USD 8,000,000 TERM Loan facilitY Agreement
SCHEDULES
1 Conditions
Precedent
2 Form
of
Drawdown Notice
3 Form
of
Selection Notice
4 Form
of
Compliance Certificate
5
Form of
Guarantee
THIS
TERM LOAN AGREEMENT is
dated
5 September 2006 and made between:
(1)
|
Seapowet
Trading Ltd.,
of Xxxxxxxx Islands with its business address at 0xx
Xxxxx Xxx Xx Xxxxx, 14 Par La Ville Road, Xxxxxxxx XX 08 Bermuda
as
borrower (the “Borrower”);
and
|
(2) Nordea
Bank Norge ASA
of
Xxxxxxxxxxxxxxx 00, X-0000 Xxxx, Xxxxxx, organisation number 911 044 110, as
lender (the “Lender”).
IT
IS AGREED
as
follows:
1 |
DEFINITIONS
AND INTERPRETATION
|
1.1 |
Definitions
|
In
this
Agreement, unless the context otherwise requires:
“Accounts”
means
account no. 0053601102 in the name of the Borrower with Nordea Bank Finland
plc,
London Branch or any such other accounts of the Borrower with the Lender and/or
Nordea Bank Finland Plc. London Branch, pledged in favour of the Lender under
the Account Charge.
“Account
Charge”
means
the account charge collateral to this Agreement for the first priority charge
over the Accounts to be made between the Borrower and the Lender as security
for
the Borrower’s obligations under the Finance Documents, in form and substance
acceptable to the Lender.
“Agreement”
means
this term loan facility agreement, as it may be amended, supplemented and varied
from time to time, including its Schedules.
“Availability
Period”
means
the period from and including the date of this Agreement to and including 30
September 2006.
“Available
Commitment”
means
the Commitment less the amount of the outstanding Loan.
“Break
Costs”
means
the amount (if any) by which:
a) |
the
interest which the Lender should have received for the period from
the
date of receipt of all or part of its participation in the Loan or
Unpaid
Sum to the last day of the current Interest Period in respect of
the Loan
or Unpaid Sum, had the principal amount or Unpaid Sum been paid on
the
last day of that Interest Period;
exceeds
|
b) |
the
amount which the Lender would be able to obtain by placing an amount
equal
to the principal amount or Unpaid Sum received by it on deposit with
a
leading bank in the relevant interbank market for a period starting
on the
Business Day following receipt or recovery and ending on the last
day of
the current Interest Period.
|
“Business
Day”
means
a
day (other than a Saturday or Sunday) on which banks are open for business
in
Oslo, New York and London (or any other relevant place of payment under Clause
25 (Payment mechanics).
“Cash
and Cash Equivalents”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Charterparty”
means
the bareboat charterparty made between the Company (as charterer) and the Owning
Company (as owner) of 22 June 1990 and as amended, under which the Company
has a
purchase option for the purchase of the Vessel, in form and substance as
approved by the Lender.
“Company“
means
Xxxxxx OBO II Inc. of 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx.
“Company
Shares”
means
fifty per cent (50.00%) of the shares in the Company which was acquired by
the
Borrower under the Share Purchase Agreement.
“Commitment”
means
USD 8,000,000 at the date of this Agreement to the extent not cancelled or
reduced.
“Compliance
Certificate”
means
a
certificate substantially in the form as set out in Schedule
4
(Form of
Compliance Certificate).
“Default”
means
an Event of Default or any event or circumstance specified in Clause 23 (Events
of Default) which would (with the expiry of a grace period, the giving of
notice, the making of any determination under the Finance Documents or any
combination of any of the foregoing) be an Event of Default.
“DOC”
means
in relation to the technical manager of the Vessel a valid document of
compliance issued to such technical manager pursuant to paragraph 13.2 of the
ISM Code.
“Drawdown”
means
the utilisation under the Facility.
“Drawdown
Date”
means
the Business Day on which the Borrower has requested the Drawdown pursuant
to
this Agreement or, as the context requires, the date on which the Loan is
actually made.
“Drawdown
Notice”
means
the notice substantially in the form set out in Schedule
2
(Form of
Drawdown Notice).
“EBITDA”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Environmental
Approval”
means
any permit, licence, consent, approval and other authorisations and the filing
of any notification, report or assessment required under any Environmental
Law
for the operation of the Vessel.
“Environmental
Claim”
means
any claim, proceeding or investigation by any party in respect of any
Environmental Law or Environmental Approval.
“Environmental
Law”
means
any applicable law, regulation, convention or treaty in any jurisdiction in
which any of the Company and/or the Owning Company conduct business which
relates to the pollution or protection of the environment or to the carriage
of
material which is capable of polluting the environment.
“Event
of Default”
means
any event or circumstance specified as such in Clause 23 (Events of
Default).
“FA
Act”
means
the Norwegian Financial Agreements Act of 25 June 1999 no. 46 (as
amended).
“Facility”
means
the term loan facility made available under this Agreement as described in
Clause 2.1 (The Facility).
“Final
Maturity Date”
means
the date falling four (4) years after the Drawdown Date.
“Finance
Documents”
means
this Agreement, the Security Documents and 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 to
the
Lender under this Agreement or any of the other documents referred to herein
or
therein.
“Financial
Indebtedness”
means
any obligation (whether incurred as principal or as surety) for the payment
or
repayment of money, whether present or future, actual or
contingent.
“Fixed
Charges”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“GAAP”
means
the generally accepted accounting principles in the United States (as the case
may be).
“Group”
means
the Guarantor and its Subsidiaries from time to time.
“Guarantee”
means
the Guarantee and Indemnity issued by the Guarantor in favour of the Lender
guaranteeing the obligations of the Borrower under this Agreement and in the
form as set out in Schedule
5
(Form of
Guarantee).
“Guarantor”
means
B
+ H Ocean Carriers Ltd. of 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx
“Insurances”
means,
in relation to the Vessel, all policies and contracts of insurance (which
expression includes all entries of the Vessel in a protection and indemnity
or
war risk association) which are from time to time during the Security Period
in
place or taken out or entered into by or for the benefit of any of the Company
and/or the Owning Company (whether in the sole name of the Company or in the
joint names of the Company and any other person) in respect of the Vessel or
otherwise in connection with the Vessel and all benefits thereunder (including
claims of whatsoever nature and return of premiums).
“Interest
Payment Date”
means
the last Business Day of each Interest Period.
“Interest
Period”
means,
in relation to the Loan, each of the successive periods determined in accordance
with Clause 9.1 (Selection of Interest Periods), and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 8.3 (Default interest).
“ISM
Code”
means
the International Safety Management Code for the Safe Operation of Ships and
for
Pollution Prevent.
“ISPS
Code”
means
the International Ship and Port Facility Security (ISPS) Code as adopted by
the
International Maritime Organization’s (IMO) Diplomatic Conference of December
2002.
“LIBOR”
means
in relation to the Loan:
a) |
the
rate per annum equal to the offered quotation for deposits in USD
for the
relevant Interest Period ascertained by the Lender to be the rate
as
displayed on the Reuters' screen, page LIBOR01, at or about 11:00
hours
(London time) on the applicable Quotation Day;
or
|
b) |
if
no such rate is available, the arithmetic means of the rate per annum
at
which the Lender is able to acquire USD in the amount and for the
relevant
Interest Period of the Loan in the London interbank market at or
about
11:00 hours (London time) on the applicable Quotation Day, as (in
the
absence of manifest error) conclusively certified by the Lender to
the
Borrower.
|
“Loan”
means
a
loan made or to be made under the Facility or the principal amount outstanding
for the time being of the loan.
“Margin”
means
one point seventy-five per cent (1.75%) per annum.
“Market
Value”
means
the fair market value of the Vessel in USD, being the average of valuations
of
the Vessel obtained from two (2) brokers approved by the Lender, with or without
physical inspection of the Vessel (as the Lender may require) on the basis
of a
sale for prompt delivery for cash at arm’s length on normal commercial terms as
between a willing buyer and seller, on an “as is, where is” basis, free of any
existing charter or other contract of employment and/or pool arrangement.
“Material
Adverse Effect”
means
a
material adverse effect on:
a) |
the
business, operation, assets or condition (financial or otherwise)
of the
Borrower, the Guarantor and/or the Company (as the case may be);
or
|
b) |
the
ability of the Borrower and/or the Guarantor to perform any of their
obligations under the Finance Documents;
or
|
c) |
the
rights or remedies of the Lender under the Finance
Documents.
|
“Measurement
Period”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Net
Interest”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“NIS”
means
the Norwegian International Ship Register.
“Original
Financial Statements”
means
the unaudited consolidated financial statements of the Guarantor and the
Borrower for the year ended 31 December 2005.
“Owning
Company”
means
K/S Difko LXXIII of Denmark, being the owner of the Vessel.
“Party”
means
a
party to this Agreement (including its successors and permitted transferees).
“Quarter
Date”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Quotation
Day”
means
the day occurring two (2) Business Days prior to the commencement of an Interest
Period.
“Security
Documents”
means
all or any security documents as may be entered into from time to time pursuant
to Clause 17 (Security).
“Security
Interest”
means
any mortgage, charge (whether fixed or floating), encumbrance, pledge, lien,
assignment by way of security, finance lease, sale and repurchase or sale and
leaseback arrangement, sale of receivables on a recourse basis or other security
interest or any other agreement or arrangement having the effect of conferring
security.
“Security
Period”
means
the period commencing on the Drawdown Date hereunder and ending the date on
which the Lender notifies the Borrower that:
a) |
all
amounts which have become due for payment by the Borrower or any
other
party under the Finance Documents have been
paid;
|
b) |
no
amount is owing or has accrued (without yet having become due for
payment)
under any of the Finance Documents;
|
c) |
the
Borrower has no future or contingent liability under any provision
of this
Agreement or the other Finance Documents;
and
|
d) |
the
Lender does not consider that there is a significant risk that any
payment
or transaction under a Finance Document would be set aside, or would
have
to be reversed or adjusted, in any present or possible future proceeding
relating to a Finance Document or any asset covered (or previously
covered) by a Security Interest created by a Finance
Document.
|
“Selection
Notice”
means
a
notice substantially in the form set forth in Schedule
3
(Form of
Selection Notice) given in accordance with Clause 9.1 (Selection of Interest
Periods).
“Seller”
means
Tschudi Rederi AS, being the seller of the Company Shares under the Share
Purchase Agreement.
“Share
Pledge Agreement”
means
the share pledge agreement collateral hereto to be made between the Borrower
and
the Lender for the first priority pledge over the Company Shares and any right
to receive dividends in favour of the Lender, in form and substance satisfactory
to the Lender.
“Share
Purchase Agreement”
means
the agreement entered into between the Borrower and the Seller for the purchase
by the Borrower of the Company Shares.
“SMC”
means
a
valid safety management certificate issued for the Vessel pursuant to paragraph
13.7 of the ISM Code.
“SMS”
means
a
safety management system for the Vessel developed and implemented in accordance
with the ISM Code and including the functional requirements duties and
obligations that follow from the ISM Code.
“Subsidiaries”
means
any business entity of which more than fifty per cent (50.00%) of the
outstanding voting stock or other equity interest is owned directly of
indirectly by such person and/or one or more other Subsidiaries of such
person.
“Swap
Agreement”
means
any interest rate swap agreement or agreements, hereunder any ISDA Master
Agreement and scheduled thereto, to be made between the Borrower and Nordea
Bank
Finland Plc. (as swap bank) in relation to the Facility.
“Tax
on Overall Net Income”
means
a
Tax imposed on the Lender by the jurisdiction under the laws of which it is
incorporated, or in which it is located or treated as resident for tax purposes,
on:
a) |
the
net income, profits or gains of the Lender world wide; or
|
b) |
such
of the net income, profits or gains of the Lender as are considered
to
arise in or relate to or are taxable in that
jurisdiction.
|
“Taxes”
means
all present and future taxes, levies, imposts, duties, charges, fees, deductions
and withholdings, and any restrictions and or conditions resulting in a charge
together with interest thereon and penalties in respect thereof and
“tax”
and
“taxation”
shall
be construed accordingly.
“Total
Debt”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Total
Loss”
means:
a) |
the
actual, constructive, compromised, agreed, arranged or other total
loss of
the Vessel;
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b) |
any
expropriation, confiscation, requisition or acquisition of the Vessel,
whether for full consideration, a consideration less than its proper
value, a nominal consideration or without any consideration, which
is
effected by any government or official authority or by any person
or
persons claiming to be or to represent a governmental or official
authority (excluding a requisition for hire for a fixed period not
exceeding one (1) year without any right to extension) unless it
is within
one (1) month from the Total Loss Date redelivered to the full control
of
the Owning Company; and
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c) |
any
arrest, capture, seizure or detention of the Vessel (including any
hijacking or theft) unless it is within one (1) month from the Total
Loss
Date redelivered to the full control of the Owning
Company.
|
“Total
Loss Date”
means:
a) |
in
the case of an actual total loss of the Vessel, the date on which
it
occurred or, if that is unknown, the date when the Vessel was last
heard
of;
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b) |
in
the case of a constructive, compromised, agreed or arranged total
loss of
the Vessel, the earlier of: (i) the date on which a notice of abandonment
is given to the insurers (provided a claim for total loss is admitted
by
such insurers) or, if such insurers do not forthwith admit such a
claim,
at the date at which either a total loss is subsequently admitted
by the
insurers or a total loss is subsequently adjudged by a competent
court of
law or arbitration panel to have occurred or, if earlier, the date
falling
six (6) months after notice of abandonment of the Vessel was given
to the
insurers; and (ii) the date of compromise, arrangement or agreement
made
by or on behalf of the Owning Company with the Vessel’s insurers in which
the insurers agree to treat the Vessel as a total loss;
or
|
c) |
in
the case of any other type of total loss, on the date (or the most
likely
date) on which it appears to the Lender that the event constituting
the
total loss occurred.
|
“Transaction
Documents”
means
the Finance Documents, the Charterparty and the Share Purchase Agreement,
together with the other documents contemplated herein or therein.
“Unpaid
Sum”
means
any sum due and payable but unpaid by the Borrower and/or the Guarantor under
the Finance Documents.
“USD”
means
United States Dollars, being the lawful currency of the United States of
America.
“Value Adjusted
Equity”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Value
Adjusted Equity Ratio”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“Value
Adjusted Total Assets”
has
the
meaning given to that term in Clause 20.1 (Financial definitions).
“VAT”
means
value added tax and any other tax of similar nature.
“Vessel”
means
M/V “Sibotessa”, a 75,000 dwt OBO tanker built in Denmark in 1992, with IMO
number 9012729, registered in the name of the Owner in NIS and later to be
registered in the Bahamas.
1.2 |
Construction
|
In
this
Agreement, unless the context otherwise requires:
a) |
Clause
and Schedule headings are for ease of reference
only;
|
b) |
words
denoting the singular number shall include the plural and vice
versa;
|
c) |
references
to Clauses and Schedules are references, respectively, to the Clauses
and
Schedules of this Agreement;
|
d) |
references
to a provision of law is a reference to that provision as it may
be
amended or re-enacted, and to any regulations made by the appropriate
authority pursuant to such law;
|
e) |
references
to “control”
means the power to appoint a majority of the board of directors or
to
direct the management and policies of an entity, whether through
the
ownership of voting capital, by contract or
otherwise;
|
f) |
references
to “indebtedness”
includes any obligation (whether incurred as principal or as surety)
for
the payment or repayment of money, whether present or future, actual
or
contingent; and
|
g) |
references
to a “person”
shall include any individual, firm, partnership, joint venture, company,
corporation, trust, fund, body, corporate, unincorporated body of
persons,
or any state or any agency of a state or association (whether or
not
having separate legal personality).
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2 |
THE
FACILITY
|
Subject
to the terms of this Agreement, the Lender makes available to the Borrower
a
term loan facility up to an aggregate amount not exceeding the Commitments.
3 |
PURPOSE
|
3.1 |
Purpose
|
The
Borrower shall apply all amounts borrowed by it towards:
a) |
partly
refinancing the purchase price paid by it for the Company Shares
under the
Share Purchase Agreement; and
|
b) |
payment
of fees and expenses incurred in connection with the
Facility.
|
3.2 |
Monitoring
|
Without
prejudice to the obligations of the Borrower under this Clause 3, the Lender
is
not bound to monitor or verify the application of any amount borrowed pursuant
to this Agreement.
4 |
CONDITIONS
PRECEDENT
|
4.1 |
Initial
conditions precedent
|
The
Borrower may not deliver the Drawdown Notice unless the Lender has received
originals or certified copies of all of the documents and other evidence listed
in Schedule
1
(Conditions precedent) in form and substance satisfactory to the Lender. The
Lender shall notify the Borrower upon being so satisfied.
4.2 |
Further
conditions precedent
|
The
Lender will only be obliged to pay the Loan to the Borrower if on the date
of
the Drawdown Notice and on the proposed Drawdown Date:
a) |
no
Default is continuing or would result from the proposed Loan;
and
|
b) |
the
representations and warranties contained in Clause 18 (Representations
and
warranties) deemed to be repeated on those dates are true and correct
in
all respects.
|
4.3 |
Maximum
number of drawings
|
Only
one
Drawing may be made hereunder.
4.4 |
Waiver
of conditions precedent
|
The
conditions specified in this Clause 4 are solely for the benefit of the Lender
and may be waived in whole or in part and with or without conditions by the
Lender.
5 |
DRAWDOWN
|
5.1 |
Delivery
of the Drawdown Notice
|
The
Borrower may utilise the Facility by delivering to the Lender the duly completed
Drawdown Notice no later than 10:00 hours (London time) three (3) Business
Days
prior to the proposed Drawdown Date.
5.2 |
Completion
of the Drawdown Notice
|
The
Drawdown Notice is irrevocable and will not be regarded as having been duly
completed unless:
a) |
it
is substantially in the form set out in Schedule
2
(Form of Drawdown Notice);
|
b) |
the
proposed Drawdown Date is a Business Day within the Availability
Period;
|
c) |
the
currency specified is USD and the amount of the proposed Loan is
an amount
which is not more than the Commitments;
and
|
d) |
the
proposed Interest Period complies with Clause 9 (Interest
Periods).
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5.3 |
Availability
|
Any
amount of the Commitments not utilised by the expiry of the Availability Period
shall automatically be cancelled at close of business in Oslo on such
date.
6 |
REPAYMENT
|
a) |
The
Borrower shall repay the Loan in sixteen (16) quarterly consecutive
instalments, each being in an amount of USD 500,000, the first instalment
falling due three (3) months after the Drawdown Date.
|
b) |
On
the Final Maturity Date the Borrower shall repay all amounts then
outstanding under this Agreement in full, together with all other
sums due
and outstanding under the Finance Documents at such date (if
any).
|
7 |
PREPAYMENT
AND CANCELLATION
|
7.1 |
Mandatory
prepayment
- Total Loss or sale of the
Vessel
|
If
the
Vessel is sold or becomes a Total Loss, the Borrower shall be obliged to prepay
the Loan:
a) |
in
case of a sale, on or before the date on which the sale is completed
by
delivery of the Vessel to the buyer;
or
|
b) |
in
the case of a Total Loss, on the earlier of the date falling ninety
(90)
days after the Total Loss Date (or in the event of a requisition
for title
of the Vessel, immediately upon receipt of the requisition proceeds
relating to such requisition of
title).
|
7.2 |
Mandatory
prepayment - sale of the Company
Shares
|
If
any of
the Company Shares are sold, the Borrower shall be obliged to prepay the Loan
on
or before the date on which the sale is completed by delivery of the relevant
Company Shares to the buyer.
7.3 |
Mandatory
prepayment - illegality
|
If
it
becomes unlawful in any applicable jurisdiction for the Lender to perform any
of
its obligations as contemplated by this Agreement or to fund or maintain its
participation in the Loan:
a) |
the
Lender shall promptly notify the Borrower (specifying the obligations
the
performance of which is thereby rendered unlawful and the law giving
rise
to the same);
|
b) |
upon
the Lender notifying the Borrower, the Commitments will be immediately
cancelled; and
|
c) |
the
Borrower shall prepay the Loan on the last day of the Interest Period
occurring after the Lender has notified the Borrower or, if earlier,
the
date specified by the Lender in the notice delivered to the Borrower
(being no earlier than the last day of any applicable grace period
permitted by law).
|
7.4 |
Voluntary
prepayment
|
The
Borrower may, if it gives the Lender not less than fourteen (14) days prior
written notice, prepay the whole or any part of the Loan.
7.5 |
Voluntary
cancellation
|
The
Borrower may, if it gives the Lender not less than fourteen (14) days’ (or such
shorter period as the Lender may agree) prior notice, cancel the whole or any
part of the Facility.
7.6 |
Terms
and conditions for prepayments and
cancellation
|
7.6.1 |
Irrevocable
notice
|
Any
notice of prepayment or cancellation by the Borrower under this Clause 7 shall
be irrevocable and, unless a contrary indication appears in this Agreement,
shall specify the date upon which the prepayment or cancellation is to be
made.
7.6.2 |
Additional
payments
|
Any
prepayment under this Agreement shall be made together with accrued interest
on
the amount prepaid and, subject to any Break Costs, without premium or
penalty.
7.6.3 |
Time
of prepayment and cancellation
|
The
Borrower shall not repay or prepay all or any part of the Loan or cancel all
or
any part of the Commitments except at the times and in the manner expressly
provided for in this Agreement.
7.6.4 |
No
reinstatement
|
No
amount
of the Commitments cancelled under this Agreement may subsequently be
reinstated.
7.6.5 |
Application
|
Any
amount prepaid shall be applied against the remaining instalments as set out
in
Clause 6.1 (Repayment) in inverse order of maturity.
8 |
INTEREST
|
8.1 |
Calculation
of interest
|
The
rate
of interest for the Loan for each Interest Period is the percentage rate per
annum which is the aggregate of:
a) |
the
Margin; and
|
b) |
LIBOR.
|
Effective
interest pursuant to the Norwegian Financial Agreement Act 1999 has been
calculated by the Borrower as set out in a separate notice from the Lender
to
the Borrower.
8.2 |
Payment
of interest
|
The
Borrower shall pay accrued interest on the Loan on each Interest Payment Date
(and if the Interest Period is longer than three (3) months, on the date falling
at three (3) monthly intervals after the first day of the Interest Period).
8.3 |
Default
interest
|
If
the
Borrower fails to pay any amount payable by it under the Finance Documents
on
its due date, interest shall accrue on the overdue amount from the due date
and
up to the date of actual payment (both before and after judgment) at a rate
determined by the Lender to be two per cent (2.00%) higher than the rate which
would have been payable if the overdue amount had, during the period of
non-payment, constituted the Loan in the currency of the overdue amount for
successive Interest Periods, each of a duration selected by the Lender (acting
reasonably). Any interest accruing under this Clause 8.3 shall be immediately
payable by the Borrower on demand by the Lender. Default interest (if unpaid)
arising on an overdue amount will be compounded with the overdue amount at
the
end of each Interest Period applicable to that overdue amount but will remain
immediately due and payable.
8.4 |
Notification
of rates of interest
|
The
Lender shall promptly notify the Borrower of the determination of a rate of
interest under this Agreement.
9 |
INTEREST
PERIODS
|
9.1 |
Selection
of Interest Periods
|
a) |
The
Borrower may select an Interest Period for the Loan in the Drawdown
Notice
or (if the Loan has already been borrowed) in a Selection
Notice.
|
b) |
Each
Selection Notice is irrevocable and must be received by the Lender
not
later than 11:00 hours (London time) two (2) Business Day before
the
Quotation Day for that Interest
Period.
|
c) |
If
the Borrower fails to deliver a Selection Notice to the Lender in
accordance with litra b) above, the relevant Interest Period will
be three
(3) months.
|
d) |
The
Borrower may select an Interest Period of three (3) or six (6) months
or
any such other period agreed between the Borrower and the Lender.
|
e) |
An
Interest Period for the Loan shall not extend beyond the Final Maturity
Date, but shall be shortened so that it ends on the Final Maturity
Date.
|
f) |
Each
Interest Period for the Loan shall start on the Drawdown Date or
(if
already made) on the last day of its preceding Interest
Period.
|
9.2 |
Non-Business
Day
|
If
an
Interest Period would otherwise end on a day which is not a Business Day, that
Interest Period will instead end on the next Business Day in that calendar
month
(if there is one) or the preceding Business Day (if there is not).
9.3 |
Notification
of Interest Periods
|
The
Lender will notify the Borrower of the Interest Periods determined in accordance
with this Clause 9.
10 |
CHANGES
TO THE CALCULATION OF INTEREST
|
10.1 |
Market
disruption
|
a) |
If
a Market Disruption Event occurs in relation to the Loan for any
Interest
Period, then the rate of interest on the Loan for the Interest Period
shall be the rate per annum which is the sum of:
|
(i) |
the
Margin; and
|
(ii) |
the
rate that which expresses as a percentage rate per annum the cost
to the
Lender of funding the Loan from whatever source it may reasonably
select.
|
b) |
In
this Agreement, “Market
Disruption Event”
means:
|
(i) |
at
or about 11:00 hours (London time) on the Quotation Day for the relevant
Interest Period LIBOR is not available;
or
|
(ii) |
before
close of business in London on the Quotation Day for the relevant
Interest
Period, the cost to the Lender of obtaining matching deposits in
the
London interbank market would be in excess of
LIBOR.
|
10.2 |
Alternative
basis of interest or
funding
|
If
a
Market Disruption Event occurs and the Lender or the Borrower so require, the
Lender and the Borrower shall enter into negotiations (for a period of not
more
than thirty (30) days) with a view to agreeing a substitute basis for
determining the rate of interest.
10.3 |
Break
Costs
|
The
Borrower shall, within three (3) Business Days of demand by the Lender, pay
to
the Lender its Break Cost attributable to all or any part of the Loan or Unpaid
Sum being paid by the Borrower on a day other than the last day of an Interest
Period for the Loan or Unpaid Sum.
Each
Lender shall, as soon as reasonably practicable after a demand, provide a
certificate confirming the amount of its Break Cost for any Interest Period
in
which they accrue.
11 |
FEES
|
11.1 |
Arrangement
fee
|
The
Borrower shall pay to the Lender an arrangement fee of zero point seventy-five
per cent (0.75%) of the Commitment, payable on the Drawdown Date.
11.2 |
Commitment
Fee
|
The
Borrower shall pay to the Lender a commitment fee of one per cent (1.00%) per
annum on the Available Commitment accruing from 7 July 2006 and up to the
Drawdown Date, and in any event payable quarterly in arrears.
12 |
TAX
GROSS-UP AND INDEMNITIES
|
12.1 |
Taxes
|
12.1.1 |
No
withholding
|
All
payments by the Borrower under the Finance Documents shall be made free and
clear of and without deduction or withholding for or on account of any Tax
or
any other governmental or public payment imposed by the laws of any jurisdiction
from which or through which such payment is made, unless a Tax deduction or
withholding is required by law.
12.1.2 |
Tax
gross-up
|
a) |
The
Borrower shall promptly upon becoming aware that any of them must
make a
Tax deduction or withholding (or that there is any change in the
rate or
the basis of a Tax deduction or withholding) notify the Lender
accordingly. Similarly, the Lender shall notify the Borrower on becoming
so aware in respect of a payment payable to the
Lender.
|
b) |
If
a Tax deduction or withholding is required by law to be made by the
Borrower:
|
(i) |
the
amount of the payment due from the Borrower shall be increased to
an
amount which (after making any Tax deduction or withholding) leaves
an
amount equal to the payment which would have been due if no Tax deduction
or withholding had been required;
and
|
(ii) |
the
Borrower shall make that Tax deduction or withholding within the
time
allowed and in the minimum amount required by
law.
|
c) |
Within
thirty (30) days of making either a Tax deduction or withholding
or any
payment required in connection with that Tax deduction or withholding,
the
Borrower shall deliver to the Lender evidence reasonably satisfactory
to
the Lender that the Tax deduction or withholding has been made or
(as
applicable) any appropriate payment paid to the relevant taxing authority.
|
12.2 |
Tax
indemnity
|
The
Borrower shall (within three (3) Business Days of demand by the Lender) pay
to
the Lender an amount equal to the loss, liability or cost which the Lender
determines will be or has been (directly or indirectly) suffered for or on
account of any Tax in respect of a Finance Document, save for any Tax on Overall
Net Income assessed on the Lender or to the extent such loss, liability or
cost
is compensated under Clause 12.1 (Tax gross-up).
12.3 |
VAT
|
All
amounts set out, or expressed to be payable under a Finance Document by any
Party to a Finance Document shall be deemed to be exclusive of any VAT. If
VAT
is chargeable, the Borrower shall pay to the Lender an amount equal to such
VAT.
13 |
INCREASED
COSTS
|
13.1 |
Increased
Costs
|
a) |
The
Borrower shall, upon demand from the Lender, pay the amount of any
Increased Cost incurred by the Lender or any of its affiliates as
a result
of (i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation (including
any
laws and regulations implementing new or modified capital adequacy
requirements) or (ii) compliance with any law or regulation made
after the
date of this Agreement.
|
b) |
In
this Agreement, the term “Increased
Costs”
means:
|
(i) |
a
reduction in the rate of return from the Facility or on the Lender’s (or
its affiliate’s) overall capital;
|
(ii) |
an
additional or increased cost; or
|
(iii) |
a
reduction of any amount due and payable under any Finance Document,
|
which
is
incurred or suffered by the Lender or any of its affiliates to the extent that
it is attributable to the Lender having entered into the Commitments or funding
or performing its obligations under any Finance Document.
13.2 |
Exceptions
|
Clause
13.1 (Increased Costs) does not apply to the extent any Increased Cost
is:
a) |
attributable
to a Tax deduction or withholding required by law to be made by the
Borrower;
|
b) |
compensated
for by Clause 12.1 (Tax gross-up) or Clause 12.2 (Tax Indemnity);
or
|
c) |
attributable
to the wilful breach by the Lender or its affiliates of any law or
regulation.
|
14 |
OTHER
INDEMNITIES
|
14.1 |
Currency
indemnity
|
a) |
If
any sum due from the Borrower under the Finance Documents (a “Sum”),
or any order, judgement or award given or made in relation to a Sum,
has
to be converted from the currency (the “First
Currency”)
in which that Sum is payable into another currency (the “Second
Currency”)
for the purpose of:
|
(i) |
making
or filing a claim or proof against the
Borrower;
|
(ii) |
obtaining
or enforcing an order, judgement or award in relation to any litigation
or
arbitration proceedings,
|
the
Borrower shall as an independent obligation, within three (3) Business Days
of
demand, indemnify the Lender against any cost, loss or liability arising out
of
or as a result of the conversion including any discrepancy between (A) the
rate
of exchange used to convert that Sum from the First Currency into the Second
Currency and (B) the rate or rates of exchange available to that person at
the
time of its receipt of that Sum.
b) |
The
Borrower waives any right it may have in any jurisdiction to pay
any
amount under the Finance Documents in a currency or currency unit
other
than that in which it is expressed to be payable.
|
14.2 |
Other
indemnities
|
The
Borrower shall within three (3) Business Days of demand, indemnify the Lender
against any costs, loss or liability incurred by the Lender as a result
of:
a) |
the
occurrence of any Event of Default;
|
b) |
a
failure by the Borrower to pay any amount due under the Finance Documents
on its due date;
|
c) |
the
funding, or making arrangements to fund, the Loan requested by the
Borrower in the Drawdown Notice but not made by reason of the operation
of
any one or more of the provisions of this Agreement (other than by
reason
of default or negligence by the Lender); or
|
d) |
the
Loan (or part of the Loan) not being prepaid in accordance with a
notice
of prepayment given by the Borrower.
|
14.3 |
Indemnity
to the Lender
|
The
Borrower shall promptly indemnify the Lender against any cost, loss or liability
incurred by the Lender (acting reasonably) as a result of:
a) |
investigating
any event which it reasonably believes is a possible Event of Default;
or
|
b) |
acting
or verifying any notice, request or instruction which it reasonably
believes to be genuine, correct or appropriately
authorised.
|
15 |
MITIGATION
BY THE LENDER
|
15.1 |
Mitigation
|
Without
in any way limiting the obligations of the Borrower hereunder, the Lender shall,
in consultation with the Borrower, take all reasonable steps for a period of
fifteen (15) Business Days) to mitigate any circumstances which arise and which
would result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of:
a) |
Clause
7.1 (Mandatory prepayment - Total Loss or sale - the
Vessel);
|
b) |
Clause
7.2 (Mandatory prepayment - sale of Company
Shares);
|
c) |
Clause
7.3 (Mandatory prepayment -
Illegality);
|
d) |
Clause
12 (Tax gross-up and indemnities); and
|
e) |
Clause
13 (Increased Costs),
|
including
(but not limited to) transferring its rights and obligations under the Finance
Documents to another affiliate.
The
Lender Party is not obliged to take any steps under this Clause 15.1 if, in
the
opinion of the Lender (acting reasonably), to do so might be prejudicial to
it.
15.2 |
Indemnity
|
The
Borrower shall indemnify the Lender for all costs and expenses reasonably
incurred by the Lender as a result of steps taken by it under Clause 15.1
(Mitigation).
16 |
COSTS
AND EXPENSES
|
16.1 |
Transaction
expenses
|
The
Borrower shall promptly on demand pay to the Lender the amount of all costs
and
expenses (including legal fees) reasonably incurred by it in connection with
the
negotiation, preparation, printing, perfection, execution and registration
of:
a) |
this
Agreement and any other documents referred to in this Agreement;
and
|
b) |
any
other Finance Documents executed after the date of this Agreement.
|
16.2 |
Amendment
and enforcement costs, etc
|
The
Borrower shall, within three (3) Business Days of demand, reimburse the Lender
for the amount of all costs and expenses (including legal fees) reasonably
incurred by it in connection with:
a) |
the
granting of any release, waiver or consent under the Finance
Documents;
|
b) |
any
amendment or variation of any of the Finance Documents;
and
|
c) |
the
preservation, protection, enforcement or maintenance of, or attempt
to
preserve or enforce, any of the rights of the Lender under the Finance
Documents.
|
17 |
SECURITY
|
17.1 |
Security
|
The
Borrower’s obligations and liabilities under the Finance Documents and any Swap
Agreement(s), including (without limitation) the Borrower’s obligation to repay
the Loan together with all unpaid interest, default interest, commissions,
charges, expenses and any other derived liability whatsoever of the Borrower
towards the Lender in connection with this Agreement and any Swap Agreement(s),
shall at any time until all amounts due to the Lender hereunder or any Swap
Agreement(s) have been paid and/or repaid in full, be secured by:
a) |
the
Share Pledge Agreement;
|
b) |
the
Account Charge; and
|
c) |
the
Guarantee
|
The
Borrower undertakes to ensure that the above Security Documents are being duly
executed by the parties thereto in favour of the Lender on or about the date
of
this Agreement, legally valid and in full force and effect, and to execute
or
procure the execution of such further documentation as the Lender may reasonable
require in order for the Lender to maintain the security position envisaged
hereunder.
17.2 |
Set-off
|
a) |
The
Lender may, to the extent permitted by applicable law, set off any
matured
obligation due from an Borrower under the Finance Documents, (and
to the
extent beneficially owned by the Lender) against any matured obligations
owed by the Lender to that Borrower, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations
are in
different currencies, the Lender may convert either obligation at
a market
rate of exchange in its usual course of business for the purpose
of the
set-off.
|
b) |
The
Borrower hereby agrees and accept that this Clause 17.2
shall constitute a waiver of the provisions of Section 29 of the
FA Act
and further agrees and accepts, to the extent permitted by law, that
Section 29 of the FA Act shall not apply to this
Agreement.
|
18 |
REPRESENTATIONS
AND WARRANTIES
|
The
Borrower represents and warrants to the Lender as follows:
18.1 |
Status
|
a) |
The
Borrower is a corporation, duly incorporated and validly existing
under
the laws of the Xxxxxxxx Islands and has the power to own its assets
and
carry on its business as it is currently being conducted. The Borrower
is
indirectly one hundred per cent (100.00%) owned by the
Guarantor.
|
b) |
The
Guarantor is a corporation, duly incorporated and validly existing
under
the laws of Liberia and has the power to own its assets and carry
on its
business as it is currently being
conducted.
|
18.2 |
Binding
obligations
|
The
Transaction Documents to which the Borrower and/or the Guarantor is a party
constitute legal, valid, binding and enforceable obligations, and save as
provided herein or therein and/or as have been or shall be completed prior
to
the Drawdown Date, no registration, filing, payment of tax or fees or other
formalities are necessary or desired to render the Transaction Documents
enforceable against the Borrower and/or the Guarantor.
18.3 |
No
conflict with other
obligations
|
The
entry
into and performance by the Borrower of, and the transactions contemplated
by,
the Transaction Documents do not and will not conflict with:
a) |
any
law or regulation or any order or decree of any governmental agency
or
court by which it is bound;
|
b) |
any
constitutional documents of the Borrower;
or
|
c) |
any
agreement or document to which it is a party or by which it or any
of its
assets are bound.
|
18.4 |
Power
and authority
|
The
Borrower and the Guarantor have the power to enter into, perform and deliver,
and have taken all necessary actions to authorise their entry into, performance
and delivery of, the Transaction Documents to which any of them is a party
and
the transactions contemplated by those Transaction Documents.
18.5 |
Authorisations
and consents
|
All
authorisations, approvals, consents and other matters, official or otherwise,
required by the Borrower in connection with the entering into, performance,
validity and enforceability of the Transaction Documents and the transactions
contemplated hereby and thereby have been obtained or effected and are in full
force and effect.
18.6 |
Taxes
|
The
Borrower has complied with all material taxation laws in all jurisdictions
where
it is subject to taxation and has paid all material Taxes and other amounts
due
to governments and other public bodies. No claims are being asserted against
it
with respect to any Taxes or other payments due to public or governmental
bodies. The Borrower is not required to make any withholdings or deductions
for
or on account of Tax from any payment it may make under any of the Finance
Documents.
18.7 |
No
Default
|
No
Event
of Default is continuing or might reasonably be expected to result from the
making of the Loan. No other event or circumstances is outstanding which
constitutes a default or (with the expiry of a grace period, giving of notice
or
the making of any determination or any combination of the foregoing) might
constitute a default under any other agreement or instrument which is binding
on
the Borrower or any of its Subsidiaries or to which the Borrower’s (or any of
its Subsidiaries’) assets are subject which might have a Material Adverse
Effect.
18.8 |
No
misleading information
|
Any
factual information, documents, exhibits or reports relating to the Borrower
and/or the Guarantor and which have been furnished to the Lender by or on behalf
of the Borrower are complete and correct in all material respects and do not
contain any misstatement of fact or omit to state a fact making such
information, exhibits or reports misleading in any material
respect.
18.9 |
Original
Financial Statements
|
a) |
Complete
and correct.
The Original Financial Statements fairly and accurately represent
the
assets, liabilities and the financial condition of the Guarantor
and the
Borrower and have been prepared in accordance with GAAP consistently
applied.
|
b) |
No
undisclosed liabilities.
As of the date of the Original Financial Statements, none of the
Borrower
or the Guarantor had any material liabilities, direct or indirect,
actual
or contingent, and there is no material, unrealised or anticipated
losses
from any unfavourable commitments not disclosed by or reserved against
in
the Original Financial Statements or in the notes
thereto.
|
c) |
No
material change.
Since the date of the Original Financial Statements, there has been
no
material adverse change in the business, operations, assets or condition
(financial or otherwise) of the Borrower and/or the
Guarantor.
|
18.10 |
Pari
passu ranking
|
The
Borrower’s and the Guarantor’s respective payment obligations under the Finance
Documents rank at least pari
passu
with the
claims of all their other unsecured and unsubordinated creditors, except for
obligations preferred by mandatory law applying to companies
generally.
18.11 |
No
proceedings pending or threatened
|
No
litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency, which if adversely determined, might in the reasonably
opinion of the Lender be expected to have a Material Adverse Effect, have (to
the best of the Borrower’s knowledge and belief) been started or threatened
against the Borrower and/or the Guarantor.
18.12 |
No
existing Security Interest
|
Save
as
described in Clause 17 (Security), no Security Interest exists over all or
any
of the present or future revenues or assets of the Borrower.
18.13 |
No
immunity
|
The
execution and delivery by the Borrower of each Transaction Document to which
it
is a party constitute, and its exercise of its rights and performance of its
obligations under each Transaction Document will constitute, private and
commercial acts performed for private and commercial purposes, and the Borrower
will not (except for bankruptcy or any similar proceedings) be entitled to
claim
for itself or any or all of its assets immunity from suit, execution, attachment
or other legal process in any other proceedings taken in Norway and/or the
Xxxxxxxx Islands and/or Liberia (as the case may be) in relation to any
Transaction Document.
18.14 |
No
winding-up
|
Neither
of the Borrower nor the Guarantor has taken any corporate action nor have any
other steps been taken or legal proceedings been started or threatened against
any of them for their reorganisation, winding-up, dissolution or administration
or for the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of any of them or any or all of their
assets.
18.15 |
Environmental
compliance
|
The
Borrower has performed and observed in all material respects all Environmental
Laws, Environmental Approvals and all other material covenants, conditions,
restrictions or agreements directly or indirectly concerned with any
contamination, pollution or waste or the release or discharge of any toxic
or
hazardous substance in connection with the Vessel.
18.16 |
Environmental
Claims
|
No
Environmental Claim has been commenced or (to the best of the Borrower’s
knowledge and belief) is threatened against the Borrower where that claim would
be reasonably likely, if adversely determined, to have a Material Adverse Effect
on the Borrower.
18.17 |
ISM
Code and ISPS Code
compliance
|
All
requirements of the ISM Code and the ISPS Code as they relate to the Owning
Company, the Company, any technical manager of the Vessel and the Vessel have
been complied with in all material respects.
18.18 |
The
Vessel
|
The
Vessel will on the Drawdown Date be:
a) |
in
the absolute ownership of the Owning Company and the Owning Company
will
be the sole, legal and beneficial owner of the
Vessel;
|
b) |
registered
in the name of the Owning Company in NIS or the Bahamas (or such
other
ship registry as approved by the Lender) under the laws and flag
of Norway
or the Bahamas (or under such other flag as approved by the
Lender);
|
c) |
operationally
seaworthy in every way and fit for service;
and
|
d) |
classed
with Det norske Veritas, free of all overdue requirements and
recommendations.
|
18.19 |
No
money laundering
|
The
Borrower is acting for its own account in relation to the Loan and in relation
to the performance and the discharge of its obligations and liabilities under
the Finance Documents and the transactions and other arrangements effected
or
contemplated by the Finance Documents to which the Borrower is a party, and
the
foregoing will not involve or lead to contravention of any law, official
requirement or other regulatory measure or procedure implemented to combat
money
laundering (as defined in Article 1 of the Directive (91/308/EEC) and Directive
2001/97 of the European Parliament and of 4 December 2001 amending Council
Directive 91/308).
18.20 |
Repetition
|
The
representations and warranties set out in this Clause 18 are deemed to be made
by the Borrower on the date of this Agreement and shall be deemed to be
repeated:
a) |
on
the date of the Drawdown Notice;
|
b) |
on
the Drawdown Date;
|
c) |
on
the first day of each Interest Period;
and
|
d) |
in
each Compliance Certificate forwarded to the Lender pursuant to Clause
19.2 (Compliance certificate) (or, if no such Compliance Certificate
is
forwarded, on each day such certificate should have been forwarded
to the
Lender at the latest).
|
19 |
INFORMATION
UNDERTAKINGS
|
The
Borrower gives the undertakings set out in this Clause 19 to the Lender and
such
undertakings shall remain in force throughout the Security Period.
19.1 |
Financial
statements
|
The
Borrower shall supply to the Lender:
a) |
as
soon as available, but no later than one hundred and twenty (120)
days
after the end of each of its fiscal years, complete copies of the
financial reports of the Borrower, all in reasonable detail, which
shall
include at least the balance sheet of the Borrower as of the end
of such
year and the related statements of income and sources and uses of
funds
for such year, all in reasonable detail, unaudited, but certified
to be
true and complete by the chief financial officer of the Guarantor;
|
b) |
as
soon as available, but not less than forty-five (45) days after the
end of
each of the first three (3) quarters of each fiscal year of the Borrower,
a quarterly interim balance sheet of the Borrower and the related
profit
and loss statements and sources and uses of funds, all in reasonable
detail, unaudited, but certified to be true and complete by the chief
financial officer of the Guarantor;
|
c) |
as
soon as available but not later than one hundred and twenty (120)
days
after the end of each fiscal year of the Guarantor, complete copies
of the
consolidated financial reports of the Guarantor and its Subsidiaries,
all
in reasonable detail, which shall include at least the consolidated
balance sheet of the Guarantor and its Subsidiaries as of the end
of such
year and the related consolidated statements of income and sources
and
uses of funds for such year, which shall be audited reports prepared
by an
accounting firm acceptable to the
Lender;
|
d) |
as
soon as available but not less than forty-five (45) days after the
end of
each of the first three (3) quarters of each fiscal year of the Guarantor,
a quarterly interim consolidated balance sheet of the Guarantor and
its
Subsidiaries and the related consolidated profit and loss statements
and
sources and uses of funds, all in reasonable detail, unaudited, but
certified to be true and complete by the chief financial officer
of the
Guarantor;
|
e) |
within
ten (10) days of the filing thereof, copies of all registration statements
and reports on Forms 20-F and 8-K (or their equivalent) and other
material
filings which the Guarantor shall have filed with the Securities
and
Exchange Commission or any similar governmental
authority;
|
f) |
promptly
upon the mailing thereof to the shareholders of the Guarantor, copies
of
all financial statements, reports, proxy statements and other
communications provided to the Guarantor’s
shareholders;
|
g) |
within
ten (10) days of the Borrower’s and/or the Guarantor’s receipt thereof,
copies of all audit letters or other correspondence from any external
auditors including material financial information in respect of the
Borrower and/or the Guarantor, as the case may be;
|
h) |
as
soon as available but not less than forty-five (45) days after the
end of
each of the quarters of each fiscal year of the Company, a quarterly
interim consolidated balance sheet of the Company and the related
consolidated profit and loss statements and sources and uses of funds,
all
in reasonable detail, unaudited, but certified to be true and complete;
and
|
i) |
such
other statements (including, without limitation, monthly consolidated
statements of operating revenues and expenses), lists of assets and
accounts, budgets, forecasts, reports and other financial information
with
respect to the Borrower’s business as the Lender may from time to time
reasonably request, certified to be true and complete by the chief
financial officer of the Guarantor.
|
19.2 |
Compliance
Certificate
|
The
Borrower shall supply to the Lender, with each set of financial statements
delivered on 30 June and 30 December pursuant to Clause 19.1 (Financial
statements), a Compliance Certificate signed by it and the chief financial
officer of the Guarantor setting out (in reasonable detail) computations as
to
compliance with Clause 20 (Financial covenants) as at the date at which those
financial statements were drawn up.
19.3 |
Requirements
as to financial statements
|
The
Borrower shall procure that each set of financial statements delivered pursuant
to Clause 19.1 (Financial statements) is prepared using GAAP, accounting
practices and financial reference periods consistent with those applied in
the
preparation of the Original Financial Statements for the Borrower and/or the
Guarantor unless, in relation to any set of financial statements, it and/or
the
Guarantor notifies the Lender that there has been a change in GAAP, the
accounting practices or reference periods and its or the Guarantor’s auditors
deliver to the Lender:
a) |
a
description of any change necessary for those financial statements
to
reflect GAAP, accounting practices and reference periods upon which
the
Borrower's and the Guarantor’s Original Financial Statements were
prepared; and
|
b) |
sufficient
information, in form and substance as may be reasonably required
by the
Lender, to enable it to determine whether Clause 20 (Financial covenants)
has been complied with and make an accurate comparison between the
financial position indicated in those financial statements and the
Borrower’s and the Guarantor’s Original Financial
Statements.
|
Any
reference in this Agreement to those financial statements shall be construed
as
a reference to those financial statements as adjusted to reflect the basis
upon
which the Original Financial Statements were prepared.
19.4 |
Information
- miscellaneous
|
The
Borrower shall notify the Lender:
a) |
all
material documents dispatched by the Borrower to its shareholders
or its
creditors generally and any press releases at the same time as they
are
dispatched;
|
b) |
promptly
upon becoming aware of them, the details of any litigation, arbitration
or
administrative proceedings which are current, threatened or pending
against the Borrower and/or the Guarantor and/or the Owning Company
and/or
the Company, and which might, if adversely determined, have a Material
Adverse Effect; and
|
c) |
promptly,
such further information regarding the business, assets and operations
(financial or otherwise) of the Borrower and/or the Guarantor and/or
the
Company as the Lender may reasonably
request.
|
19.5 |
Notification
of default
|
The
Borrower shall notify the Lender of any Default (and the steps, if any, being
taken to remedy it) promptly upon becoming aware of its occurrence.
19.6 |
Notification
of Environmental Claims
|
The
Borrower shall inform the Lender in writing as soon as reasonably practicable
upon becoming aware of the same:
a) |
if
any Environmental Claim has been commenced or (to the best of the
Borrower’s knowledge and belief) is threatened against the Company or the
Vessel; and
|
b) |
of
any fact and circumstances which will or are reasonably likely to
result
in any Environmental Claim being commenced or threatened against
the the
Company or the Vessel,
|
where
the
claim would be reasonably likely, if determined against the Company or the
Vessel, to have a Material Adverse Effect.
19.7 |
“Know
your customer”
requirements
|
The
Borrower must promptly on the request of the Lender supply to the Lender any
documentation or other evidence which is reasonably requested by the Lender
to
it to carry out and be satisfied it has complied with all necessary “know your
customer” or other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance Documents.
20 |
FINANCIAL
COVENANTS
|
20.1 |
Definitions
|
For
the
purposes of the financial covenants set out herein, the following definitions
shall apply:
a) |
“Cash
and Cash Equivalents”
means, in respect of the Group, and at any
time:
|
(i) |
cash
in hand or on deposits with any acceptable bank available for cash
management purposes;
|
(ii) |
investment
grade certificates or deposit or investment grade marketable debt
securities, maturing within one (1) year after the relevant date
of
calculation, issued by an acceptable bank;
or
|
(iii) |
any
other instrument, security or investment approved by the
Lender,
|
in
each
case, to with any member of the Group beneficially entitled at that time and
which is capable of being applied against Total Senior Debt,
b) |
“EBITDA”
means, always in accordance with GAAP, the aggregate of operating
profits
of the Borrower and the Guarantor (on a consolidated basis) for a
Measurement Period before Taxes, financial items, depreciations and
amortisations, excluding:
|
(i) |
the
profit or loss attributable to any extraordinary or exceptional items
or
any write-offs on investments during that Measurement Period; and
|
(ii) |
the
profit and loss arising on any disposal of fixed assets during that
Measurement Period save for any disposals made in the ordinary course
of
business.
|
c) |
“Fixed
Charges”
means:
|
(i) |
Net
Interest for any Measurement Period,
plus
|
(ii) |
the
amount of scheduled repayments of the Facility and/or any other credit
facilities and the interest and repayment element under capitalised
charterparties in accordance with GAAP which fall due for repayment
or
payment during the Measurement Period, other than any amount prepaid
under
this Agreement,
|
less
free
and available cash (at the relevant Quarter Date) and marketable securities
(acceptable to the Lender)) in excess of the minimum requirement plus any
dividends paid in such Measurement Period.
d) |
“Measurement
Period”
means a rolling period of twelve (12) calendar months ending on a
Quarter
Date.
|
e) |
“Quarter
Date”
means each 31 March, 30 June, 30 September and 31
December.
|
f) |
“Net
Interest”
means all interest, arrangement fees and capitalised commissions
and
periodic fees (whether, in each case, paid or payable) as reported
in
accordance with GAAP being incurred (after having deducted any interest,
arrangement fee and capitalised income earned) by the Borrower and
the
Guarantor (on a consolidated basis) during a Measurement Period.
|
g) |
“Total
Debt”
means, on a consolidated basis, the aggregate book value of all
provisions, other long term liabilities and current liabilities of
the
Borrower and the Guarantor (on a consolidated basis).
|
h) |
“Value
Adjusted Equity”
means Value Adjusted Total Assets less Total
Debt.
|
i) |
“Value
Adjusted Equity Ratio”
means Value Adjusted Equity divided by Value Adjusted Total
Assets.
|
j) |
“Value
Adjusted Total Assets”
means, on a consolidated basis, the total market value of all of
the
assets of the Guarantor (on a consolidated
basis).
|
20.2 |
Financial
covenants
|
20.2.1 |
Minimum
Value Adjusted Equity Ratio
|
The
Borrower shall procure that the Guarantor (on a consolidated basis) at all
times
during the Security Period shall maintain a minimum Value Adjusted Equity Ratio
of minimum thirty per cent (30.00%).
20.2.2 |
Minimum
Value Adjusted Equity
|
The
Borrower shall procure that the Guarantor (on a consolidated basis) at all
times
during the Security Period shall maintain a minimum Value Adjusted Equity of
USD
50,000,000.
20.2.3 |
Ratio
of EBITDA to Fixed Charges
|
The
Borrower shall procure that the Guarantor (on a consolidated basis) shall ensure
that the ratio of EBITDA to Fixed Charges shall be minimum one hundred and
twenty-five per cent (125.00%) on a twelve (12) months rolling basis on
assumptions approved by the Lender.
20.2.4 |
Positive
working capital
|
The
Borrower shall procure that the Guarantor (on a consolidated basis) at all
times
shall ensure that its current assets exceed its current liabilities (excluding
the portion of long term debt), all as determined in accordance with
GAAP.
20.2.5 |
Cash
and Cash Equivalents
|
The
Borrower shall procure that the Guarantor (on a consolidated basis) at all
times
shall ensure that it has Cash and Cash Equivalents equal to or greater than
(i)
USD 15,000,000 and (ii) six per cent (6.00%) of the long term debt of the
Guarantor.
20.2.6 |
Adjustments
|
a) |
The
Lender is aware that the Guarantor (on a consolidated basis) for
the
purpose of calculating the financial covenants under this Clause
20, will
have the right to adjust to the amounts booked as (i) average earnings
in
the profit and loss accounts and (ii) deferred income in the balance
sheet
related to the Charterparties for MV “Rip Hudner”, MV “Xxxxxx Xxxxxxxxx”
and MV “Searose G”, to ensure that the actual income under such
Charterparties is taken into consideration in
full.
|
b) |
If
there is any amendment(s) to the financial covenants relating to
the
Guarantor (on a consolidated basis) under the USD 202,000,000 reducing
revolving credit facility agreement dated 29 August 2006 and
made between
among others OBO Holdings Ltd., BHOBO One Ltd., BHOBO Two Ltd., BHOBO
Three Ltd., RMJ OBO Shipping Ltd. and Sagamore Shipping Ltd. (as
joint and
several borrowers) and the Lender (in its capacity as mandated lead
arranger, agent for a syndicate of banks and lender), the financial
amendments as set out in this Clause 20 shall be amended
accordingly.
|
21 |
GENERAL
UNDERTAKINGS
|
The
Borrower gives the undertakings set out in this Clause 21 to the Lender and
such
undertakings shall remain in force throughout the Security Period.
21.1 |
Authorisations
etc.
|
The
Borrower shall promptly:
a) |
obtain,
comply and do all that is necessary to maintain in full force and
effect;
and
|
b) |
supply
certified copies to the Lender (if so requested)
of,
|
any
authorisation, consent, approval, resolution, licence, exemption, filing,
notarisation or registration required under any law or regulation of its
jurisdiction of incorporation to enable it to perform its obligations under
the
Transaction Documents and to ensure the legality, validity, enforceability
or
admissibility in evidence in its jurisdiction of incorporation of any
Transaction Document.
21.2 |
Compliance
with laws
|
The
Borrower shall comply and shall procure the compliance by the Company in all
respects with all laws to which it may be subject, if failure so to comply
would
materially impair its ability to perform its obligations under the Transaction
Documents.
21.3 |
Pari
passu ranking
|
The
Borrower shall ensure that its and the Guarantor’s obligations under the Finance
Documents do and will rank at least pari
passu
with all
their other present and future unsecured and unsubordinated obligations, except
for those obligations which are preferred by mandatory law applying to companies
generally in the jurisdictions of their incorporation or in the jurisdiction
in
the ports of calls.
21.4 |
Title
|
The
Borrower shall procure that the Company shall use its best efforts (in its
capacity as bareboat charterer of the Vessel) to ensure that the Owning Company
holds legal title to and own the entire beneficial interest in the Vessel and
the Insurances, free of all Security Interest and other interests and rights
of
any kind, except for those created by the Financial Documents and as set out
in
Clause 21.5 (Negative pledge).
21.5 |
Negative
pledge
|
The
Borrower shall not create or permit to subsist any Security Interest over the
Vessel nor upon any of its present or future undertakings, property, assets,
rights or revenues, other than:
a) |
Security
Interest under the Security
Documents;
|
b) |
the
existing first priority mortgage in favour of Den Danske Skibskredit
and
the second priority mortgage in favour of the
Company;
|
c) |
Security
Interests arising in the ordinary course of business;
and
|
d) |
Security
Interests consented to in writing by the
Lender.
|
21.6 |
Borrowings
and guarantees
|
The
Borrower shall not and the Borrower shall procure that the Company shall not
enter into any new Financial Indebtedness or assume or grant any guarantee
liabilities, other than current liabilities related to the day to day operation
of the Vessel.
21.7 |
Disposals
|
The
Borrower shall not sell, transfer or otherwise dispose of any substantial part
of its assets without the prior written consent of the Lender.
21.8 |
Distributions
|
Provided
that the Borrower and the Guarantor are in compliance with the provisions of
the
Finance Documents to which they are respective parties (including, but not
limited to, the financial covenants set out in Clause 20 (Financial covenants))
both before and following such distributions, the Borrower may distribute
dividends and make other distributions in whatever form to its shareholder(s)
or
any other person(s) without the prior written consent of the
Lender.
21.9 |
Investment
restrictions
|
Provided
that the Borrower and the Guarantor are in compliance with the provisions of
the
Finance Documents (including, but not limited to, the financial covenants in
Clause 20 (Financial covenants)) both before and following such investments,
the
Borrower may make new investments without the prior written consent of the
Lender.
21.10 |
Bank
accounts
|
The
Borrower shall hold and maintain all its bank accounts (hereunder the Account)
with the Lender and/or Nordea Bank Finland Plc London Branch and ensure that
all
amounts payable to it are paid to the Account.
21.11 |
Shareholders
and change of control
|
The
Borrower shall and shall procure that its shareholder(s) do not agree to any
transfer of shares, the granting of options of ownership or change in ownership
of the Borrower without the prior written consent of the Lender.
21.12 |
Change
of business etc.
|
a) |
The
Borrower shall ensure that no change is made to the general nature
of the
business of the Borrower, and the Borrower shall procure that no
change is
made to the general nature of the business of the Company from that
carried out at the date of this Agreement (for the Company being
the
bareboat charterer of the Vessel).
|
b) |
The
Borrower shall not change its legal
name.
|
21.13 |
No
mergers etc.
|
The
Borrower shall not and shall procure that the Company shall not enter into
any
merger, amalgamation, de-merger, split-up, divest, consolidation with or into
any other person, be the subject of any reconstruction or change its type of
organization, jurisdiction of organization without the prior consent of the
Lender.
21.14 |
Environmental
compliance
|
The
Borrower shall comply and shall procure the compliance by the Company in all
material respects with all Environmental Laws subject to the terms and
conditions of any Environmental Approval and obtain and maintain any
Environmental Approval.
21.15 |
Commercial
management and technical
management
|
The
Borrower shall procure that B + H Management Ltd. shall continue to be
commercial manager and that Tesma Singapore Pte. Ltd. or B + H Management Ltd.
shall continue to be the technical manager of the Vessel and there shall be
no
change to such commercial or technical management without the prior written
consent of the Lender.
21.16 |
Transaction
Documents
|
The
Borrower shall procure that none of the Transaction Documents are amended (save
for immaterial amendments which will have no impact of the Borrower’s ability to
fulfil its obligations under the Finance Documents) or terminated, or any waiver
or any terms thereof are agreed thereunder without the prior written consent
of
the Lender.
22 |
VESSEL’S
COVENANTS
|
The
Borrower gives the undertakings set out in this Clause 22 to the Lender and
such
undertakings shall remain in force throughout the Security Period.
22.1 |
Insurance
|
a) |
The
Borrower shall ensure that the Vessel is insured against such risks,
including but not limited to, Hull and Machinery, Protection &
Indemnity (including maximum cover for pollution liability as normally
adopted by the industry for similar vessels), Hull Interest and/or
Freight
Interest, Loss of Hire and War Risk insurances, in such amounts,
on such
terms and with such insurers as the Lender shall
approve.
|
b) |
The
value of the Hull and Machinery insurance shall cover at least eighty
per
cent (80.00%) of the Market Value, and the aggregate insurance value
of
the Vessel (except Protection & Indemnity and Loss of Hire) shall be
at least equal to the higher of the Market Value and one hundred
and
twenty per cent (120.00%) of the
Loan.
|
22.2 |
Classification
and repairs
|
The
Borrower procure that the Company shall keep the Vessel in a good, safe and
efficient condition consistent with first class ownership and management
practice and in particular:
a) |
so
as to maintain its class at the highest level with Det norske Veritas
or
another classification society approved by the Lender, free of overdue
recommendations and qualifications;
and
|
b) |
so
as to comply with the laws and regulations (statutory or otherwise)
applicable to vessels registered under the flag state of the Vessel
or to
vessels trading to any jurisdiction to which the Vessel may trade
from
time to time.
|
22.3 |
Notification
of certain events
|
The
Borrower shall immediately notify the Lender of:
a) |
any
accident to the Vessel involving repairs where the costs will or
is likely
to exceed USD 500,000 (or the equivalent in any other
currency);
|
b) |
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not, or cannot be,
immediately complied with;
|
c) |
any
exercise or purported exercise of any lien on the Vessel or the
Insurances;
|
d) |
any
occurrence as a result of which the Vessel has become or is, by the
passing of time or otherwise, likely to become a Total Loss;
and
|
e) |
any
claim for a material breach of the ISM Code or the ISPS Code being
made
against the Borrower, the Company or otherwise in connection with
the
Vessel.
|
22.4 |
Operation
of the Vessel
|
a) |
The
Borrower shall procure the compliance in all material respects with
the
ISM Code and the ISPS Code, all Environmental Laws and all other
laws or
regulations relating to the Vessel, its ownership, operation and
management or to the business of the Company and shall procure that
the
Company employs the Vessel and allow its
employment:
|
(i) |
in
any manner contrary to law or regulation in any relevant jurisdiction
including but not limited to the ISM Code;
and
|
(ii) |
in
the event of hostilities in any part of the world (whether war is
declared
or not), in any zone which is declared a war zone by any government
or by
the war risk insurers of the Vessel unless the Company has (at its
expense) effected any special, additional or modified insurance cover
which shall be necessary or customary for first class shipowners
trading
vessels within the territorial waters of such country at such time
and has
provided evidence of such cover to the
Lender.
|
Without
limitation to the generality of this Clause 22.4, the Borrower shall procure
compliance, with, as applicable, all requirements of the International
Convention for the Safety of Life at Sea (SOLAS) 1974 as adopted, amended or
replaced from time to time including, but not limited to, the STCW 95, the
ISM
Code or the ISPS Code.
b) |
The
Vessel shall be employed under the
Charterparty.
|
22.5 |
ISM
Code compliance
|
The
Borrower will:
a) |
procure
that the Vessel remains subject to a SMS for the duration of the
Facility;
|
b) |
procure
that a valid and current SMC is maintained for the Vessel for the
duration
of the Facility;
|
c) |
procure
that any technical manager of the Vessel maintains a valid and current
DOC
for the duration of the Facility;
|
d) |
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel
or of
the DOC of the technical manager of the Vessel;
and
|
e) |
immediately
notify the Lender in writing of any “accident” or “major non-conformity”,
each as those terms is defined in the Guidelines in the application
of the
IMO International Safety Management Code issued by the International
Chamber of Shipping and International Shipping
Federation.
|
22.6 |
Inspections
and class records
|
a) |
The
Borrower shall procure that the Company and any charterers permit,
one
person appointed by the Lender to inspect the Vessel once a year
for the
account of the Borrower upon the Lender giving prior written
notice.
|
b) |
The
Borrower shall procure that the Company instructs the classification
society to send to the Lender, following a written request from the
Lender, copies of all class records held by the classification society
in
relation to the Vessel.
|
22.7 |
Surveys
|
The
Borrower shall cause the Vessel to be submitted to such periodic or other
surveys as may be required for classification purposes and to ensure full
compliance with regulations of the flag state of the Vessel and to supply or
to
cause to be supplied to the Lender copies of all survey reports and
confirmations of class issued in respect thereof whenever such is required
by
the Lender, however limited to once a year.
22.8 |
Arrest
|
The
Borrower shall procure that the Company promptly pay and discharge:
a) |
all
liabilities which give or may give rise to maritime or possessory
liens on
or claims enforceable against the Vessel or the
Insurances;
|
b) |
all
tolls, taxes, dues, fines, penalties and other amounts charged in
respect
of the Vessel or the Insurances;
and
|
c) |
all
other outgoings whatsoever in respect of the Vessel and the Insurances,
|
and
forthwith upon receiving a notice of arrest of the Vessel, or its detention
in
exercise or purported exercise of any lien or claim, the Borrower shall procure
that the Company or any charterer shall procure their release by providing
bail
or providing the provision of security or otherwise as the circumstances may
require.
22.9 |
Total
Loss
|
In
the
event that the Vessel shall suffer a Total Loss, the Borrower shall, within
a
period of ninety (90) days after the Total Loss Date, obtain and present to
the
Lender, a written confirmation from the relevant insurers that the claim
relating to the Total Loss has been accepted in full.
23 |
EVENTS
OF DEFAULT
|
Each
of
the events or circumstances set out in this Clause 23 is an Event of
Default.
23.1 |
Non-payment
|
The
Borrower do not pay on the due date any amount payable pursuant to a Finance
Document at the place and in the currency in which it is expressed to be payable
unless:
a) |
its
failure to pay is caused by administrative or technical error affecting
the transfer of funds despite timely payment instructions by the
Borrower;
and
|
b) |
payment
is made within three (3) Business Days of its due date.
|
23.2 |
Financial
covenants
|
Any
requirement in Clause 20 (Financial covenants) is not satisfied.
23.3 |
Other
obligations
|
a) |
The
Borrower do not comply with any provision of the Finance Documents
(other
than those referred to in Clause 23.1 (Non-payment) and Clause 23.2
(Financial covenants)).
|
b) |
No
Event of Default under litra a) above will occur if the failure to
comply
is capable of remedy and is remedied within thirty (30) days of the
Lender
giving notice to the Borrower or the Borrower becoming aware of the
failure to comply.
|
23.4 |
Misrepresentations
|
Any
representation or statement made or deemed to be made by the Borrower in the
Finance Documents or any other document delivered by or on behalf of the
Borrower under or in connection with any of the Finance Documents is or proves
to have been incorrect or misleading in any material respect when made or deemed
to be made.
23.5 |
Cross
default
|
a) |
Any
Financial Indebtedness of the Borrower and/or any member of the Group
and/or the Company is not paid when due nor within any originally
applicable grace period.
|
b) |
Any
Financial Indebtedness of the Borrower and/or any member of the Group
and/or the Company and/or the Owning Company is declared to be or
otherwise becomes due and payable prior to its specified maturity
as a
result of an event of default (however described).
|
c) |
Any
commitment for any Financial Indebtedness of the Borrower and/or
any
member of the Group and/or the Company and/or the Owning Company
is
cancelled or suspended by a creditor of the Borrower and/or any member
of
the Group and/or the Company and/or the Owning Company as a result
of an
event of default (however
described).
|
d) |
Any
creditor of the Borrower and/or any member of the Group and/or the
Company
and/or the Owning Company becomes entitled to declare any Financial
Indebtedness of the Borrower and/or any member of the Group and/or
the
Company and/or the Owning Company due and payable prior to its specified
maturity as a result of an event of default (however
described).
|
23.6 |
Insolvency
|
a) |
The
Borrower is unable or admits inability to pay its debts as they fall
due,
suspends making payments on any of its debts or, by reason of actual
or
anticipated financial difficulties, commences negotiations with one
or
more of its creditors with a view to rescheduling any of its
indebtedness.
|
b) |
The
value of the assets of the Borrower is less than its liabilities
(taking
into account contingent and prospective
liabilities).
|
c) |
A
moratorium is declared in respect of any indebtedness of the
Borrower.
|
23.7 |
Insolvency
proceedings
|
Any
corporate action, legal proceedings or other procedure or step is taken in
relation to:
a) |
the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary
arrangement, scheme or arrangement or otherwise) of the Borrower;
|
b) |
a
composition, compromise, assignment or arrangement with any creditor
of
the Borrower;
|
c) |
the
appointment of a liquidator, receiver, administrative receiver,
administrator or other similar officer in respect of the Borrower;
or
|
d) |
enforcement
of any Security Interest over any assets of the Borrower.
|
23.8 |
Creditor’s
process
|
Any
expropriation, attachment, sequestration, distress or execution affects any
asset or assets of the Borrower having an aggregate value of USD 100,000 and
is
not discharged within thirty (30) days.
23.9 |
Unlawfulness
|
It
is or
becomes unlawful for the Borrower to perform any of its obligations under the
Finance Documents.
23.10 |
Material
adverse change
|
Any
event
or series of events occur which, in the opinion of the Lender, might have a
Material Adverse Effect on the Borrower and/or any member of the Group and/or
the Owning Company and/or the Company.
23.11 |
Permits
|
Any
licence, consent, permission or approval required in order to enforce, complete
or perform any of the Transaction Documents is revoked, terminated or modified
having a Material Adverse Effect on the Borrower.
23.12 |
Litigation
|
There
is
current, pending or threatened any claims, litigation, arbitration or
administrative proceedings against the Borrower which might, if adversely
determined, have a Material Adverse Effect on the Borrower, the Owning Company
and/or the Company.
23.13 |
Charterparty
|
The
Charterparty has been amended without prior written consent of the
Agent.
23.14 |
Acceleration
|
Upon
the
occurrence of an Event of Default, the Lender may, and shall if so directed
by
the Lender, by written notice to the Borrower:
a) |
cancel
the Commitments whereupon they shall immediately be
cancelled;
|
b) |
declare
that all or part of the Loan together with accrued interest, and
all other
amounts accrued or outstanding under the Finance Documents, be either
immediately due and payable and/or payable upon demand, whereupon
they
shall become either immediately due and payable or payable on demand;
and/or
|
c) |
start
enforcement in respect of the Security Interests established by the
Security Documents; and/or
|
d) |
take
any other action, with or without notice to the Borrower, exercise
any
other right or pursue any other remedy conferred upon the Lender
by any of
the Finance Documents or by any applicable law or regulation or otherwise
as a consequence of such Event of
Default.
|
24 |
CHANGES
TO THE PARTIES
|
24.1 |
Assignments
and transfer by the
Borrower
|
The
Borrower may not assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
24.2 |
Assignment
and transfer by the Lender
|
The
Lender may at any time assign, transfer or have assumed its rights or
obligations under the Finance Documents with the prior consultation of the
Borrower.
25 |
PAYMENT
MECHANICS
|
25.1 |
Payments
to the Lender
|
All
payments by the Borrower under the Finance Documents shall be made:
a) |
to
the Lender to its account with such office or bank as the Lender
may from
time to time designate in writing to the Borrower for this purpose;
and
|
b) |
for
value on the due date at such times and in such funds as the Lender
may
specify to the Party concerned as being customary at the time for
settlement of transactions in the relevant currency in the place
of
payment.
|
25.2 |
Distributions
by the Lender
|
Each
payment received by the Lender under the Finance Documents for another Party
shall, subject to Clause 25.3 (Distributions to the Borrower) and 25.4
(Clawback), be made available by the Lender as soon as practicable after receipt
to the Party entitled to receive payment in accordance with this Agreement,
to
such account as that Party may notify to the Lender by not less than five (5)
Business Days’ notice.
25.3 |
Distributions
to the Borrower
|
The
Lender may (with the consent of the Borrower or in accordance with Clause 26
(Set-off)), apply any amount received by it for the Borrower in or towards
payment (on the date and in the currency and funds of receipt) of any amount
due
from the Borrower under the Finance Documents or in or towards purchase of
any
amount of currency to be so applied.
25.4 |
Clawback
|
a) |
Where
a sum is to be paid to the Lender under the Finance Documents for
distribution to another Party, the Lender is not obliged to pay that
sum
to that other Party until it has been able to establish to its
satisfaction that it has actually received that sum.
|
b) |
If
the Lender pays an amount to another Party and it proves to be the
case
that the Lender had not actually received that amount, then the Party
to
whom that amount was paid by the Lender shall on demand refund the
same
amount to the Lender, together with interest on that amount from
the date
of payment to the date of receipt by the Lender, calculated by the
Lender
to reflect its cost of funds.
|
25.5 |
Partial
payments
|
If
the
Lender receives a payment that is insufficient to discharge all the amounts
then
due and payable by the Borrower under the Finance Documents, the Lender shall
apply that payment towards the obligations of the Borrower under the Finance
Documents in the following order:
a) |
firstly,
in or towards payment pro rata of any unpaid fees, costs and expenses
of
the Lender under the Finance
Documents;
|
b) |
secondly,
in or towards payment pro rata of any accrued interest (including
default
interest), fee or commissions due but unpaid under this
Agreement;
|
c) |
thirdly,
in or towards payment pro rata of any principal due but unpaid under
this
Agreement; and
|
d) |
fourthly,
in or towards payment pro rata of any other sum due but unpaid under
the
Finance Documents.
|
25.6 |
No
set-off by the Borrower
|
All
payments to be made by the Borrower under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for) set-off
or counterclaim.
25.7 |
Payment
on non-Business Days
|
a) |
Any
payment which is due to be made on a day that is not a Business Day
shall
be made on the next Business Day in the same calendar month (if there
is
one) or the preceding Business Day (if there is not).
|
b) |
During
any extension of the due date for payment of any principal or Unpaid
Sum
under this Agreement interest is payable on the principal or Unpaid
Sum at
the rate payable on the original due
date.
|
25.8 |
Currency
of account
|
The
Borrower shall pay:
a) |
any
amount payable under this Agreement, except as otherwise provided
for
herein, in USD; and
|
b) |
all
payments of costs and Taxes in the currency in which the same were
incurred.
|
26 |
SET-OFF
|
The
Lender may, to the extent permitted by applicable law, set off any matured
obligation due from the Borrower under the Finance Documents (to the extent
beneficially owned by the Lender) against any matured obligations owed by the
Lender to the Borrower, regardless of the place of payment, booking branch
or
currency of either obligation. If the obligations are in different currencies,
the Lender may convert either obligation at a market rate of exchange in its
usual course of business for the purpose of the set-off.
27 |
NOTICES
|
27.1 |
Communication
in writing
|
Any
communication to be made under or in connection with the Finance Documents
shall
be made in writing and, unless otherwise stated, may be made by telefax or
letter. Any such notice or communication addressed as provided in Clause 27.2
(Addresses) will be deemed to be given or made as follows:
a) if
by
letter, when delivered at the address of the relevant Party;
b) if
by
telefax, when received.
However,
a notice given in accordance with the above but received on a day which is
not a
Business Day or after 16:00 hours in the place of receipt will only be deemed
to
be given at 9:00 hours on the next Business Day in that place.
27.2 |
Addresses
|
Any
communication or document to be made under or in connection with the Finance
Documents shall be made or delivered to the address and telefax number of each
Party and marked for the attention of the department or persons set out
below:
If
to the
Lender: Nordea
Bank Norge ASA
Att:
Shipping, Offshore and Oil Services
Middelthuns
gate 17
X.X.
Xxx
0000 Xxxxxxx
X-0000
Xxxx, Xxxxxx
Telefax
No: x00 00 00 00 00
If
to the
Borrower: c/o
B + M
Management Ltd.
Par-la-Ville
Place
00
Xxx-xx-Xxxxx Xxxx
Xxxxxxxx
XXXX
Xxxxxxx
Telefax
No: + 1 441 295 6796
or
any
substitute address and/or telefax number and/or marked for such other attention
as the Party may notify to the other Party by not less than five (5) Business
Days’ prior notice.
27.3 |
Language
|
Communication
to be given by one Party to another under the Finance Documents shall be given
in the English language or, if not in English and if so required by the Lender,
be accompanied by a certified English translation and, in this case, the English
translation shall prevail unless the document is a statutory or other official
document.
28 |
CALCULATIONS
|
All
sums
falling due by way of interest, fees and commissions under the Finance Documents
accrue from day-to-day and shall be calculated on the basis of the actual number
of days elapsed and a calendar year of 360 days and for the actual number of
days elapsed. The calculations made by the Lender of any interest rate or any
amount payable pursuant to this Agreement shall be conclusive and binding upon
the Borrower in the absence of any manifest error.
29 |
MISCELLANEOUS
|
29.1 |
Partial
invalidity
|
If,
at
any time, any provision of the Finance Documents is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither
the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provisions under any law of any
other jurisdiction will in any way be affected or impaired.
29.2 |
Remedies
and waivers
|
No
failure to exercise, nor any delay in exercising on the part of the Lender,
any
right or remedy under the Finance Documents shall operate as a waiver, nor
shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
29.3 |
Amendments
and waivers
|
Any
term
of the Finance Documents may be amended or waived only with the written consent
of the Lender and the Borrower.
29.4 |
Disclosure
of information and
confidentiality
|
The
Parties are obliged to keep confidential all information in respect of the
terms
and conditions of this Agreement. This confidentiality obligation shall not
apply to any information which:
a) |
is
publicised by a Party as required by applicable laws and regulations;
|
b) |
has
entered the public domain or is publicly known, provided that such
information is not made publicly known by the receiving Party of
such
information; or
|
c) |
was
or becomes, as the Party is able to demonstrate by supporting documents,
available to the such Party on a non-confidential basis prior to
the
disclosure thereof.
|
29.5 |
Conflicting
provisions
|
In
case
of conflict between this Agreement and the terms of any of the Security
Documents, the terms and conditions of this Agreement shall
prevail.
30 |
GOVERNING
LAW AND ENFORCEMENT
|
30.1 |
Governing
law
|
This
Agreement shall be governed by Norwegian law.
30.2 |
Jurisdiction
|
a) |
For
the benefit of the Lender, the Borrower agrees that the courts of
Oslo,
Norway, have jurisdiction to settle any disputes arising out of or
in
connection with the Finance Documents including a dispute regarding
the
existence, validity or termination of this Agreement, and the Borrower
accordingly submit to the non-exclusive jurisdiction of the Oslo
District
Court (Oslo tingrett).
|
b) |
Nothing
in this Clause 30.2 shall limit the right of the Lender to commence
proceedings against the Borrower in any other court of competent
jurisdiction. To the extent permitted by law, the Lender may take
concurrent proceedings in any number of
jurisdictions.
|
30.3 |
Service
of process
|
Without
prejudice to any other mode of service, the Borrower:
a) |
irrevocably
appoints Wikborg Rein & Co., Kronprinsesse Märthas xxxxx 1, X.X. Xxx
0000 Xxxx, X-0000 Xxxx, Xxxxxx as its agent for service of process
in
relation to any proceedings before Norwegian courts in connection
with any
Finance Document; and
|
b) |
agrees
that failure by its process agent to notify it of the process will
not
invalidate the proceedings
concerned.
|
*
*
*
SCHEDULE
1
CONDITIONS
PRECEDENT
1 |
CORPORATE
AUTHORISATION
|
1.1 |
In
respect of the Borrower:
|
a) |
Certificate
of Incorporation/Certificate of
Registration;
|
b) |
Memorandum
and Articles of
Association/Bye-laws;
|
c) |
Resolutions
passed at a board meeting of the Borrower
evidencing:
|
(i) |
the
approval of the terms of, and the transactions contemplated by, the
Transaction Documents; and
|
(ii) |
the
authorisation of its appropriate officer or officers or other
representatives to execute the Transaction Documents and any other
documents necessary for the transactions contemplated by the Transaction
Documents, on its behalf;
|
d) |
Power
of Attorney (notarised and legalised);
|
e) |
Updated
Good Standing Certificate/Certificate of Compliance;
|
f) |
Secretary’s
Certificate (notarised and legalised);
and
|
g) |
A
specimen of the signature of each person authorised by the resolution
referred to in paragraph c) above.
|
1.2 |
In
respect of the Guarantor
|
a) |
Certificate
of Incorporation/Certificate of
Registration;
|
b) |
Memorandum
and Articles of
Association/Bye-laws;
|
c) |
Resolutions
passed at a board meeting of the Guarantor
evidencing:
|
(i) |
the
approval of the terms of, and the transactions contemplated by, the
Transaction Documents; and
|
(ii) |
the
authorisation of its appropriate officer or officers or other
representatives to execute the Transaction Documents and any other
documents necessary for the transactions contemplated by the Transaction
Documents, on its behalf;
|
d) |
Power
of Attorney (notarised and legalised);
|
e) |
Updated
Good Standing Certificate/Certificate of Compliance;
|
f) |
Secretary’s
Certificate (notarised and legalised);
and
|
g) |
A
specimen of the signature of each person authorised by the resolution
referred to in paragraph c) above.
|
2 |
AUTHORISATIONS
|
All
approvals, authorisations and consents required by any government (domestic
and
foreign) or other authorities for the Borrower and/or the Company and/or the
Owning Company to enter into and perform their obligations under this Agreement
and/or any of the Transaction Documents have been obtained and are in full
force
and effect and all applicable waiting periods have expired without any action
being taken by any competent authority which, in the judgement of the Lender,
restraints, prevents or imposes materially adverse conditions upon the
consummation of this Agreement or the transactions referred to herein.
3 |
THE
VESSEL
|
a) |
Evidence
(by way of transcript of registry) that the Vessel is registered
in the
name of the Owning Company in the NIS (or such other ship registry
as
approved by the Lender) and that the Vessel is free of any mortgage
or
registered encumbrances, liens etc. save as set out in Clause 21.5
(Negative pledge);
|
b) |
An
updated class certificate related to the Vessel from the relevant
classification society, confirming that the Vessel is classed with
the
highest class in accordance with Clause 22.2 (Classification and
repairs),
free of extensions and overdue
recommendations;
|
c) |
The
Vessel’s current SMC;
|
d) |
The
DOC;
|
e) |
The
ISPS Certificate.
|
4 |
FINANCE
DOCUMENTS
|
a) |
The
Agreement;
|
b) |
The
Share Pledge Agreement (and any documents thereunder, including (but
not
limited to) any share certificates (if applicable));
|
c) |
The
Account Charge; and
|
d) |
The
Guarantee.
|
5 |
TRANSACTION
DOCUMENTS
|
a) |
The
Charterparty; and
|
b) |
The
Share Purchase Agreement.
|
6 |
MISCELLANEOUS
|
a) |
The
Drawdown Notice at least three (3) Business Days prior to the Drawdown
Date;
|
b) |
Evidence
that all fees referred to in Clause 11 (Fees), as are payable on
or prior
to the Drawdown Date, have or will be paid on its due
date;
|
c) |
A
Compliance Certificate confirming that the Borrower and the Guarantor
(on
a consolidated basis) is in compliance with the financial covenants
as set
out in Clause 20 (Financial covenants);
|
d) |
The
effective interest letter;
|
e) |
Evidence
that the Financial Indebtedness of the Owning Company is not more
than USD
8,700,000;
|
f) |
Evidence
of the time charterparty of the Vessel between the Company (as owner)
and
ST Shipping Ltd. (acting under a guarantee of Glencore International
A.G.)
for a period of not less than three (3) years from February 2006
at a
daily net hire of USD 22,000 in year 1 and 2 and USD 21,000 in year
3 with
a profit split for all three (3) years;
|
g) |
Evidence
(in form acceptable to the Lender) that the Company is able, and
not
restricted in any way from paying
dividends;
|
h) |
Evidence
of capital structure of the Borrower satisfactory to the
Lender;
|
i) |
Evidence
that all required registrations and notifications have been made
under the
Security Documents in order to perfect the Security Interest contemplated
thereby, including transcripts from the relevant public registers;
|
j) |
Appointment
of Ince Process Agents Limited and the acceptance by Ince Process
Agents
Limited as the Borrower’s process agent in England under the Account
Charge;
|
k) |
Appointment
of Xxxxx Xxxxxx-Xxxxxx & Xxxxxxxxx and the acceptance by Xxxxx
Xxxxxx-Xxxxxx & Xxxxxxxxx as the Borrower’s and the Guarantor’s
process agent in Norway under the Finance Documents;
and
|
l) |
Any
other documents as reasonably requested by the
Lender.
|
7 |
LEGAL
OPINIONS
|
a) |
A
legal opinion from Thommessen Xxxxxxxx Xxxxx Xxxx AS related to Norwegian
law issues;
|
b) |
A
legal opinion from Xxxxxx & Xxxxxx LLP related to Xxxxxxxx Island law
issues;
|
c) |
A
legal opinion from Xxxxxx & Xxxxxx LLP related to Liberian law
issues;
|
d) |
A
legal opinion from Prettys related to English law issues;
and
|
e) |
Any
such other favourable legal opinions in form and substance satisfactory
to
the Lender from lawyers appointed by the Lender on matters concerning
all
relevant jurisdictions.
|
SCHEDULE
2
FORM
OF DRAWDOWN NOTICE
To: Nordea
Bank Norge ASA, as Lender
From: Seapowet
Trading Ltd.
Date: [•]
SEAPOWET
TRADING LTD. - USD 8,000,000 TERM LOAN FACILITY AGREEMENT DATED 5 SEPTEMBER
2006
(THE “AGREEMENT”)
We
refer
to Clause 5.1 (Delivery of the Drawdown Notice) of the Agreement. Terms defined
in the Agreement shall have the same meaning when used in this Drawdown
Notice.
a) |
You
are hereby irrevocably notified that we wish to make the following
drawdown of a Drawdown under:
|
Proposed
Drawdown Date: [
]
Principal
Amount: [ ]
Interest
Period: [ ]
b) |
The
proceeds of the Loan shall be credited to [•] [insert
name and number of account].
|
c) |
We
confirm that, as of the date hereof (i) each condition specified
in Clause
4 (Conditions Precedent) of the Agreement is satisfied; (ii) each
of the
representations and warranties set out in Clause 18 (Representations
and
warranties) of the Agreement is true and correct; and (iii) no event
or
circumstances has occurred and is continuing which constitute or
may
constitute an Event of Default.
|
Yours
sincerely
for
and
on behalf of
Seapowet
Trading Ltd.
By:
__________________________________
Name:
Title:
[authorised officer]
SCHEDULE
3
FORM
OF SELECTION NOTICE
To: Nordea
Bank Norge ASA, as Lender
From: Seapowet
Trading Ltd.
Date: [•]
2006
SEAPOWET
TRADING LTD. - USD 8,000,000 TERM LOAN FACILITY AGREEMENT DATED 5 SEPTEMBER
2006
(THE “AGREEMENT”)
We
refer
to the Agreement. Terms defined in the Agreement shall have the same meaning
when used in this Selection Notice.
a) |
We
refer to the amount outstanding under the Loan with an Interest Period
ending on [•].
|
b) |
We
request that the next Interest Period for the Loan is
[•].
|
This
Selection Notice is irrevocable.
Yours
sincerely
for
and
on behalf of
Seapowet
Trading Ltd.
By:
____________________________________
Name:
Title:
SCHEDULE
4
FORM
OF COMPLIANCE CERTIFICATE
To: Nordea
Bank Norge ASA, as Lender
From: Seapowet
Trading Ltd.
Date: [•]
[To
be
delivered no later than [one hundred and twenty (120) /forty-five (45)] days
after each Reporting Date]
SEAPOWET
TRADING LTD. - USD 8,000,000 TERM LOAN FACILITY AGREEMENT DATED
[·]
2006 (THE “AGREEMENT”)
We
refer
to the Agreement. Terms defined in the Agreement shall have the same meaning
when used in this Compliance Certificate.
With
reference to Clauses 19.1 (Compliance certificate) and 20 (Financial covenants)
of the Agreement, we confirm that as at [•] [insert relevant Reporting
Date]:
a) |
Minimum
Value Adjusted Equity Ratio.
The Minimum Value Adjusted Equity Ratio of the Guarantor (on a
consolidated basis) was [•].
|
The
Guarantor shall at all times maintain a minimum Value Adjusted Equity Ratio
of
thirty per cent (30.00%). The covenant in Clause 20.2.1 (Minimum Value Adjusted
Equity Ratio) is thus [not] satisfied.
b) |
Minimum
Value Adjusted Equity Ratio.
The Minimum Value Adjusted Equity of the Guarantor (on a consolidated
basis) was USD [•].
|
The
Guarantor shall at all times maintains a Minimum Value Adjusted Equity of USD
50,000,000. The covenant set out in Clause 20.2.2 (Minimum cash balance) is
thus
[not] satisfied.
c) |
Ratio
EBITDA to Fixed Charges.
The ratio of EBITDA to Fixed Charges of the Guarantor (on a consolidated
basis) was [•].
|
The
Guarantor (on a consolidated basis) shall at all times ensure that ratio of
EBITDA to Fixed Charges shall be minimum one hundred and twenty-five per cent
(125.00%) on a twelve (12) months rolling basis up until the Final Maturity
Date. The covenant in Clause 20.2.3 (Ratio EBITDA to Fixed Charges) is thus
[not] satisfied.
d) |
Positive
working capital. The
working capital of the Guarantor (on a consolidated basis) was
[·].
|
The
Guarantor (on a consolidated basis) shall at all times ensure that its current
assets exceeds its current liabilities (excluding the current portion of long
term debt), all as determined in accordance with GAAP. The covenant set out
in
Clause 20.2.4 (Positive working capital) is thus [not] satisfied.
e) |
Cash
and Cash Equivalents. The
Guarantor (on a consolidated basis) shall at all times ensure that
it has
Cash and Cash Equivalents equal to or greater than (i) USD 15,000,000
and
(ii) six per cent (6.00%) of the long term debt of the
Guarantor.
|
f) |
We
confirm that, as of the date hereof (i) each of the representations
and
warranties set out in Clause 18 (Representations and warranties)
of the
Agreement is true and correct; and (ii) no event or circumstances
has
occurred and is continuing which constitute or may constitute an
Event of
Default.
|
Yours
sincerely
for
and
on behalf of
B+H
Ocean Carriers Ltd. Seapowet
Trading Ltd.
By:
__________________________________ By:
_______________________________
Name: Name:
Title:
[authorised officer] Title:
SCHEDULE
5
FORM
OF GUARANTEE
Guarantee
and Indemnity
This
Guarantee (this “Guarantee”)
is
made on [•] between:
(1) B+H
Ocean Carriers Ltd.,
of 80
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the “Guarantor”);
and
(2) Nordea
Bank Norge ASA,
organisation no. 911 044 110, Middelthunsgt. 17, N-0368 Oslo, Norway (the
“Lender”).
WHEREAS
(A) Pursuant
to the terms and conditions of a term loan facility agreement dated
[·]
2006
(the “Agreement”)
between Seapowet Trading Ltd. as borrower (the “Borrower”)
and
the Lender, the Lender has agreed to make available to the Borrower a term
loan
in the aggregate amount of USD 8,000,000 (the “Loan”);
(B) subject
to the terms and conditions of the Agreement, the Loan will be made available
to
the Borrower for the purpose of (i) partly refinancing the purchase price paid
by the Borrower for fifty per cent (50.00%) of the shares in Xxxxxx OBO II
Inc.
of 80 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx xnd (ii) the payment of fees and expenses
incurred in connection with the Facility; and
(C) it
is a
condition of the Agreement that the Guarantor enters into this Guarantee. A
similar guarantee agreement may also be executed by other parties pursuant
to
the Agreement, but the execution and enforceability of such other guarantee
agreements shall not be a condition to the effectiveness or enforceability
of
this Guarantee.
IT
IS AGREED AS FOLLOWS:
1 |
DEFINITIONS
|
Capitalised
terms used herein shall, save as expressly defined herein, have the same
meanings as ascribed thereto in the Agreement.
2 |
GUARANTEE
|
2.1 |
Guarantee
obligations
|
The
Guarantor hereby unconditionally and irrevocably:
a) |
guarantees
to the Lender, as and for its own debt and not merely as surety (as
selvskyldnerkausjonist),
the punctual performance by the Borrower of all of the Borrower’s
obligations under the Finance Documents and any Swap Agreement(s);
|
b) |
undertakes
with the Lender that whenever the Borrower does not pay any amount
when
due under or in connection with any Finance Document and/or any Swap
Agreement(s), the Guarantor shall immediately on demand by the Lender
pay
that amount as if it were the principal obligor; and
|
c) |
indemnifies
the Lender immediately on demand against any cost, loss or liability
suffered by the Lender if any obligation guaranteed by the Guarantor
is or
becomes unenforceable, invalid or illegal. The amount of the cost,
loss or
liability shall be equal to the amount which that Lender would otherwise
have been entitled to recover.
|
2.2 |
Payment
upon first demand
|
If
the
Borrower shall fail to pay any sum under the Finance Documents and/or any Swap
Agreement(s) as and when such sum shall become due and payable, the Guarantor
shall immediately upon the Lender’s first written demand pay to the Lender an
amount equal to such sum which the Borrower shall not have paid, such payment
to
be made in immediately available funds to the account of the Lender, as the
Lender may designate, without set-off or counter-claim and free and clear of
and
without deduction for or on account of any present or future Taxes.
2.3 |
Continuing
guarantee
|
The
obligations of the Guarantor hereunder (the “Guarantee
Obligations”)
are
continuing obligations and will extend to the ultimate balance of sums payable
by the Borrower under the Finance Documents and any Swap Agreement(s),
regardless of any intermediate payment or discharge in whole or in
part.
2.4 |
Maximum
liability
|
The
liability of the Guarantor hereunder shall be limited to USD 8,500,000, plus
any
unpaid amount of interest, fees, liability and expenses under the Finance
Documents and any Swap Agreement(s).
2.5 |
Reinstatement
|
If
any
payment by the Borrower or any discharge given by the Lender (whether in respect
of the obligations of the Borrower or any security for those obligations or
otherwise) is avoided or reduced as a result of insolvency or any similar
event:
a) |
the
liability of the Borrower shall continue as if the payment, discharge,
avoidance or reduction had not occurred;
and
|
b) |
the
Lender shall be entitled to recover the value or amount of that security
or payment from the Borrower, as if the payment, discharge, avoidance
or
reduction had not occurred.
|
2.6 |
Waiver
of defences
|
The
obligations of the Guarantor under this Clause 2 will not be affected by an
act,
omission, matter or thing which, but for this Clause 2, would reduce, release
or
prejudice any of its obligations under this Clause 2 (without limitation and
whether or not known to it or the Lender including (but not limited
to:
a) |
any
time, waiver or consent granted to, or composition with, the Borrower
or
other person;
|
b) |
the
release of the Borrower or any other person under the terms of any
composition or arrangement with any creditor of any member of the
Group;
|
c) |
the
taking, variation, compromise, exchange, renewal or release of, or
refusal
or neglect to perfect, take up or enforce, any rights against, or
security
over assets of, the Borrower or other person or any non-presentation
or
non-observance of any formality or other requirement in respect of
any
instrument or any failure to realise the full value of any
security;
|
d) |
any
incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of the Borrower or
any
other person;
|
e) |
any
amendment (however fundamental) or replacement of a Finance Document,
a
Swap Agreement or any other document or
security;
|
f) |
any
unenforceability, illegality or invalidity of any obligation of any
person
under any Finance Document, any Swap Agreement or any other document
or
security; or
|
g) |
any
insolvency or similar proceedings.
|
2.7 |
Waiver
of rights under the FA Act
|
The
Guarantor specifically waives all rights under the provisions of the Norwegian
Financial Agreements Act (“FA
Act”) of
25
June 1999 no. 46 not being mandatory provisions, including the following
provisions (the main contents of the relevant provisions being as indicated
in
the brackets):
a) |
§
62 (1) (a)
(to be notified of any security the giving of which was a precondition
for
the advance of the Loan, but which has not been validly granted or
has
lapsed);
|
b) |
§
63 (1) - (2)
(to be notified of any Event of Default under the Agreement and/or
any
Swap Agreement and to be kept informed
thereof);
|
c) |
§
63 (3) (to
be notified of any extension granted to the Borrower in payment of
principal and/or interest);
|
d) |
§
63 (4)
(to be notified of the Borrower’s bankruptcy proceedings or debt
reorganisation proceedings and/or any application for the
latter);
|
e) |
§
65 (3)
(that the consent of the Guarantor is required for the Guarantor
to be
bound by amendments to the Agreement and/or any Swap Agreement that
may be
detrimental to its interest);
|
f) |
§
66 (1) - (2)
(that the Guarantor shall be released from liabilities hereunder
if
security which was given, or the giving of which was a precondition
for
the advance of the Loan, is released by the Lender without the consent
of
the Guarantor);
|
g) |
§
66 (3)
(that the Guarantor shall be released from its liabilities hereunder
if,
without its consent, security the giving of which was a precondition
for
the advance of the Loan or the execution of the Guarantee, was not
validly
granted);
|
h) |
§
67 (2)
(about reduction of the Guarantor’s liabilities
hereunder);
|
i) |
§
67 (4) (that
the Guarantor's liabilities hereunder shall lapse after ten (10)
years, as
the Guarantor shall remain liable hereunder as long as any amount
is
outstanding under the Agreement, any Swap Agreement or the Security
Documents);
|
j) |
§
70
(as the Guarantor shall have no right of subrogation into the rights
of
the Lender under the Agreement, any Swap Agreement or the Security
Documents until and unless the Lender shall have received all amounts
due
or to become due to it under the Agreement, any Swap Agreement and
the
Security Documents);
|
k) |
§
71
(as the Lender shall have no liability first to make demand upon
or seek
to enforce remedies against the Borrower or any other security provided
in
respect of the Borrower’s liabilities under the Agreement and/or any Swap
Agreement and/or the Security Documents before seeking to enforce
the
security created hereunder);
|
l) |
§
72
(as all interest and default interest due under the Agreement and/or
any
Swap Agreement and/or the Security Documents shall be secured
hereunder);
|
m) |
§
73 (1) - (2)
(as all costs and expenses related to a default under the Agreement
and/or
any Swap Agreement and/or the Security Documents shall be secured
hereunder); and
|
n) |
§
74 (1) - (2)
(as the Guarantor shall make no claim against the Borrower for payment
until and unless the Lender first shall have received all amounts
due or
to become due to them under the Agreement, any Swap Agreement and
the
Security Documents).
|
2.8 |
Immediate
recourse
|
The
Guarantor waives any right it may have of first requiring the Lender (or any
agent on its behalf) to proceed against or enforce any other rights or security
or claim payment from any person before claiming from the Guarantor under this
Clause 2. This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
2.9 |
Appropriations
|
Until
all
amounts which may be or become payable by the Borrower under or in connection
with the Finance Documents and/or any Swap Agreement have been irrevocably
paid
in full, the Lender (or any agent on its behalf) may:
a) |
refrain
from applying or enforcing any other moneys, security or rights held
or
received by the Lender (or any agent on its behalf) in respect of
those
amounts, or apply and enforce the same in such manner and order as
it sees
fit (whether against those amounts or otherwise) and the Guarantor
shall
not be entitled to the benefit of the same; and
|
b) |
hold
in an interest-bearing suspense account any moneys received from
the
Guarantor or on account of the Guarantor’s liability under this Clause
2.
|
2.10 |
Deferral
of Guarantor’s rights
|
Until
all
amounts which may be or become payable by the Borrower under or in connection
with the Finance Documents and/or any Swap Agreement have been irrevocably
paid
in full and unless the Lender otherwise directs, the Guarantor will not exercise
any rights which it may have by reason of performance by it of its obligations
under the Finance Documents and/or any Swap Agreement:
a) |
to
be indemnified by the Borrower;
|
b) |
to
claim any contribution from any other guarantor of the Borrower’s
obligations under the Finance Documents and/or any Swap Agreement;
and/or
|
c) |
to
take the benefit (in whole or in part and whether by way of subrogation
or
otherwise) of any rights of the Lender under the Finance Documents
and/or
any Swap Agreement or of any other guarantee or security taken pursuant
to, or in connection with, the Finance Documents and/or any Swap
Agreement
by the Lender.
|
2.11 |
Additional
security
|
This
guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by the Lender.
3 |
UNDERTAKINGS
|
The
Guarantor undertakes to the Lender that as long as this Guarantee is
effective:
a) |
it
shall at all times comply with all its obligations, covenants,
undertakings and representations under the Finance Documents and/or
any
Swap Agreement, and undertakes to comply with and perform all such
obligations, covenants, undertakings and representations with relates
to
the Guarantor in the Agreement, hereunder (but not limited to) the
information undertakings as set out in Clause 19 (Information
undertakings), the financial covenants as set out in Clause 20 (Financial
covenants) and the general undertakings as set out in Clause 21 (General
undertakings) of the Agreement and the obligation to deliver a Compliance
Certificate as set out in Clause 19.2 (Compliance Certificate) of
the
Agreement;
|
b) |
following
receipt of a notice from the Lender of the occurrence of any Event
of
Default, the Guarantor will not make a demand for any claim of moneys
due
to the Guarantor from the Borrower or any other guarantor, or exercise
any
other right or remedy to which the Borrower or any other guarantor
are
entitled to in respect of such moneys unless and until all moneys
due and
payable by the Borrower have been irrevocably paid in
full;
|
c) |
if
the Borrower or any other guarantor becomes the subject of an insolvency
proceeding or shall be wound up or liquidated, the Guarantor shall
not
(unless so instructed by the Lender and then only on condition that
the
Guarantor holds the benefit of any claim in such insolvency or liquidation
to pay any amounts recovered thereunder to the Lender) make any claim
in
such insolvency, winding-up or liquidation until all the Loan owing
or due
has been irrevocably paid in full;
|
d) |
if
the Guarantor being in breach of litra b) and c) above receives or
recovers any money pursuant to such exercise, claim or proof as therein
referred to, such moneys shall be held by the Guarantor for the Lender
to
apply the same as if they were money received or recovered by the
Lender
under this Guarantee; and
|
e) |
it
will not take or has not taken from the Borrower any security whatsoever
for the obligations guaranteed hereunder.
|
4 |
REPRESENTATIONS
AND WARRANTIES
|
The
Guarantor represents and warrants to the Lender as follows:
a) |
the
Guarantor is duly organised and validly existing as a private limited
liability company under the laws of Liberia and has the corporate
power
and authority to own its assets and carry on its business as it is
presently being conducted in each jurisdiction in which it owns assets
or
carry on business;
|
b) |
the
Guarantor has the power to enter into, perform and deliver, and has
taken
all necessary actions to authorise its entry into, performance and
delivery of this Guarantee; and
|
c) |
the
Guarantee constitutes the legal, valid and binding obligations of
the
Guarantor, enforceable against the Guarantor in accordance with its
terms
and will be so treated in any relevant courts and this Guarantee
is in
proper form for enforcement in such
courts.
|
5 |
ASSIGNMENT
|
The
Lender may assign or transfer the rights hereunder to any person to whom the
rights and obligations of the Lender under the Agreement are wholly or partly
assigned or transferred to in accordance with Clause 24.2 (Assignment and
transfer by the Lender) of the Agreement.
6 |
EXPENSES
|
The
Guarantor shall pay to the Lender on demand on a full indemnity basis all
charges, costs and expenses (including the legal fees) properly incurred by
the
Lender in connection with the preservation and enforcement of any of the rights
of the Lender hereunder.
7 |
MISCELLANEOUS
|
7.1 |
No
implied waivers
|
No
delay
or failure by the Lender to exercise any right or remedy under this Guarantee
shall operate or be construed as a waiver of such rights or remedies unless
otherwise expressly stated in writing by the Lender. No partial exercise of
any
right or remedy shall prevent any further or other exercise of such right or
remedy or any other right or remedy. No express waiver of any rights or remedies
in respect of an Event of Default or any other event by the Lender shall operate
or be construed as a waiver of any rights or remedies in respect of any similar
or other Event of Default or events.
7.2 |
Separable
provisions
|
The
provisions of this Guarantee are separable and, if any provision of this
Guarantee is or becomes illegal, invalid or unenforceable in any respect in
any
jurisdiction, this shall not affect the legality, validity or enforceability
of
such provisions in any other jurisdiction or the legality, validity or
enforceability of the remaining provisions of the Guarantee in that or any
other
jurisdiction.
7.3 |
Borrower
as agent for the Guarantor
|
The
Borrower shall be the agent of the Guarantor and any notice, statement or
agreement by the Borrower to or with the Lender shall be binding on the
Guarantor.
7.4 |
Law
and jurisdiction
|
7.4.1 |
Governing
law
|
This
Guarantee shall be governed by and construed in accordance with Norwegian
law.
7.4.2 |
Main
jurisdiction
|
The
Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of the
Norwegian courts, the venue to be Oslo City Court (Oslo tingrett) and the
Guarantor agrees for the benefit of the Lender that any legal action or
proceedings arising out of or in connection with this Guarantee against the
Guarantor or any of its assets may be brought in the said court.
7.4.3 |
Alternative
jurisdiction
|
This
Clause 7.4.3 is for the exclusive benefit of the Lender which has the
right:
a) |
to
commence proceedings against the Guarantor or its assets both in
any court
in Norway and any other jurisdiction;
and
|
b) |
to
commence enforcement proceedings in any jurisdiction concurrently
with or
in addition to proceedings in Norway or without commencing proceedings
in
Norway.
|
The
parties agree that only the courts of Norway and not those of any other state
shall have jurisdiction to determine any claim which the Guarantor may have
against the Lender and that the Guarantor shall only be entitled to commence
legal action or proceedings against the Lender in relation to this Guarantee
in
Oslo City Court (Oslo tingrett).
8 |
NOTICES
|
Every
notice, demand or other communication under this Guarantee shall be made by
letter or telefax. Any such notice or communication given by any of the parties
hereto shall be made to the other party at the following address:
a) |
If
to the Lender:Nordea
Bank Norge ASA
|
Middelthunsgt.
17
P.X.
Xxx
0000 Xxxxxxx
X-0000
Xxxx, Xxxxxx
Att:
Shipping, Offshore and Oil Services
Telefax
No: + 47 22 48 66 68
b) |
If
to the Guarantor:B
+
H Ocean Carriers Ltd.
|
c/o
B + H
Management Ltd.
Par-la-Ville
Place
14
Xxx-xx-Xxxxx Xxxx
Xxxxxxxx
XXXX
Xxxxxxx
Xxx.:
Telefax:
+ 1 441 295 6796
8.2 |
Service
of process
|
Without
prejudice to any other mode of service, the Guarantor:
a) |
irrevocably
appoints Wikborg Rein & Co., Kronprinsesse Märthas xxxxx 1, P.X. Xxx
0000 Xxxx, X-0000 Xxxx, Xxxxxx xs its Lender for service of process
relating to any proceedings before Norwegian courts in connection
with
this Agreement; and
|
b) |
agrees
that failure by its process Lender to notify it of the process will
not
invalidate the proceedings
concerned.
|
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Guarantee in two (2) original copies
on
the date and year first written above.
The
Guarantor: The
Lender:
B+
H Ocean Carriers Ltd. Nordea
Bank Norge ASA
By:
_____________________________ By:
____________________________
Name: Name:
Title: Title:
SIGNATORIES
The
Borrower: The
Lender:
Seapowet
Trading Ltd. Nordea
Bank Norge ASA
By:
__/s/ Haakon Flaaten______ By:
__/s/ Siri Wennevik____________________________
Name: Name:
Title: Attorney-in-Fact Title:
Attorney-in-Fact
We,
B+H
Ocean Carriers Ltd., hereby acknowledge and agree to the terms of this Agreement
and agree to be bound by Clauses 18 (Representations and warranties), 19
(Information undertakings), 20 (Financial covenants), 21 (General undertakings)
and 23 (Events of Default) of this Agreement to the extent applicable to the
Guarantor as if we were a party to this Agreement.
5
September 2006
Guarantor:
B+H
Ocean Carriers Ltd.
By:
__/s/ Haakon Flaaten______
Name:
Title: Attorney-in-Fact