.2 from time to time;
and such a notice may be stated to apply not only to sums which may be received
or recovered in the future, but also to any sum which has been received or
recovered on or after the third Business Day before the date on which the
notice is served.
14.4 This Clause 14 and any notice which the Lender gives under Clause
14.2 shall override any right of appropriation possessed, and any appropriation
made, by the Borrower or any Security Party.
15 APPLICATION OF EARNINGS
15.1 The Borrower undertakes with the Lender to ensure that, throughout
the Security Period (and subject only to the provisions of the Deeds of
Covenant), all the Earnings are paid to the Earnings Account.
15.2 Until such time after an Event of Default occurs as the Lender
directs to the contrary, sums standing to the credit of the Earnings Account
shall be at the disposal of the Borrower for any purpose not inconsistent with
the terms of the Finance Documents.
15.3 The Lender shall be entitled (but not obliged) from time to time to
debit the Earnings Account without prior notice in order to discharge any
amount due and payable to it under Clause 17 or 18 or payment of which it or
the Security Trustee has become entitled to demand under Clause 17 or 18.
16 EVENTS OF DEFAULT
16.1 An Event of Default occurs if:
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(a) the Borrower or any Security Party fails to pay when due or
(if so payable) on demand any sum payable under a Finance
Document or under any document relating to a Finance
Document; or
(b) any breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3,
11.4 or 12.1; or
(c) any breach by the Borrower or any Security Party occurs of
any provision of a Finance Document (other than a breach
covered by paragraph (a) or (b) above) unless the breach is
capable of remedy and within 14 Business Days (or such other
remedy period as may be specified by the relevant provision
of the Finance Documents) after the Lender serves on the
Borrower a notice requiring the breach to be remedied, the
Lender notifies the Borrower in writing that the breach has
been remedied to its satisfaction; or
(d) any representation, warranty or statement made by, or by an
officer of, the Borrower or a Security Party in a Finance
Document or in the Drawdown Notice or any other notice or
document relating to a Finance Document is untrue or
misleading when it is made; or
(e) any of the following occurs in relation to any Financial
Indebtedness of, or aggregating, L.50,000 or more or the
equivalent in another currency of a Relevant Person (as
defined in Clause 16.7) unless such occurrence is being
contested by bona fide proceedings diligently pursued:
(i) any such Financial Indebtedness is not paid when due
or, if so payable, on demand; or
(ii) any such Financial Indebtedness becomes due and
payable or capable of being declared due and payable
prior to its stated maturity date as a consequence of
any event of default; or
(iii) a lease, hire purchase agreement or charter creating
any such Financial Indebtedness is terminated by the
lessor or owner or becomes capable of being
terminated as a consequence of any termination event;
or
(iv) any overdraft, loan, note issuance, acceptance credit,
letter of credit, guarantee, foreign exchange or
other facility, or any swap or other derivative
contract or transaction, relating to any such
Financial Indebtedness ceases to be available or
becomes capable of being terminated as a result of
any event of default, or cash cover is required, or
becomes capable of being required, in respect of such
a facility as a result of any event of default; or
(v) any Security Interest securing any such Financial
Indebtedness becomes enforceable; or
(f) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the reasonable opinion
of the Lender, unable to pay its debts as they fall
due; or
(ii) any assets of a Relevant Person are subject of any
form of execution, attachment, arrest, sequestration
or distress in respect of a sum of, or sums
aggregating, L.50,000 or more or the equivalent in
another currency unless such event is being contested
by bona fide proceedings diligently pursued; or
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(iii) any administrative or other receiver is appointed
over any asset of a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of
bankruptcy or any formal statement to the effect that
it is insolvent or likely to become insolvent, or a
winding up or administration order is made in
relation to a Relevant Person, or the members or
directors of a Relevant Person pass a resolution to
the effect that it should be wound up, placed in
administration or cease to carry on business, save
that this paragraph does not apply to a fully solvent
winding up of a Relevant Person other than the
Borrower or a Guarantor which is, or is to be,
effected for the purposes of an amalgamation or
reconstruction previously approved by the Lender and
effected not later than 3 months after the
commencement of the winding up; or a petition is
(v) presented in any Pertinent Jurisdiction for the
winding up or administration, or the appointment of a
provisional liquidator, of a Relevant Person unless
the petition is being contested in good faith and on
substantial grounds and is dismissed or withdrawn
within 30 days of the presentation of the petition;
or
(vi) a Relevant Person petitions a court, or presents any
proposal for, any form of judicial or non-judicial
suspension or deferral of payments, reorganisation of
its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value)
of its creditors or of any class of them or any such
suspension or deferral of payments, reorganisation or
arrangement is effected by court order, contract or
otherwise; or any meeting
(vii) of the members or directors of a Relevant Person
is summoned for the purpose of considering a
resolution or proposal to authorise or take any
action of a type described in paragraphs (iii), (iv),
(v) or (vi) above; or
(viii) in a Pertinent Jurisdiction other than England, any
event occurs or any procedure is commenced which, in
the opinion of the Lender, is similar to any of the
foregoing; or
(g) the Borrower ceases or suspends carrying on its business or
a part of its business which, in the opinion of the Lender,
is material in the context of this Agreement; or
(h) it becomes unlawful in any Pertinent Jurisdiction or
impossible (i) for the Borrower or any Security Party to
discharge any liability under a Finance Document or to comply
with any other obligation which the Lender considers material
under a Finance Document or (ii) for the Lender or the
Security Trustee to exercise or enforce any right under, or
to enforce any Security Interest created by, a Finance
Document; or
(i) any official consent necessary to enable the Borrower to own,
operate or charter the Ships or to enable the Borrower or any
Security Party to comply with any provision which the Lender
considers material of a Finance Document or the Building
Contract is not granted, expires without being renewed, is
revoked or becomes liable to revocation or any condition of
such a consent is not fulfilled; or
(j) it appears to the Lender that, without its prior consent, a
material change has occurred or probably has occurred in the
ultimate beneficial ownership of any of the shares in the
Borrower or either Guarantor or in the ultimate control of
the voting rights attaching to any of those shares; or
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(k) any provision which the Lender considers material of a
Finance Document proves to have been or becomes invalid or
unenforceable, or a Security Interest created by a Finance
Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have
ranked after, or loses its priority to, another Security
Interest or any other third party claim or interest; or
(l) the security constituted by a Finance Document is in any way
imperilled or in jeopardy; or
(m) there occurs any material (in the opinion of the Lender)
adverse change in the financial position of the Borrower or
either Guarantor in the light of which the Lender considers
that there is a significant risk that the Borrower or either
Guarantor is, or will later become, unable to discharge its
liabilities under the Finance Documents to which it is a
party as they fall due.
16.2 On, or at any time after, the occurrence of an Event of Default:
(a) the Lender may;
(i) serve on the Borrower a notice stating that all
obligations of the Lender to the Borrower under this
Agreement are terminated; and/or
(ii) serve on the Borrower a notice stating that the Loan,
all accrued interest and all other amounts accrued or
owing under this Agreement are immediately due and
payable; and/or
(iii) take any other action which, as a result of the
Event of Default or any notice served under paragraph
(i) or (ii) above, the Lender is entitled to take
under any Finance Document or any applicable law;
and/or
16.2 (b) the Security Trustee may take any action which, as a result
of the Event of Default or any notice served under paragraph
(a) (i) or (ii) above, the Security Trustee and/or the Lender
is entitled to take under any Finance Document or any
applicable law.
16.3 On the service of a notice under paragraph (a)(i) of Clause 16.2, all
the obligations of the Lender to the Borrower under this Agreement shall
terminate.
16.4 On the service of a notice under paragraph (a)(ii) of Clause 16.2, the
Loan, all accrued interest and all other amounts accrued or owing from the
Borrower or any Security Party under this Agreement and every other Finance
Document shall become immediately due and payable.
16.5 The Lender may serve notices under paragraphs (a) (i) and (ii) of
Clause 16.2 simultaneously or on different dates and it may take any action
referred to in that Clause if no such notice is served or simultaneously with
or at any time after the service of both or either of such notices.
16.6 Neither the Lender nor the Security Trustee nor any receiver or
manager appointed by the Lender or the Security Trustee, shall have
any liability to the Borrower or a Security Party:
(a) for any loss caused by an exercise of rights under,
or enforcement of a Security Interest created by, a
Finance Document or by any failure or delay to
exercise such a right or to enforce such a Security
Interest; or
(b) as mortgagee in possession or otherwise, for any
income or principal amount which might have been
produced by or realised from any asset comprised in
such a
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Security Interest or for any reduction (however
caused) in the value of such an asset;
except that this does not exempt the Lender, the Security Trustee or
a receiver or manager from liability for losses shown to have been
caused mainly and directly by the gross and culpable negligence or
the dishonesty of the Lender's or the Security Trustee's own officers
and employees or (as the case may be) such receiver's or manager's
own partners or employees.
16.7 In this Clause 16 "a Relevant Person" means the Borrower, each
Security Party and any company which is a subsidiary or a fellow-subsidiary of
the Borrower or a Security Party; but excluding any company which is dormant
and the value of whose gross assets is L.50,000 or less.
16.8 In Clause 16.1(e) references to an event of default or a termination
event include any event, howsoever described, which is similar to an event of
default in a facility agreement or a termination event in a finance lease; and
in Clause 16.1(f) "petition" includes an application.
17 FEES AND EXPENSES
17.1 The Borrower shall pay to the Lender:
(a) (i) on the earlier of the first Drawdown Date and the date
falling one month after the date of this Agreement, an
arrangement fee of L.27,847.50 and (ii) on the earlier of the
second Drawdown date and 30th June, 1998, an arrangement fee
of L.22,500; and
(b) quarterly in arrears during the period from (and including)
9th May, 1997 to the earlier of (i) the second Drawdown Date
and (ii) 30th June, 1998, and on the last day of that period
a commitment fee at the rate of 3/8 per cent. per annum on
the undrawn amount of the Loan;
(c) in respect of any amounts prepaid pursuant to Clause 7.12
which remain available for re-borrowing, quarterly in arrears
during the period from (and including) 9th May, 1997 to the
earlier of (i) the date on which such amount is advanced to
the Borrower, and (ii) such amount ceases to be available for
re-borrowing, and on the last day of that period a commitment
fee at the rate of 3/8 per cent. per annum on the undrawn
amount of the Loan, and
(d) for the benefit of the Security Trustee, on the first
Drawdown Date and each anniversary thereof, a trustee fee of
L.5,000.
17.2 The Borrower shall pay to the Lender or the Security Trustee on its
demand the amount of all expenses incurred by the Lender or the Security
Trustee in connection with the negotiation, preparation, execution or
registration of any Finance Document or any related document or with any
transaction contemplated by a Finance Document or a related document.
17.3 The Borrower shall pay to the Lender or the Security Trustee, on its
demand, the amount of all expenses incurred by the Lender or the Security
Trustee in connection with:
(a) any amendment or supplement to a Finance Document, or any
proposal for such an amendment to be made;
(b) any consent or waiver by the Lender or the Security Trustee
concerned under or in connection with a Finance Document, or
any request for such a consent or waiver;
(c) the valuation of any security provided or offered under
Clause 12 or any other matter relating to such security; or
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(d) any step taken by the Lender or the Security Trustee with a
view to the protection, exercise or enforcement of any right
or Security Interest created by a Finance Document or for any
similar purpose.
There shall be recoverable under paragraph (d) the full amount of
all legal expenses, whether or not such as would be
allowed under rules of court or any taxation or other procedure
carried out under such rules.
17.4 The Borrower shall promptly pay any tax payable on or by reference
to any Finance Document, and shall, on the Lender's demand, fully indemnify the
Lender and the Security Trustee against any liabilities and expenses resulting
from any failure or delay by the Borrower to pay such a tax.
17.5 A notice which is signed by two officers of the Lender or the
Security Trustee, which states that a specified amount, or aggregate amount, is
due to the Lender or the Security Trustee (as the case may be) under this
Clause 17 and which indicates (without necessarily specifying a detailed
breakdown) the matters in respect of which the amount, or aggregate amount, is
due shall be prima facie evidence that the amount, or aggregate amount, is due.
18 INDEMNITIES
18.1 The Borrower shall fully indemnify the Lender and the Security
Trustee on its demand in respect of all expenses, liabilities and losses which
are incurred by the Lender or the Security Trustee, or which the Lender or the
Security Trustee reasonably and with due diligence estimates that it will
incur, as a result of or in connection with:
(a) the Loan not being borrowed on the date specified in the
Drawdown Notice for any reason other than a default by the
Lender or the Security Trustee;
(b) the receipt or recovery of all or any part of the Loan or an
overdue sum otherwise than on the last day of an Interest
Period or other relevant period;
(c) any failure (for whatever reason) by the Borrower to make
payment of any amount due under a Finance Document on the due
date or, if so payable, on demand (after giving credit for
any default interest paid by the Borrower on the amount
concerned under Clause 6);
(d) the occurrence and/or continuance of an Event of Default or
a Potential Event of Default and/or the acceleration of
repayment of the Loan under Clause 16;
and in respect of any tax (other than tax on its overall net income)
for which the Lender or the Security Trustee is liable in connection
with any amount paid or payable to the Lender (whether for its own
account or otherwise) under any Finance Document.
18.2 Without limiting its generality, Clause 18.1 covers any liability,
expense or loss, including a loss of a prospective profit, incurred
by the Lender or the Security Trustee:
(a) in liquidating or employing deposits from third parties
acquired or arranged to fund or maintain all or any part of
the Loan and/or any overdue amount (or an aggregate amount
which includes the Loan or any overdue amount); and
(b) in terminating, or otherwise in connection with, any interest
and/or currency swap or any other transaction entered into
(whether with another legal entity or with another office or
department of the Lender or the Security Trustee) to hedge
any exposure arising under this Agreement or a number of
transactions of which this Agreement is one.
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18.3 The Borrower shall fully indemnify the Lender and the Security
Trustee on its demand in respect of all claims, demands, proceedings,
liabilities, taxes, losses and expenses of every kind ("liability items") which
may be made or brought against, or incurred by, the Lender or the Security
Trustee, in any country, in relation to:
(a) any action taken, or omitted or neglected to be taken, under
or in connection with any Finance Document by the Lender or
the Security Trustee or by any receiver appointed under a
Finance Document;
(b) any other event, matter or question which occurs or arises
at any time during the Security Period and which has any
connection with, or any bearing on, any Finance Document, any
payment or other transaction relating to a Finance Document
or any asset covered (or previously covered) by a Security
Interest created (or intended to be created) by a Finance
Document;
other than liability items which are shown to have been caused mainly
and directly by the gross and culpable negligence or the dishonesty
of the Lender's or the Security Trustee's own officers or employees.
18.4 Without prejudice to its generality, Clause 18.3 covers any
liability items which arise, or are asserted, under or in connection with any
law relating to safety at sea, pollution or the protection of the environment.
18.5 If any sum due from the Borrower or any Security Party to the Lender
or the Security Trustee under a Finance Document or under any order or judgment
relating to a Finance Document has to be converted from the currency in which
the Finance Document provided for the sum to be paid (the "Contractual
Currency") into another currency (the "Payment Currency") for the purpose of:
(a) making or lodging any claim or proof against the Borrower or
any Security Party, whether in its liquidation, any
arrangement involving it or otherwise; or
(b) obtaining an order or judgment from any court or other
tribunal; or
(c) enforcing any such order or judgment;
the Borrower shall indemnify the Lender against the loss arising when
the amount of the payment actually received by the Lender is
converted at the available rate of exchange into the Contractual
Currency.
Here the "available rate of exchange" means the rate at which the
Lender is able at the opening of business (London time) on the
Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.
18.6 Clause 18.5 creates a separate liability of the Borrower which is
distinct from its other liabilities under the Finance Documents and which shall
not be merged in any judgment or order relating to those other liabilities.
18.7 A notice which is signed by two officers of the Lender, which states
that a specified amount, or aggregate amount, is due to the Lender under this
Clause 18 and which indicates (without necessarily specifying a detailed
breakdown) the matters in respect of which the amount, or aggregate amount, is
due shall be prima facie evidence that the amount, or aggregate amount, is due.
19 NO SET-OFF OR TAX DEDUCTION
19.1 All amounts due from the Borrower under a Finance Document
shall be paid:
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(a) without any form of set-off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction
which the Borrower is required by law to make.
19.2 If the Borrower is required by law to make a tax deduction from any
payment:
(a) the Borrower shall notify the Lender as soon as it becomes
aware of the requirement;
(b) the Borrower shall pay the tax deducted to the appropriate
taxation authority promptly, and in any event before any fine
or penalty arises;
(c) the amount due in respect of the payment shall be increased
by the amount necessary to ensure that the Lender and the
Security Trustee receives and retains (free from any
liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it
would otherwise have received.
19.3 Within one month after making any tax deduction, the Borrower shall
deliver to the Lender documentary evidence satisfactory to the Lender that the
tax had been paid to the appropriate taxation authority.
19.4 In this Clause 19 "tax deduction" means any deduction or withholding
for or on account of any present or future tax except tax on the Lender's or
Security Trustee's overall net income.
20 ILLEGALITY, ETC
20.1 This Clause 20 applies if the Lender notifies the Borrower that it
has become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a
new law, an amendment to an existing law or a change in the
manner in which an existing law is or will be interpreted or
applied; or
(b) contrary to, or inconsistent with, an official requirement,
for the Lender to maintain or give effect to any of its
obligations under this Agreement in the manner contemplated
by this Agreement.
20.2 On the Lender so notifying the Borrower, the Lender's obligation to
make the Loan shall terminate; and thereupon or, if later, on the date
specified in the Lender's notice as the date on which the notified event would
become effective the Borrower shall prepay the Loan in full in accordance with
Clause 7.
21 INCREASED COSTS
21.1 This Clause 21 applies if the Lender notifies the Borrower that it
considers that as a result of:
(a) the introduction or alteration after the date of this
Agreement of a law or an official requirement or an
alteration after the date of this Agreement in the manner in
which a law is interpreted or applied (disregarding any
effect which relates to the application to payments under
this Agreement of a tax on the Lender's overall net income);
or
(b) the effect of complying with any official requirement
(including any which relates to capital adequacy or liquidity
controls or which affects the manner in which the Lender
allocates capital resources to its obligations under this
Agreement) which is
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introduced, or altered, or the interpretation or application
of which is altered, after the date of this Agreement,
is that the Lender (or a parent company of it) has incurred or will
incur an "increased cost", that is to say,:
(i) an additional or increased cost incurred as a result
of, or in connection with, the Lender having entered
into, or being a party to, this Agreement or having
taken an assignment of rights under this Agreement,
of funding or maintaining the Loan or performing its
obligations under this Agreement, or of having
outstanding all or any part of the Loan or other
unpaid sums; or
(ii) a reduction in the amount of any payment to the
Lender under this Agreement or in the effective
return which such a payment represents to the Lender
or on its capital;
(iii) an additional or increased cost of funding all or
maintaining all or any of the advances comprised in
a class of advances formed by or including the Loan
or (as the case may require) the proportion of that
cost attributable to the Loan; or
(iv) a liability to make a payment, or a return foregone,
which is calculated by reference to any amounts
received or receivable by the Lender under this
Agreement;
but not an item attributable to a change in the rate of tax
on the overall net income of the Lender (or a parent company of it)
or an item covered by the indemnity for tax in Clause 18.1 or by
Clause 19.
21.2 The Borrower shall pay to the Lender, on its demand, the amounts
which the Lender from time to time notifies the Borrower that it has specified
to be necessary to compensate it for the increased cost.
21.3 If the Borrower is not willing to continue to compensate the Lender
for the increased cost under Clause 21.2, the Borrower may give the Lender not
less than 14 days' notice of its intention to prepay the Loan at the end of an
Interest Period.
21.4 That notice shall be irrevocable; and on the date specified in its
notice of intended prepayment, the Borrower shall prepay (without premium or
penalty) the Loan, together with accrued interest thereon at the applicable
rate plus the Margin.
21.5 Clause 7 shall apply in relation to the prepayment.
22 CHANGES IN CIRCUMSTANCES
21.1 This Clause 22 applies if by reason of circumstances affecting
the London Interbank Market the Lender is unable to determine LIBOR in
accordance with Clause 4.3 or is unable to obtain Sterling in the London
Interbank Market in order to fund the Loan (or any part of it) during any
Interest Period.
22.2 The Lender shall promptly notify the Borrower stating the
circumstances which have caused its notice to be given.
23.3 If the Lender's notice is served on the Borrower before an Advance
is made, the Lender's obligation to make that Advance shall be suspended while
the circumstances referred to in the Lender's notice continue.
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22.4 The Borrower and the Lender shall use reasonable endeavours to agree,
within the 30 days after the date on which the Lender serves its notice under
Clause 22.2 (the "Negotiation Period"), an alternative interest rate or (as the
case may be) an alternative basis for the Lender to fund or continue to fund
the Loan during the Interest Period concerned.
22.5 Any alternative interest rate or an alternative basis which is
agreed during the Negotiation Period shall take effect in accordance with the
terms agreed.
22.6 However, if an alternative interest rate or alternative basis is not
agreed within the Negotiation Period, and the relevant circumstances are
continuing at the end of the Negotiation Period, then the Lender shall set an
interest period and interest rate representing the cost of funding of the
Lender in Sterling or in any available currency of the Loan plus the Margin;
and the procedure provided for by this Clause 22.6 shall be repeated if the
relevant circumstances are continuing at the end of the interest period so set
by the Lender.
22.7 If the Borrower does not agree with an interest rate set by the
Lender under Clause 22.6, the Borrower may give the Lender not less than 15
Business Days' notice of its intention to prepay at the end of the interest
period set by the Lender.
22.8 That notice shall be irrevocable; and on the last Business Day of
the interest period set by the Lender, the Borrower shall prepay (without
premium or penalty) the Loan, together with accrued interest thereon at the
applicable rate plus the Margin.
22.9 Clause 7 shall apply in relation to the prepayment.
23 SET-OFF
23.1 The Lender and the Security Trustee may without prior notice:
(a) apply any balance (whether or not then due) which at any
time stands to the credit of any account in the name of the
Borrower at any office in any country of the Lender or the
Security Trustee in or towards satisfaction of any sum then
due from the Borrower to the Lender or the Security Trustee
under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of
a deposit of the Borrower;
(ii) convert or translate all or any part of a deposit or
other credit balance into Sterling;
(iii) enter into any other transaction or make any entry
with regard to the credit balance which the Lender or
the Security Trustee considers appropriate.
23.2 Neither the Lender nor the Security Trustee shall be obliged to
exercise any of its rights under Clause 23.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of accounts,
charge, lien or other right or remedy to which the Lender or the Security
Trustee is entitled (whether under the general law or any document).
24 TRANSFERS AND CHANGES IN LENDING OFFICES
24.1 The Borrower may not, without the consent of the Lender:
(a) transfer any of its rights or obligations under any Finance
Document; or
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(b) enter into any merger, de-merger or other reorganisation,
or carry out any other act, as a result of which any of its
rights or liabilities would vest in, or pass to, another
person.
24.2 Subject to Clauses 24.4, a Lender (the "Transferor Lender") may at
any time at its sole cost and expense, with the consent of the Borrower (such
consent not to be unreasonably withheld and not to be required in the case of a
transfer to a subsidiary or the parent company of the Transferor Lender or to
another subsidiary of its parent company), cause:
(a) its rights in respect of all or part of the Loan; or
(b) its obligations to advance all or part of the Loan; or
(c) a combination of (a) and (b);
to be (in the case of its rights) transferred to, or (in the case of
its obligations) assumed by, another bank or financial institution (a
"Transferee Lender") by delivering to the Security Trustee a
completed certificate in the form set out in Schedule 3 with any
modifications approved or required by the Security Trustee (a
"Transfer Certificate") executed by the Transferor Lender and the
Transferee Lender.
24.3 As soon as reasonably practicable after a Transfer Certificate is
delivered to the Security Trustee, it shall (unless it has reason to believe
that the Transfer Certificate may be defective):
(a) sign the Transfer Certificate on behalf of itself, the
Borrower and each Security Party;
(b) on behalf of the Transferee Lender, send to the Borrower
and each Security Party letters or faxes notifying them of
the Transfer Certificate and attaching a copy of it;
(c) send to the Transferee Lender copies of the letters or faxes
sent under paragraph (b) above.
24.4 A Transfer Certificate becomes effective on the date, if any,
specified in the Transfer Certificate as its effective date, provided that it
is signed by the Security Trustee under Clause 24.3 on or before that date.
24.5 No assignment or transfer of any right or obligation of a Lender
under any Finance Document is binding on, or effective in relation to, the
Borrower, any Security Party or the Security Trustee unless it is effected,
evidenced or perfected by a Transfer Certificate.
24.6 However, if a Lender enters into any merger, de-merger or other
reorganisation as a result of which all its rights or obligations vest
in another person (the "successor"), the Security Trustee may, if it sees fit,
by notice to the successor and the Borrower waive the need for the execution
and delivery of a Transfer Certificate; and, upon service of the Security
Trustee's notice, the successor shall become a Lender with the same obligations
and rights as were held by the predecessor Lender.
24.7 A Transfer Certificate takes effect in accordance with English law
as follows:
(a) to the extent specified in the Transfer Certificate, all
rights and interests (present, future or contingent) which
the Transferor Lender has under or by virtue of the Finance
Documents are assigned to the Transferee Lender absolutely,
free of any defects in the Transferor Lender's title and of
any rights or equities which the Borrower or any Security
Party had against the Transferor Lender;
(b) the Transferor Lender's obligations are discharged to the
extent specified in the Transfer Certificate;
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(c) the Transferee Lender becomes a Lender with the obligations
previously held by the Transferor Lender specified in the
Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of
the Finance Documents which are applicable to the Lenders
generally, including those about the exclusion of liability
on the part of, and the indemnification of, the Security
Trustee and, to the extent that the Transferee Lender becomes
bound by those provisions (other than those relating to
exclusion of liability), the Transferor Lender ceases to be
bound by them;
(e) an Advance or part of an Advance which the Transferee Lender
makes after the Transfer Certificate's effective date ranks
in point of priority and security in the same way as it would
have ranked had it been made by the transferor, assuming that
any defects in the transferor's title and any rights or
equities of the Borrower or any Security Party against the
Transferor Lender had not existed; and
(f) the Transferee Lender becomes entitled to all the rights
under the Finance Documents which are applicable to the
Lenders generally and to the extent that the Transferee
Lender becomes entitled to such rights, the Transferor Lender
ceases to be entitled to them.
The rights and equities of the Borrower or any Security Party
referred to above include, but are not limited to, any right of set
off and any other kind of cross-claim.
24.8 The Borrower irrevocably authorises the Security Trustee to sign
Transfer Certificates on its behalf.
24.9 The Lender may sub-participate all or any part of its rights and/or
obligations under or in connection with the Finance Documents without the
consent of, or any notice to, the Borrower, any Security Party or the Security
Trustee.
24.10 The Lender may disclose to a potential transferee or sub-participant
any information which the Lender has received in relation to the Borrower, any
Security Party or their affairs under or in connection with any Finance
Document, unless the information is clearly of a confidential nature.
24.11 The Lender may change its lending office by giving notice to the
Borrower and the change shall become effective on the later of:
(a) the date on which the Borrower receives the notice; and
(b) the date, if any, specified in the notice as the date on
which the change will come into effect.
24.12 If, at the time of any transfer or change of lending office by the
Lender, circumstances exist which would oblige the Borrower to pay to the
Transferee Lender or the Lender under Clauses 19, 20 or 21 any sum in excess of
the sum (if any) which it would have been obliged to pay to the Lender under
the relevant Clause in the absence of that transfer or change of lending office
the Borrower shall not be obliged to pay that excess.
25 VARIATIONS AND WAIVERS
25.1 A document shall be effective to vary, waive, suspend or limit any
provision of a Finance Document, or the Lender's or the Security Trustee's
rights or remedies under such a provision or the general law, only if the
document is signed, or specifically agreed to by fax or telex, by the Borrower,
the Security Trustee and the Lender and, if the document relates to a Finance
Document to which a Security Party is party, by that Security Party.
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25.2 Except for a document which satisfies the requirements of Clauses
25.1, no document, and no act, course of conduct, failure or neglect to act,
delay or acquiescence on the part of the Lender or the Security Trustee (or any
person acting on its behalf) shall result in the Lender or the Security Trustee
(or any person acting on its behalf) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by the Borrower or a Security Party of an
obligation under a Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by
the general law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be enforced, or such right
or remedy to be exercised, within a certain time.
26 NOTICES
26.1 Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter, fax or telex;
and references in the Finance Documents to written notices, notices in writing
and notices signed by particular persons shall be construed accordingly.
26.2 A notice shall be sent:
(a) to the Borrower: 00 Xxxxxxxxx Xxxx
Xxxxxx XX00 0XX
Fax No: 0000 000 000
with a copy to:
000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx
Xxxxxxxxx 00000
Fax No: 000 000 0000
and
0 Xxxx Xxx Xxxx
Xxxxx 0000
Xxxxxxx
Xxxxx 00000
Fax No: 000 000 0000
(b) to the Lender or X.X. Xxx 0000 Sentrum
the Security Trustee: 0107 Oslo
Fax No: 00 00 00 00
(att: International Loans Admin.)
or to such other address as the relevant party may notify the other.
26.3 Subject to Clauses 26.4 and 26.5:
(a) a notice which is delivered personally or posted shall be
deemed to be served, and shall take effect, at the time when
it is delivered;
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(b) a notice which is sent by telex or fax shall be deemed to be
served, and shall take effect, 2 hours after its transmission
is completed.
26.4 However, if under Clause 26.3 a notice would be deemed to be served:
(a) on a day which is not a business day in the place of receipt;
or
(b) on such a business day, but after 5 p.m. local time;
the notice shall (subject to Clause 26.5) be deemed to be served, and
shall take effect, at 9 a.m. on the next day which is such a business
day.
26.5 Clauses 26.3 and 26.4 do not apply if the recipient of a notice
notifies the sender within 2 hours after the time at which the notice would
otherwise be deemed to be served that the notice has been received in a form
which is illegible in a material respect.
26.6 Any notice under or in connection with a Finance Document shall be
in English.
26.7 In this Clause "notice" includes any demand, consent, authorisation,
approval, instruction, waiver or other communication.
27 THE SECURITY TRUSTEE
27.1 In this Clause the "Trust Property" means:
(a) all Security Interests and all rights granted to, or held or
exercisable by, the Security Trustee under or by virtue of
the Finance Documents, except rights clearly intended for the
sole benefit or protection of the Security Trustee;
(b) all moneys which are received or recovered by or on behalf of
the Security Trustee under or by virtue of any Security
Interest or right covered by paragraph (a) above, including
any moneys which are received or recovered by it as a result
of the enforcement or exercise by it of such a Security
Interest or right;
(c) all moneys and other assets which may accrue in respect of,
or be derived from, any moneys covered by paragraph (b)
above; and
(d) any rights or other assets which the Security Trustee, by
notice to the Lender, states shall be deemed to form part of
the Trust Property;
except any moneys which the Security Trustee has transferred to the
Lender or (being entitled to do so) has retained in accordance with
the following provisions of this Clause.
27.2 The Security Trustee shall:
(a) hold the Trust Property on trust for the Lender and the
Security Trustee; and
(b) deal with the Trust Property; in accordance with this Clause
and the other provisions of the Finance Documents.
27.3 Except as expressly stated to the contrary in any Finance Document,
any moneys which the Security Trustee receives or recovers and which are Trust
Property shall (without prejudice to the rights of the Security Trustee under
any Finance Document to credit any moneys received or recovered by it to any
suspense account) be transferred to the Lender for application in accordance
with Clauses 13 and 14.
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27.4 However, before transferring such moneys to the Lender, the Security
Trustee may deduct any sum then due and payable under this Agreement or any
other Finance Document to the Security Trustee or any receiver, agent or other
person appointed by it and retain that sum for itself or, as the case may
require, pay it to the other person to whom it is then due and payable; for
this purpose if the Security Trustee has become entitled to require a sum to be
paid to it on demand, that sum shall be treated as due and payable, even if no
demand has yet been served.
27.5 In addition to its rights under or by virtue of this Agreement
and the Finance Documents, the Security Trustee shall have all of the rights
conferred on a trustee by the Trustee Xxx 0000 and any other applicable law for
the time being in force.
27.6 The duties of the Security Trustee are limited to those expressly
set out in this Agreement and the Finance Documents; and the Lender waives any
additional or more extensive fiduciary or other obligation which the Security
Trustee might otherwise have by virtue of its position or its designation as
trustee.
27.7 Subject to the provisions of the Finance Documents:
(a) the Security Trustee shall act in connection with the Finance
Documents in accordance with the written instructions of the
Lender; but
(b) in the absence of any such instructions, the Security
Trustee shall not be obliged to act.
27.8 The Security Trustee shall not have any obligation to request the
Lender to give it any instructions or to make any determination.
27.9 The Security Trustee cannot be required by the Lender:
(a) to commence, join in or defend any form of legal proceeding
or to take or participate in any other action which it
considers will or may expose it to any liability (whether for
expenses or otherwise) unless it has first received a letter
of credit in such amount and terms and from such a bank as it
may require; or
(b) to take or participate in any action which the Security
Trustee considers is or may be contrary to any Finance
Document or unlawful or contrary to or inconsistent with any
official requirement or the policy of any authority which
regulates or supervises any activity of the Security Trustee
or the Lender.
27.10 Any action which the Security Trustee takes or purports to take on
behalf of the Lender at a time when it had not been authorised to do so shall,
if subsequently ratified, be as valid as regards the Borrower, the Security
Parties and the Lender as if the Security Trustee had been expressly authorised
in advance.
27.11 The Security Trustee shall not have or incur any obligation or
to the Lender, the Borrower or any Security Party except those expressly
specified in the Finance Documents; and no term shall be implied into any
Finance Document to the effect that the Security Trustee has such an obligation
or responsibility.
27.12 The Security Trustee shall not be liable to the Borrower, any
Security Party or the Lender for any loss or expense attributable to any action
taken or omitted to be taken by the Security Trustee, or any of its officers,
employees or agents under or in connection with any Finance Document unless the
loss or expense is shown to have been caused directly and mainly by the gross
and culpable negligence or the dishonesty of the Security Trustee's own
officers or employees; and neither the Borrower, nor any Security Party nor the
Lender shall make any claim against an officer, employee or agent of the
Security Trustee in respect of such a loss or expense unless he is shown to
have acted dishonestly.
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27.13 The Security Trustee shall have no responsibility to keep under
review or to report to the Lender about:
(a) the financial position or the affairs of the Borrower, any
Security Party or any other person; or
(b) the accuracy of any representation, warranty or statement
made (or deemed to be repeated), or any information provided
(whether before the date of this Agreement or otherwise), by
the Borrower or any Security Party in or in connection with
any Finance Document; or
(c) the title, value or any other matter relating to, any asset
covered or proposed to be covered by a Security Interest
created by a Finance Document; or
(d) whether any Event of Default or Potential Event of Default
has occurred.
27.14 The Security Trustee shall not be treated as having knowledge, or
any form of notice, of:
(a) an Event of Default or a Potential Event of Default; or
(b) any other event or matter which is relevant to any Finance
Document;
until the Event of Default or Potential Event of Default or (as the
case may require) the other event or matter concerned has been
specifically brought to the attention of the officers of the Security
Trustee who have direct responsibility for the carrying out of the
Security Trustee's functions under the Finance Documents and so
brought to their attention specifically for the purposes of the
Finance Documents.
27.15 The Security Trustee shall not be responsible to the Lender for:
(a) any breach by the Borrower or a Security Party of any Finance
Document; or
(b) the business merits of the terms of any Finance Document; or
(c) ensuring and preserving the validity or enforceability of
any Finance Document or the validity, enforceability or
priority of any Security Interest created or purportedly
created by a Finance Document.
27.16 The Security Trustee may:
(a) engage lawyers, accountants and other experts, and rely on
their advice;
(b) rely on any communication or document, including any Transfer
Certificate, which it believes to be genuine and correct and
to have been communicated, sent or signed by (or with the
authority of) the person by whom (or on whose behalf) it
purports to be communicated, sent or signed; and
(c) perform all or any of its functions under this Agreement and
the other Finance Documents through any office or branch of
the Security Trustee which it may from time to time select
and notify to the other parties or through any kind of agent
and, in particular, by power of attorney or otherwise
delegate the exercise of any of its powers and discretions
under the Finance Documents to any person on such terms (as
to duration, sub-delegation, remuneration, exoneration and
otherwise) as the Security Trustee may consider appropriate.
27.17 The Security Trustee shall be fully entitled, without liability to
account or disclose to the Lender, to enter into:
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(a) banking, investment and/or other transactions of every kind
with the Borrower or any Security Party (including, but not
limited to, any interest or currency swap or other
transaction, whether related to this Agreement or not, and
acting as syndicate agent and/or security trustee for, and/or
participating in, other facilities to the Borrower or a
Security Party), and
(b) transactions relating, or dealings in, to any securities
issued or to be issued by the Borrower or any Security Party;
as though the Security Trustee were not a trustee of the Lender;
and, in particular, the Security Trustee:
(i) shall have no obligation to make available to the
Lender any information which it acquires in
connection with any such transaction or to use such
information for the benefit of the Lender or for the
purposes of any Finance Document; and
(ii) shall be fully entitled to act or refrain from
acting in relation to any such transaction having
exclusive regard to its own best interests.
27.18 At the end of the Security Period, the Security Trustee shall release,
without any covenants for title or other recourse whatsoever, all the Security
Interests created by the Finance Documents, whereupon the Security Trustee
shall be discharged from all liabilities and obligations which it has under
this Agreement and the other Finance Documents.
27.19 The trusts hereby constituted are governed by English law, and the
applicable perpetuity period is 75 years commencing on the date of this
Agreement.
27.20 In this Clause "right" includes any power, discretion or remedy.
28 SUPPLEMENTAL
28.1 The rights and remedies which the Finance Documents give to the
Lender and the Security Trustee are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and
specifically states so, be taken to exclude or limit any
right or remedy conferred by any law.
28.2 If any provision of a Finance Document is or subsequently becomes
void, unenforceable or illegal, that shall not affect the validity,
enforceability or legality of the other provisions of that Finance Document or
of the provisions of any other Finance Document.
28.3 A Finance Document may be executed in any number of counterparts.
29 LAW AND JURISDICTION
29.1 This Agreement is governed by and construed in accordance with
English law.
29.2 Without prejudice to Clause 29.3, the courts of England shall have
exclusive jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement.
29.3 However, Clause 29.2 is for the exclusive benefit of the Lender,
which reserves the right to (a) commence proceedings in respect of any matter
which arises out of or in connection with this Agreement in the courts of any
country other than England and which have or claim jurisdiction in
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38
relation to that matter, and (b) to commence such proceedings in the courts of
any such country or countries concurrently with or in addition to proceedings
in England or without commencing proceedings in England.
29.4 The Borrower waives any objection on the ground of inconvenient
forum to any proceedings which relate to this Agreement being brought:
(a) in the courts of England; and
(b) in any other courts by virtue of Clause 29.3.
29.5 Nothing in this Clause 29 shall exclude or limit any right which
the Lender may have (whether under the law of any country, an international
convention or otherwise) with regard to the bringing of proceedings, the
service of process, the recognition or enforcement of a judgment or any similar
or related matter in any jurisdiction.
29.6 If the Lender commences proceedings in connection with a Finance
Document, that shall not preclude it from commencing proceedings (whether
concurrently or not) with respect to that or any other Finance Document in
another jurisdiction.
29.7 In this Clause 29, "proceedings" means proceedings of any kind,
including an application for a provisional or protective measure.
AS WITNESS the hands of the duly authorised officers or attorneys of the
parties the day and year first before written.
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SCHEDULE 1
DRAWDOWN NOTICE
To: Christiania Bank og Kreditkasse
X.X. Xxx 0000 Xxxxxxx
0000 Xxxx
Attention: Loans Administration [ ], 1997
DRAWDOWN NOTICE
1. We refer to the loan agreement (the "Loan Agreement") dated
1997 and made between ourselves, as Borrower, and yourselves, as
Lender and Security Trustee, in connection with a facility of up to
L.27,565,000. Terms defined in the Loan Agreement have their defined
meanings when used in this Drawdown Notice.
2. We request to borrow as follows:-
(a) Amount: L.[ ];
(b) Drawdown Date: [ ];
(c) Duration of the first Interest Period shall be [ ]
months;
(d) Payment instructions : account in our name and numbered [
] with [ ] of [ ].
3. We represent and warrant that:
(a) the representations and warranties in Clause 9 of the Loan
Agreement would remain true and not misleading if repeated
on the date of this notice with reference to the
circumstances now existing;
(b) no Event of Default or Potential Event of Default has
occurred or will result from the borrowing of the Loan.
[Name of Signatory]
Director
for and on behalf of
Gulf Offshore N.S. Limited
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SCHEDULE 2
CONDITION PRECEDENT DOCUMENTS
PART I
The following are the documents referred to in Clause 8.1 in relation to the
first Advance.
1. A duly executed original of each Finance Document (except those
relating to the Newbuilding) and of each document required to be
delivered by each such Finance Document, including (but without
limitation) all notices of assignment, acknowledgements and letters
of undertaking required by the Deeds of Covenant.
2. Copies of the certificate of incorporation and constitutional
documents of the Borrower and each Security Party.
3. Copies of resolutions of the directors of the Borrower and each
Security Party authorising the execution of each of the Finance
Documents to which the Borrower or that Security Party is a party
and, in the case of the Borrower, authorising named officers to give
the Drawdown Notices and other notices under this Agreement and
ratifying the execution of the Building Contract.
4. The original of any power of attorney under which any Finance
Document is executed on behalf of the Borrower or a Security Party.
5. Copies of all official consents which the Borrower or any Security
Party requires to enter into, or make any payment under, any Finance
Document or the Building Contract.
6. The originals of any mandates or other documents required in
connection with the opening or operation of the Earnings Account.
7. The audited (or, in the case of GOMI, unaudited) consolidated
accounts of the Borrower and each Guarantor for the year ended 31st
December, 1996.
8. A copy of the Building Contract.
9. Documentary evidence that each Ship (other than the Newbuilding):
(a) is definitively and permanently registered in the name of
the Borrower under British flag at the port of London, save
that "Highland Warrior" is registered at the port of
Xxxxxxxx, Bermuda;
(b) is in the absolute and unencumbered ownership of the
Borrower save as contemplated by the Finance Documents;
(c) maintains the class + 1A1 with Det norske Veritas, save that
"Highland Legend" maintains the class +100A1 offshore supply
ship +LMC + UMS with Lloyds Register, free of all
recommendations and qualifications of such Classification
Societies;
(d) the Mortgage on her has been duly registered against that
Ship as a valid first priority ship mortgage in accordance
with the laws of England;
(e) is insured in accordance with the provisions of the Deed of
Covenant and all requirements therein in respect of
insurances have been complied with; and
(f) is managed by an Approved Manager on terms acceptable to the
Lender, together with a letter or letters of undertaking
executed by the Approved Manager
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in favour of the Security Trustee in the terms required by
the Security Trustee agreeing certain matters in relation to
the management of the Ships (or any of them) and
subordinating the rights of the Approved Manager against the
Ships (or any of them) and the Borrower to the rights of the
Lender and the Security Trustee under the Finance Documents.
10. Favourable legal opinions from lawyers appointed by the Lender on
such matters concerning the laws of Panama and Bermuda and such other
relevant jurisdictions as the Lender may require.
Each of the documents specified in paragraphs 2, 3, 5 and 8 above and every
other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of
the Borrower.
PART II
The following are the documents referred to in Clause 8.1 in relation to the
second Advance.
1. A duly executed original of each Finance Document relating to the
Newbuilding and of each document required to be delivered by each
such Finance Document, including (but without limitation) all notices
of assignment, acknowledgements and letters of undertaking required
by the Deed of Covenant.
2. A certificate signed by a director or the secretary of the Borrower
that there has been no revocation of or change to any of the
Documents specified in paragraphs 2, 3 and 5 of Part I and each of
them remains in full force and effect.
3. Documentary evidence that the Newbuilding:
(a) is definitively and permanently registered in the name of
the Borrower under British flag;
(b) is in the absolute and unencumbered ownership of the
Borrower save as contemplated by the Finance Documents;
(c) maintains the class + 1A1 with Det norske Veritas free of
all recommendations and qualifications of such Classification
Society;
(d) the Mortgage on her has been duly registered against that
Ship as a valid first priority ship mortgage in accordance
with the laws of England;
(e) is insured in accordance with the provisions of the Deed of
Covenant and all requirements therein in respect of
insurances have been complied with; and
(f) is managed by an Approved Manager from the second Drawdown
Date on terms acceptable to the Lender, together with a
letter or letters of undertaking executed by the Approved
Manager in favour of the Security Trustee in the terms
required by the Security Trustee agreeing certain matters in
relation to the management of the Newbuilding and
subordinating the rights of the Approved Manager against the
Newbuilding and the Borrower to the rights of the Lender and
the Security Trustee under the Finance Documents.
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SCHEDULE 3
TRANSFER CERTIFICATE
The Transferor and the Transferee accept exclusive responsibility for ensuring
that this Certificate and the transaction to which it relates comply with all
legal and regulatory requirements applicable to them respectively.
To: Christiania Bank og Kreditkasse ASA for itself, as Security Trustee,
and for and on behalf of the Borrower and each Security Party as
defined in the Loan Agreement referred to below.
[ ], 1997
1. This Certificate relates to a Loan Agreement ("the "Agreement") dated
[ ], 1997 and made between (1) Gulf Offshore N.S. Limited
(the "Borrower") and (2) Christiania Bank og Kreditkasse ASA as
Lender and Security Trustee for a loan facility of L.27,565,000.
2. In this Certificate:
"the Relevant Parties" means the Borrower, each Security Party, the
Security Trustee and [the] [each] Lender;
"the Transferor" means [full name] of [lending office];
"the Transferee" means [full name] of [lending office].
Terms defined in the Loan Agreement shall, unless the contrary
intention appears, have the same meanings when used in this
Certificate.
3. The effective date of this Certificate is .........19. , provided
that this Certificate shall not come into effect unless it is signed
by the Security Trustee on or before that date.
4. The Transferor assigns to the Transferee absolutely all rights and
interests (present, future or contingent) which the Transferor has as
Lender under or by virtue of the Loan Agreement and every other
Finance Document [in relation to [ ] per cent. of the Loan.].
5. By virtue of this Transfer Certificate and Clause 27 of the Loan
Agreement, the Transferor is discharged [entirely from its
obligations under the Loan Agreement] [from [ ] per cent. of its
obligations under the Loan Agreement, which percentage represents L.[
]].
6. The Transferee undertakes with the Transferor and each of the
Relevant Parties that the Transferee will observe and perform all the
obligations under the Finance Documents which Clause 27 of the Loan
Agreement provides will become binding on it upon this Certificate
taking effect.
7. The Security Trustee, at the request of the Transferee (which request
is hereby made) accepts, for the Security Trustee itself and for and
on behalf of every other Relevant Party, this Certificate as a
Transfer Certificate taking effect in accordance with Clause 27 of
the Loan Agreement.
8. The Transferor:
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(a) warrants to the Transferee and each Relevant Party (i) that
the Transferor has full capacity to enter into this
transaction and has taken all corporate action and obtained
all official consents which are in connection with this
transaction; and (ii) that this Certificate is valid and
binding as regards the Transferor;
(b) warrants to the Transferee that the Transferor is absolutely
entitled, free of encumbrances, to all the rights and
interests covered by the assignment in paragraph 2 above;
(b) undertakes with the Transferee that the Transferor will, at
its own expense, execute any documents which the Transferee
reasonably requests for perfecting in any relevant
jurisdiction the Transferee's title under this Transfer
Certificate or for a similar purpose.
9. The Transferee:
(a) confirms that it has received a copy of the Loan Agreement;
(b) agrees that it will have no rights of recourse on any ground
against either the Transferor, the Security Trustee or [the]
[any] Lender in the event that (i) the Finance Documents
prove to be invalid or ineffective, (ii) the Borrower or any
Security Party fails to observe or perform its obligations,
or to discharge its liabilities, under the Finance Documents
(iii) it proves impossible to realise any asset covered by a
Security Interest created by a Finance Document, or the
proceeds of such assets are insufficient to discharge the
liabilities of the Borrower or any Security Party under the
Finance Documents;
(c) agrees that it will have no rights of recourse on any ground
against the Security Trustee or [the] [any] Lender in the
event that this Certificate proves to be invalid or
ineffective;
(d) warrants to the Transferor and each Relevant Party (i) that
it has full capacity to enter into this transaction and has
taken all corporate action and obtained all official
consents which it needs to take or obtain in connection with
this transaction; and (ii) that this Certificate is valid
and binding as regards the Transferee; and
(e) confirms the accuracy of the administrative details set out
below regarding the Transferee.
10. The Transferor and the Transferee each undertake with the Security
Trustee severally, on demand, fully to indemnify the Security Trustee
in respect of any claim, proceeding, liability or expense (including
all legal expenses) which it may incur in connection with this
Certificate or any matter arising out of it, except such as are shown
to have been mainly and directly caused by the gross and culpable
negligence or dishonesty of the Security Trustee's own officers or
employees.
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[Name of Transferor] [Name of Transferee]
By: By:
Date: Date:
SECURITY AGENT
Signed for itself and for and on behalf of itself
as Security Trustee and for every other Relevant Party
Christiania Bank og Kreditkasse ASA
By:
Date:
ADMINISTRATIVE DETAILS OF TRANSFEREE
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:
Note: This Transfer Certificate alone may not be sufficient to transfer a
proportionate share of the Transferor's interest in the security
constituted by the Finance Documents in the Transferor's or
Transferee's jurisdiction. It is the responsibility of each Lender
to ascertain whether any other documents are required for this
purpose.
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SCHEDULE 4
COMPLIANCE CERTIFICATE
Christiania Bank og Kreditkasse ASA Date, , 1997
X.X. Xxx 0000 Xxxxxxx
0000 Xxxx Xxxxxx
Att: E. Xxxxxxxx Aalby
COMPLIANCE CERTIFICATE
Please accept this letter as certification that as of [date]*, Gulf Offshore
N.S. Limited was in compliance with all of the covenants stipulated in Clause
11.4 of the loan agreement dated [ ], 1997 between ourselves
and Christiania Bank og Kreditkasse. With regards to the covenants in Clause
11.4:-
1. The Company had L.[ ] in Liquid Assets as of [
]*;
2. The Company's Value Adjusted Equity as of [ ]* was L.[
];
3. The Company's Value Adjusted Total Assets as of [ ]*
was L.[ ], (based on the following vessel valuations):- [
]
4. The Book Equity of Gulf Offshore Marine International, Inc. as of [
]*, was USD[ ].
Regards,
Gulf Offshore N.S. Limited
* The quarter end for which compliance is being certified.
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EXECUTION PAGE
SIGNED by /s/ XXXXX X. XXXXXXXX )
)
for and on behalf of )
GULF OFFSHORE N.S. )
LIMITED in the presence of:- )
SIGNED by /s/ XXXXXXXX AALBY )
/s/ XXX X. XXXXXX )
)
for and on behalf of )
CHRISTIANIA BANK OG )
KREDITKASSE ASA as Lender and )
Security Trustee in the )
presence of:- )
/s/ XXXXX XXXXXXXXX
43
