DATED 22 SEPTEMBER 2000
XXXXX COMEX SEAWAY FINANCE B.V.
(as borrower)
- and -
XXXXX OFFSHORE S.A.
(as guarantor)
- and -
DEN NORSKE BANK ASA
BANC OF AMERICA SECURITIES LLC,
SALOMON BROTHERS INTERNATIONAL LIMITED
HSBC BANK PLC and
ING BARINGS LLC
(as lead arrangers)
- and -
DEN NORSKE BANK ASA
and others
(as banks)
- and -
DEN NORSKE BANK ASA
(as facility agent and security trustee)
- and -
BANK OF AMERICA N.A.
CITIBANK N.A.
and others
(as syndication agents and joint book managers)
- and -
ING BARINGS LLC
(as documentation agent)
-----------------------------------------
US$440,000,000 SECURED
MULTI-CURRENCY REVOLVING LOAN
FACILITY AGREEMENT
-----------------------------------------
CONTENTS
Page
1 Definitions and Interpretation...........................................2
2 The Facility and its Purpose............................................20
3 Conditions Precedent and Subsequent.....................................24
4 Representations and Warranties..........................................29
5 Currency................................................................33
6 Repayment and Prepayment................................................34
7 Interest................................................................36
8 Guarantee and Indemnity.................................................37
9 Fees....................................................................42
10 Security Documents......................................................43
11 Agency and Trust........................................................43
12 Covenants...............................................................54
13 Earnings................................................................66
14 Events Of Default.......................................................66
15 Set-Off and Lien........................................................71
16 Assignment and Sub-Participation........................................72
17 Payments, Mandatory Prepayment, Reserve Requirements and Illegality.....74
18 Communications..........................................................80
19 General Indemnities.....................................................81
20 Miscellaneous...........................................................83
21 Law and Jurisdiction....................................................88
SCHEDULE 1....................................................................89
The Banks, the Commitments and the Proportionate Shares...............89
SCHEDULE 2....................................................................93
Lead Arrangers........................................................93
SCHEDULE 3....................................................................94
Syndication Agents and Joint Book Managers............................94
SCHEDULE 4....................................................................95
The Shipowning Guarantors and the Vessels.............................95
SCHEDULE 5....................................................................97
SCHEDULE 6....................................................................99
Form of Transfer Certificate..........................................99
APPENDIX A...................................................................107
APPENDIX B...................................................................108
APPENDIX C...................................................................109
LOAN FACILITY AGREEMENT
Dated: 22 September 2000
BETWEEN:-
(1) XXXXX COMEX SEAWAY FINANCE B.V. which is a company incorporated according
to the law of The Netherlands with its registered office at Xxxx
Xxxxxxxxxxxx 00, 0000 Xx Xxxxxxxxx, Albrands, The Netherlands (the
"Borrower"); and
(2) XXXXX OFFSHORE S.A. which is a company incorporated according to the law
of Luxembourg with its registered office at 26 rue Louvigny X-0000
Xxxxxxxxxx (the "Guarantor"); and
(3) the banks and financial institutions listed in Schedule 1, each acting
through its office at the address indicated against its name in Schedule 1
(together "the Banks" and each a "Bank"); and
(4) DEN NORSKE BANK ASA, acting as facility agent and security trustee through
its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Xxxxxx
Xxxxxx of America (in that capacity "the Agent"); and
(5) the banks and financial institutions listed in Schedule 2, each acting as
a lead arranger through its office at the address indicated against its
name in Schedule 2 (together in that capacity "the Arrangers" and each an
"Arranger"); and
(6) the banks and financial institutions listed in Schedule 3, each acting as
a syndication agent and joint book manager through its office at the
address indicated against its name in Schedule 3 (together in that
capacity "the Syndication Agents" and each a "Syndication Agent"); and
(7) ING BARINGS LLC as documentation agent through its office at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (in that capacity the "Documentation
Agent").
WHEREAS:-
(A) Each of the Vessels is registered in the name and ownership of her
Shipowning Guarantor under the flag of the country as indicated in
Schedule 4.
(B) Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate principal amount not exceeding four hundred and
forty million Dollars ($440,000,000) or the Equivalent Amount in a
Permitted Currency or Permitted Currencies (as appropriate) in order to
assist the Borrower in providing for the re-financing of the Existing
Loans in full and with working capital for the Borrower and members of the
SO Group and for other general corporate purposes. It is specifically
agreed that at least the lower of fifty five million Dollars ($55,000,000)
and one eighth (1/8) of the Facility Outstandings at any time during the
Facility Period shall be lent by the Borrower to its parent company, Xxxxx
Offshore A/S.
IT IS AGREED as follows:-
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:-
1.1.1 "the Address for Service" means c/x Xxxxx Offshore M.S.
Limited of 1st Floor, Dolphin House, Windmill Road,
Sunbury-on-Thames, Middlesex TW16 7HT, England or, in relation
to any of the Security Parties, such other address in England
and Wales as that Security Party may from time to time
designate by no fewer than ten Business Days' written notice
to the Agent.
1.1.2 "Additional Permitted Indebtedness" has the meaning ascribed
to it in Clause 12.3.1(e).
1.1.3 "the Additional Rate" means the cost imputed to the Banks of
compliance with:
2
(a) the mandatory liquid asset requirements of the Bank of
England and/or the banking supervision or other costs
imposed by the Financial Services Authority, as
determined in accordance with Appendix C; and
(b) any other applicable regulatory or central bank
requirement (including any requirement of the European
Central Bank) relating to any amount advanced under this
Agreement by a Bank through a branch in a state being
one of the participating countries which at the relevant
time shall have entered into economic and monetary union
(as a result of the legislative measures contemplated by
the Treaty of Rome of 25 March 1957, as amended from
time to time).
1.1.4 "the Administration" has the meaning given to it in paragraph
1.1.3 of the ISM Code.
1.1.5 the "Advance Date", in relation to any Drawing, means the date
on which that Drawing is advanced by the Banks to the Borrower
pursuant to Clause 2.
1.1.6 "the Assignments" means the deeds of assignment of the
Insurances, Earnings and Requisition Compensation in respect
of each Vessel referred to in Clause 10.2 (each an
"Assignment").
1.1.7 "the Borrower's Obligations" means all of the liabilities and
obligations of the Borrower to the Finance Parties under or
pursuant to the Borrower's Security Documents, whether actual
or contingent, present or future, and whether incurred alone
or jointly or jointly and severally with any other and in
whatever currency, including (without limitation) interest,
commission and all other charges and expenses.
1.1.8 "the Borrower's Security Documents" means those of the
Security Documents to which the Borrower is or is to be a
party.
3
1.1.9 "Break Costs" means all documented costs, losses, premiums or
penalties incurred by any of the Finance Parties in the
circumstances contemplated by Clause 19.4 or as a result of
any of them receiving any prepayment of all or any part of the
Facility (whether pursuant to Clause 6.2 or otherwise) or any
other payment under or in relation to the Security Documents
on a day other than the due date for payment of the sum in
question, and includes (without limitation) any losses or
costs incurred in liquidating or re-employing deposits from
third parties acquired to effect or maintain the Facility, and
any liabilities, expenses or losses incurred by any of the
Finance Parties in terminating or reversing, or otherwise in
connection with, any interest rate and/or currency swap,
transaction or arrangement entered into by any of the Finance
Parties to hedge any exposure arising under this Agreement, or
in terminating or reversing, or otherwise in connection with,
any open position arising under this Agreement.
1.1.10 "Business Day" means (a) a day on which banks are open for the
transaction of business of the nature contemplated by this
Agreement (and not authorised by law to close) in Xxx Xxxx
Xxxx, Xxxxxx Xxxxxx xx Xxxxxxx; Xxxxxx, Xxxxxxx; Frankfurt am
Main Germany; Oslo, Norway; and (b) in relation to the
determination of interest rates for euros only, a day on which
the Trans-European Automated Real Time Gross Settlement
Express System (TARGET) is operating.
1.1.11 "Certificate of Compliance" means a certificate materially in
the form set forth in Schedule 5, signed by the finance
director or similar officer of the Guarantor.
1.1.12 "Change of Control" means that SNSA shall cease, for any
reason whatsoever, to own or control directly or indirectly,
shares of the Guarantor representing at least 30% of all votes
capable of being represented in any shareholders' meeting of
the Guarantor or if any shareholder or group of shareholders
acting in concert outside SNSA at any time own or control,
directly or indirectly, more of the issued voting
4
shares determined, on a per vote basis, of the Guarantor than
those owned by SNSA.
1.1.13 "Commitment" means, in relation to each Bank, the amount of
the Facility which that Bank agrees to advance to the Borrower
as its several liability as indicated against the name of that
Bank in Schedule 1, as reduced from time to time in accordance
with Clause 2.4.5, or, where the context permits, the amount
of the Facility advanced by that Bank and remaining
outstanding.
1.1.14 "Commitment Commission" means the commitment commission to be
paid by the Borrower to the Agent pursuant to Clause 9.2.
1.1.15a "Communication" means any notice, approval, demand, request or
other communication from one party to this Agreement to any
other party to this Agreement.
1.1.16 "the Communications Address" means c/x Xxxxx Offshore M.S.
Limited of 1st Floor, Xxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxx-xx-Xxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxx, fax no: +(44)
1932 773701 marked for the attention of Xxxxxxx Xx-Xxxx.
1.1.17 "the Company" means, in relation to any Vessel and at any
given time, the company responsible for the Vessel's
compliance with the ISM Code pursuant to paragraph 1.1.2 of
the ISM Code.
1.1.18 "Consolidated Debt" means for the Guarantor and its
Subsidiaries (on a consolidated basis) at any time, the
aggregate value of (i) notes payable (whether promissory notes
or otherwise), plus (ii) long-term debt (including current
portion of long-term debt), plus (iii) capitalised lease
obligations on behalf of third parties and all contingent
liabilities related to debt and capital lease obligations
which, according to US GAAP, are considered probable and
estimable, plus (iv) subordinated debt, less (v) the amount of
debt for which there is a restricted cash deposit which will
repay all or part of such financial debt obligation.
5
1.1.19 "Consolidated Tangible Net Worth" means for the Guarantor and
its Subsidiaries (on a consolidated basis) at any time (a) the
sum, to the extent shown on the Guarantor's consolidated
balance sheet, of (i) the amount of issued and outstanding
share capital, less the cost of treasury shares, plus (ii) the
amount of surplus and retained earnings, less (b) intangible
assets as determined in accordance with US GAAP.
1.1.20 "converted" means actually or notionally (as the case may
require) converted by the Agent, at the rate at which the
Agent, in accordance with its usual practice, is able in the
London Interbank market to purchase the Permitted Currency in
which the Facility or part thereof is then denominated with
the Permitted Currency in which the Facility or part thereof
is to be denominated, on the second Business Day before the
value date for that conversion pursuant to Clause 5, and the
words "convert" and "conversion" shall be interpreted
accordingly.
1.1.21 "Currency of Account" means, in relation to any payment to be
made to a Finance Party pursuant to any of the Security
Documents, the currency in which that payment is required to
be made by the terms of the relevant Security Document.
1.1.22 "the Deed of Covenants" means the deed of covenants referred
to in Clause 10.1.
1.1.23 "Default Rate" means the rate which is the aggregate of (i)
one per centum (1%) per annum (ii) the applicable Margin,
above LIBOR and (iii) the Additional Rate.
1.1.24 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
1.1.25 "Dollars" and "$" each means available and freely transferable
and convertible funds in lawful currency of the United States
of America.
6
1.1.26 "Drawdown Notice" means a notice complying with Clause 2.3.
1.1.27 "Drawing" means a part (or, if requested and available, all)
of the Facility advanced by the Banks to the Borrower in
accordance with Clause 2.
1.1.28 "Earnings", in relation to a Vessel, means all hires,
freights, pool income and other sums payable to or for the
account of a Shipowning Guarantor in respect of that Vessel
including (without limitation) all remuneration for salvage
and towage services, demurrage and detention moneys,
contributions in general average, compensation in respect of
any requisition for hire and damages and other payments
(whether awarded by any court or arbitral tribunal or by
agreement or otherwise) for breach, termination or variation
of any contract for the operation, employment or use of the
Vessel.
1.1.29 "EBITDA" means the consolidated Earnings of the Guarantor and
its Subsidiaries before interest, Taxes, depreciation and
amortisation, at any time during the Facility Period as
determined in accordance with US GAAP, calculated on a pro
forma basis to include acquisitions.
1.1.30 "Encumbrance" means any mortgage, charge, pledge, lien,
assignment, hypothecation, preferential right, option, title
retention or trust arrangement or any other agreement or
arrangement which, in any of the aforementioned instances, has
the effect of creating security.
1.1.31 "Equivalent Amount" means the amount of any Permitted Currency
converted from the relevant amount of Dollars.
1.1.32 "euro" means the currency of participating Member States of
the European Monetary Union, pursuant to Council Regulation
(EC) 974/98 of 3 May 1998, (as changed from time to time by
the European Communities).
1.1.33 "Event of Default" means any of the events set out in Clause
14.2.
7
1.1.34 "Execution Date" means the date on which this Agreement is
executed by each of the parties thereto.
1.1.35 "the Existing Loans" means the aggregate total amount
outstanding under the Existing Loan Agreements on the
Execution Date.
1.1.36 "Existing Loan Agreements" means together (i) the $125,000,000
revolving credit agreement dated 19 December 1997 made between
Seaway (UK) Ltd as borrower, Xxxxx Comex Seaway SA as
guarantor, (inter alios) Den norske Bank ASA and Midland Bank
plc as lenders, Midland Bank plc as facility agent and Den
norske Bank ASA as security agent, (ii) the $150,000,000
multi-currency revolving loan facility agreement dated 1 April
1999 made between (inter alios) the Borrower, the Guarantor
and the Banks (as defined therein) and (iii) the $150,000,000
revolving bridging loan facility agreement dated 4 February
2000 made between (inter alios) the Borrower, the Guarantor
and SNSA and the Banks (as defined therein).
1.1.37 "Facility" means the multi-currency revolving credit facility
made available by the Banks to the Borrower pursuant to this
Agreement.
1.1.38 "the Facility Outstandings" at any time means the total of all
Drawings made at that time, to the extent not reduced by
repayments, prepayments and voluntary reductions.
1.1.39 "the Facility Period" means the period beginning on the
Execution Date and ending on the date when the whole of the
Indebtedness has been repaid in full and the Borrower has
ceased to be under any further actual or contingent liability
to the Finance Parties under or in connection with the
Security Documents.
1.1.40 "Factoring Agreement" means the factoring agreement in
relation to the assignment of earnings contained in the
Assignment over mv "SEAWAY FALCON" to be made between the
Agent and Xxxxx Offshore A/S referred to in Clause 10.4.
8
1.1.41 "the Fee Letters" means the letters and the summary of terms
from the Agent and/or the Arrangers as agreed and accepted by
the Borrower and the Guarantor setting out certain fees,
commissions and other sums payable by the Borrower in
connection with the Facility.
1.1.42 "the Finance Parties" means the Banks, the Agent, the
Arrangers and the Syndication Agents.
1.1.43 "First Reduction Date" means 31 August 2002.
1.1.44 "French Francs" means available and freely transferable and
convertible funds in lawful currency of the Republic of
France.
1.1.45 "the Guarantee" means the guarantee and indemnity of the
Guarantor contained in Clause 8.
1.1.46 "the Guarantor's Liabilities" means all of the liabilities and
obligations of the Guarantor to the Finance Parties under or
pursuant to the Guarantee whether actual or contingent,
including (without limitation) Interest.
1.1.47 "the Indebtedness" means the Facility Outstandings; all other
sums of any nature including costs (together with all interest
on any of those sums) which from time to time may be payable
by the Borrower to the Finance Parties pursuant to the
Security Documents; any damages payable as a result of any
breach by the Borrower of any of the Security Documents; and
any damages or other sums payable as a result of any of the
obligations of the Borrower under or pursuant to any of the
Security Documents being disclaimed by a liquidator or any
other person, or, where the context permits, the amount
thereof for the time being outstanding.
1.1.48 an "Instructing Group" means any one or more Banks whose
combined Proportionate Shares exceed sixty six and two thirds
per centum (66 2/3%).
9
1.1.49 "Insurances", in relation to a Vessel, means all policies and
contracts of insurance (including but not limited to hull and
machinery, all entries in protection and indemnity or war
risks associations) which are from time to time taken out or
entered into in respect of or in connection with that Vessel
or her increased value and (where the context permits) all
benefits thereof, including all claims of any nature and
returns of premium.
1.1.50 "Interest" means interest at the Default Rate.
1.1.51 "Interest Payment Date" means each date for the payment of
interest in accordance with Clause 7.
1.1.52 "Interest Period" means each interest period selected by the
Borrower or agreed by the Agent pursuant to Clause 7.
1.1.53 "the ISM Code" means the International Management Code for the
Safe Management of Ships and for Pollution Prevention, as
adopted by the Assembly of the International Maritime
Organisation on 4 November 1993 by resolution A.741 (18) and
incorporated on 19 May 1994 as chapter IX of the Safety of
Life at Sea Convention 1974.
1.1.54 "law" means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other
legislative or quasi-legislative rule or measure, or any order
or decree of any government, judicial or public or other body
or authority, or any directive, code of practice, circular,
guidance note or other direction issued by any competent
authority or agency (whether or not having the force of law).
1.1.55 "LIBOR" means the rate, rounded to the nearest four decimal
places downwards (if the digit displayed in the fifth decimal
place is 1, 2, 3 or 4) or upwards (if the digit displayed in
the fifth decimal place is 5, 6, 7, 8 or 9) displayed on the
telerate page 3750 or, as the case may be, 3740 (or such other
page or pages which replace(s) either such page for the
purposes of display offered rates of leading banks, for
deposits in the Currency of
10
Account of amounts equal to the amount of the relevant Drawing
for a period equal in length to the relevant Interest Period
or if there is no such display rate then available for the
Permitted Currency for an amount comparable to the Drawing,
the arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of one-sixteenth per centum (1/16%)) of
the respective rates notified to the Agent by each of the
Reference Banks as the rate at which it is offered deposits in
the Currency of Account and for the required period by prime
banks in the London Interbank Market.
1.1.56 "the Managers" means any member of the SO Group; and/or such
other commercial and/or technical managers of the Vessels
nominated by the Shipowning Guarantors as the Agent may in its
discretion approve.
1.1.57 "Management Agreement" means, in relation to any Vessel which
is leased to a party outside the SO Group, the Management
Agreement made between the Managers and the relevant
Shipowning Guarantor.
1.1.58 "Margin" based on the ratio of Consolidated Debt to EBITDA for
the preceding four fiscal quarters ("D/EBITDA") during the
Facility Period means:-
(i) 0.75% where D/EBITDA is less than 1;
(ii) 1.00% where D/EBITDA is equal to or greater than 1 but
less than 2;
(iii) 1.25% where D/EBITDA is equal to or greater than 2 but
less than 3;
(iv) 1.50% where D/EBITDA is equal to or greater than 3 but
less than 4; and
(v) 1.75% where D/EBITDA is equal to or greater than 4,
Provided however that each applicable Margin shall
automatically increase by fifty per cent (50%) in the event of
a Change of Control, unless such Change of Control is
acceptable to all the Banks. The Margin shall be calculated by
the Agent as of 28/29 February, 31 May, 31 August
11
and 30 November each year (each a "Margin Review Date")
commencing 31 August 2000 for the succeeding fiscal quarter
and shall be calculated based on the Consolidated Debt as of
the previous Margin Review Date over EBITDA for the four
fiscal quarters, the most recent of which shall have ended on
the previous Margin Review Date.
1.1.59 "the Maximum Facility Amount" means the amount of the
aggregate Commitments (stated in Dollars) subject to any
reductions effected in accordance with Clauses 2.4, 6.6 and
17.8.
1.1.60 "the Mortgagees' Insurances" means all policies and contracts
of mortgagees' interest insurance and any other insurance from
time to time taken out by the Agent on behalf of the Banks in
relation to the Vessels pursuant to this Agreement.
1.1.61 "the Mortgages" means the first preferred and/or priority
mortgages referred to in Clause 10.1 (each a "Mortgage").
1.1.62 "Norwegian Kroner" means available and freely transferable and
convertible funds in the lawful currency of the Kingdom of
Norway.
1.1.63 "Original Dollar Amount" means, at any relevant time, the
amount of the Facility which would then have been outstanding
had the Facility at all times been denominated, drawn and
repaid wholly in Dollars in accordance with Clause 6.
1.1.64 "Permitted Currency" means Dollars, the euro, each of the
lawful currencies of France (namely French Francs), Norway
(namely Norwegian Kroner), the United Kingdom (namely Pounds
Sterling) and any other eurocurrency provided that each such
currency selected by the Borrower is acceptable to the Banks
and is freely convertible, transferable and available to the
Banks in the London Interbank market and in respect of which
the Agent is at all material times able to ascertain LIBOR.
12
1.1.65 "Permitted Indebtedness" means Short Term Permitted
Indebtedness, Subordinated Debt up to one hundred million
Dollars ($100,000,000) and Additional Permitted Indebtedness.
1.1.66 "Permitted Liens" means (i) liens for salvage and any
Encumbrance which has the prior written approval of the Agent
acting upon the instructions of all the Banks, or (ii) any
Encumbrance arising either by operation of law or in the
ordinary course of the business of the relevant Security Party
which is discharged in the ordinary course of business but in
any event does not exist for more than sixty (60) days.
1.1.67 "Potential Event of Default" means any event which, with the
giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an
Event of Default.
1.1.68 "Pounds Sterling" means pounds sterling being the available
and freely transferable and convertible funds in the lawful
currency of the United Kingdom.
1.1.69 "Principal Subsidiary" means any member of the SO Group having
total assets exceeding ten per cent (10%) of the consolidated
assets of the SO Group and/or having during the last four
fiscal quarters accounted for more than ten per cent (10%) of
the consolidated turnover of the SO Group.
1.1.70 "Proceedings" means any suit, action or proceedings begun by
any of the Finance Parties arising out of or in connection
with the Security Documents.
1.1.71 "Proportionate Share" means, for each Bank, the percentage
indicated against the name of that Bank in Schedule1, as
amended by any Transfer Certificate executed from time to
time.
1.1.72 "Pro Rata Insurance Proceeds Amount" means, in respect of each
Vessel, a figure equal to (x) a fraction in which (i) the
numerator is the
13
amount of the insurance proceeds payable in respect of such
Vessel in the event of a Total Loss and (ii) the denominator
is the aggregate market value of all the Vessels (based on the
Valuations) multiplied by (y) the Maximum Facility Amount.
1.1.73 "Reference Banks" means the Agent, HSBC Bank Plc and Bank of
America N.A.
1.1.74 "Requisition Compensation", in relation to a Vessel, means all
compensation or other money which may from time to time be
payable to the relevant Shipowning Guarantor as a result of
the Vessel being requisitioned for title or in any other way
compulsorily acquired (other than by way of requisition for
hire).
1.1.75 "Second Reduction Date" means 31 August 2003.
1.1.76 "the Security Documents" means this Agreement, the Mortgages,
the Deed of Covenants, the Assignments, the Factoring
Agreement, the Shipowners' Guarantee, or (where the context
permits) any one or more of them, and any other agreement or
document which may at any time be executed by a member of the
SO Group as security for the payment of all or any part of the
Indebtedness.
1.1.77 "Security Parties" means the Borrower, the Guarantor, the
Shipowning Guarantors and any other member of the SO Group who
may at any time during the Facility Period be liable for, or
provide security for, all or any part of the Indebtedness, and
"Security Party" means any one of them.
1.1.78 "the Shipowners' Guarantee" means the joint and several
guarantee and indemnity of the Shipowning Guarantors referred
to in Clause 10.3.
1.1.79 "the Shipowning Guarantors" means the companies listed in
Schedule 4, each of which is a company incorporated according
to the law of the country indicated against its name in
Schedule 4 with its registered office
14
and/or principal place of business at the address indicated
against its name in Schedule 4 (each "a Shipowning
Guarantor").
1.1.80 "Short Term Permitted Indebtedness" means any indebtedness of
the SO Group (other than intercompany indebtedness of the SO
Group and/or the SNSA Group) incurred for working capital and
short term liquidity in an amount of up to seventy five
million Dollars ($75,000,000).
1.1.81 "SMC" in relation to any Vessel, means a valid safety
management certificate issued for the Vessel by or on behalf
of the Administration pursuant to paragraph 13.4 of the ISM
Code.
1.1.82 "SMS" in relation to any Vessel, 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 required by the ISM Code.
1.1.83 "SNSA" means Xxxxx-Xxxxxxx S.A. a company incorporated
according to the law of Luxembourg with its registered office
at 00 Xxxxxx Xxxxxxxx, X-0000 Xxxxxxxxxx.
1.1.84 "SNSA Group" means SNSA and its Subsidiaries.
1.1.85 "SO Group" means the Guarantor and its Subsidiaries.
1.1.86 "Subordinated Debt" means any debt from any member(s) of the
SNSA Group upon the terms contained in a Subordinated Loan
Agreement.
1.1.87 "Subordinated Loan Agreement" means an agreement, approved by
the Banks in writing, which sets out the terms and conditions
upon which any Subordinated Debt is to be incurred and
subordinated to the Facility and includes, without limitation,
a prohibition on the repayment of principal of such
Subordinated Debt unless such Subordinated Debt is to be
replaced by equity.
15
1.1.88 "Subsidiary" means a subsidiary undertaking, as defined in
section 258 Companies Act 1985 or any analogous definition
under any other relevant system of law.
1.1.89 "Surety" means any person (other than the Borrower or the
Guarantor) who has given or who may in the future give to the
Finance Parties or any of them any security, guarantee or
indemnity for or in relation to the Borrower's Obligations.
1.1.90 "Taxes" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related
interest and penalties) and any restrictions or conditions
resulting in any charge, other than taxes on the overall net
income of a Finance Party or branch thereof, and "Tax" and
"Taxation" shall be interpreted accordingly.
1.1.91 "the Termination Date" means the date falling five (5) years
after the Execution Date.
1.1.92 "Total Loss", in relation to a Vessel means:-
(a) an actual, constructive, arranged, agreed or compromised
total loss of that Vessel; or
(b) the requisition for title, compulsory acquisition,
nationalisation or expropriation of that Vessel by or on
behalf of any government or other authority (other than
by way of requisition for hire); or
(c) the capture, seizure, arrest, detention or confiscation
of that Vessel, unless the Vessel is released and
returned to the possession of the relevant Shipowning
Guarantor within two months after the capture, seizure,
arrest, detention or confiscation in question.
1.1.93 "Transfer Certificate" means a certificate materially in the
form set forth in Schedule 6 signed by a Bank and a Transferee
whereby:
16
(a) such Bank seeks to procure the transfer to such
Transferee of all or a part of such Bank's rights and
obligations under this Agreement upon and subject to the
terms and conditions set out in Clause 16; and
(b) such Transferee undertakes to perform the obligations it
will assume as a result of delivery of such certificate
to the Agent as is contemplated in Clause 16.
1.1.94 "Transfer Date" means, in relation to any Transfer
Certificate, the date for the making of the transfer specified
in the schedule to such Transfer Certificate.
1.1.95 "Transferee" means a bank or other financial institution to
which a Bank seeks to transfer all or part of such Bank's
rights and obligations under this Agreement.
1.1.96 "the Trust Property" means:-
(a) the benefit of the covenant contained in Clause 10; and
(b) all benefits arising under (including, without
limitation, all proceeds of the enforcement of) each of
the Security Documents (other than this Agreement), with
the exception of any benefits arising solely for the
benefit of the Agent).
1.1.97 "US GAAP" means the generally accepted accounting principles
in the United States of America, from time to time in effect,
subject to any changes in the rules of US GAAP, consistently
applied always provided that if the Guarantor wishes to change
accounting principles within the applicable rules of US GAAP,
the Borrower shall notify the Agent of the intention together
with an explanation of the effects on the financial covenants
contained in this Agreement. Should the Banks, and/or the
Guarantor, find that such change will impact upon the result
of the
17
calculation of the financial covenants contained in this
Agreement, the Banks will, following consultation with the
Guarantor, stipulate amendments to the financial covenants so
that the ratio of SO Group's performance in respect of the
covenants reflects the position which would have been the case
had no changes to the Guarantor's accounting principles taken
place.
1.1.98 "Valuation" means in relation to a Vessel, the arithmetic mean
of the written valuations of that Vessel expressed in Dollars
prepared by two firms of reputable independent shipbrokers,
one appointed by the Agent and the other appointed by the
Borrower, unless either the Agent or the Borrower disagrees
with such arithmetic average, in which event the two
shipbrokers shall appoint a third firm of reputable
independent shipbrokers and the valuation of the Vessel shall
be the arithmetic mean of all three such valuations. Such
valuations shall be prepared at the Borrower's expense,
without a physical inspection, on the basis of a sale for
prompt delivery for cash at arm's length between a willing
buyer and a willing seller without the benefit of any
charterparty or other engagement.
1.1.99 "the Vessels" means the vessels listed in Schedule 4 and
everything now or in the future belonging to them on board and
ashore (each a "Vessel").
1.2 Interpretation
In this Agreement:-
1.2.1 words denoting the plural number include the singular and vice
versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and
vice versa;
18
1.2.3 references to Recitals, Clauses, Schedules and Appendices are
references to recitals and clauses of, and schedules and
appendices to, this Agreement;
1.2.4 references to this Agreement include the Recitals, the
Schedules and the Appendices;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall
be ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation, to
all or any of the Security Documents) are, unless the context
otherwise requires, references to that document as amended,
supplemented, novated or replaced from time to time;
1.2.7 references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from
time to time amended, replaced or re-enacted;
1.2.8 references to any of the Finance Parties include its
successors, Transferees and assignees; and
1.2.9 references to times of day are to New York time.
1.3 Joint and several liability
1.3.1 All obligations, covenants, representations, warranties and
undertakings in or pursuant to the Security Documents assumed,
given, made or entered into by the Borrower and the Guarantor
shall, unless otherwise expressly provided, be assumed, given,
made or entered into by the Borrower and the Guarantor jointly
and severally.
1.3.2 Each of the Borrower and the Guarantor agrees that any rights
which it may have at any time during the Facility Period by
reason of the
19
performance of its obligations under the Security Documents to
be indemnified by the other or by any Surety and/or to take
the benefit of any security taken by the Finance Parties
pursuant to the Security Documents shall be exercised in such
manner and on such terms as the Agent may require. Each of the
Borrower and the Guarantor agrees to hold any sums received by
it as a result of its having exercised any such right on trust
for the Agent (as agent for the Banks) absolutely.
1.3.3 Each of the Borrower and the Guarantor agrees that it will not
at any time during the Facility Period claim any set-off or
counterclaim against the other or against any Surety in
respect of any liability owed to it by the other or by any
Surety under or in connection with the Security Documents, nor
prove in competition with any Finance Party in any liquidation
of (or analogous proceeding in respect of) the other or of any
Surety in respect of any payment made under the Security
Documents or in respect of any sum which includes the proceeds
of realisation of any security held by any of the Finance
Parties for the repayment of the Indebtedness.
2 The Facility and its Purpose
2.1 Agreement to lend Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of the
Security Documents, each of the Banks agrees to advance to the
Borrower its Commitment of an aggregate principal amount not
exceeding the Maximum Facility Amount to be used by the Borrower for
the purposes referred to in Recital (B).
2.2 Drawings Subject to satisfaction by the Borrower of the conditions
set out in Clause 3.1 (in respect of the first Drawing), Clause 3.3
(in respect of all subsequent Drawings), and subject to Clause 2.3,
and provided that the maximum aggregate amount of the Facility
Outstandings at any given time during the Facility Period shall not
exceed the Maximum Facility Amount, each Drawing shall be advanced
to the Borrower, in each case by the Agent transferring the amount
of the Drawing to such account of the Borrower as the Borrower shall
20
notify to the Agent in the relevant Drawdown Notice by such same day
method of funds transfer as the Agent shall select.
2.3 Advance of Drawings Each Drawing shall be advanced in Dollars, or in
any other Permitted Currency selected in accordance with Clause 5.1.
Each Drawing shall be advanced on a Business Day, provided that the
Borrower shall have given to the Agent not more than ten and not
fewer than four Business Days' notice in writing materially in the
form set out in Appendix A of the required Advance Date of the
Drawing in question. Each Drawdown Notice once given shall be
irrevocable and shall constitute a warranty by the Borrower that:-
2.3.1 all conditions precedent to the advance of the Drawing
requested in that Drawdown Notice will have been satisfied on
or before the Advance Date requested;
2.3.2 no Event of Default or Potential Event of Default has occurred
or will then have occurred; and
2.3.3 no Event of Default or Potential Event of Default will result
from the advance of the Drawing in question.
The Agent shall promptly notify each Bank of the receipt of each
Drawdown Notice, following which each Bank will make its
Proportionate Share of the amount of the requested Drawing available
to the Borrower through the Agent on the Advance Date requested.
2.4 Facility Reduction
2.4.1 The amount of the Facility available to the Borrower for
drawing under this Agreement shall be four hundred and forty
million Dollars ($440,000,000) or the Equivalent Amount in any
other Permitted Currency during the period from the Execution
Date until the First Reduction Date. On the First Reduction
Date the amount of the Facility available for drawing shall
reduce to three hundred and eighty five million Dollars
($385,000,000). On the Second Reduction Date the amount of the
21
Facility available for drawing shall reduce to three hundred
and thirty million Dollars ($330,000,000). On the Termination
Date the Facility available shall be reduced to zero. The
mandatory reductions in the amount of the Facility available
for drawing required pursuant to this Clause will be made in
the amounts and at the times specified (subject to Clause
2.4.2) whether or not the Maximum Facility Amount is reduced
pursuant to Clause 2.4.3, Clause 6.6 or Clause 17.8.
2.4.2 The Borrower may voluntarily reduce the Maximum Facility
Amount in whole or in part in multiples of two million Dollars
($2,000,000), where applicable provided that it has first
given to the Agent not fewer than fourteen (14) days' prior
written notice expiring on a Business Day of its desire to
reduce the Maximum Facility Amount. Any such reduction in the
Maximum Facility Amount shall not be reversed. Any voluntary
reduction in the Maximum Facility Amount pursuant to this
Clause shall be applied to the remaining mandatory reductions
under Clause 2.4.1 on a pro rata basis.
2.4.3 In the event of a sale or disposal of a Vessel (subject to the
penultimate sentence contained in Clause 12.2.21) the Maximum
Facility Amount shall reduce by an amount equal to the
proportion that a current Valuation for such Vessel bears to
the aggregate total amount of the current Valuations for the
remaining Vessels and the Vessel sold or disposed of pursuant
to this Clause.
2.4.4 To the extent that repayments or prepayments made by the
Borrower to the Agent in accordance with this Agreement reduce
the Facility Outstandings to less than the Maximum Facility
Amount, the Borrower shall again be entitled to make Drawings
in accordance with and subject to the terms of this Agreement.
2.4.5 Simultaneously with each reduction of the Maximum Facility
Amount in accordance with Clause 2.4.1, Clause 2.4.2 or Clause
2.4.3 (as the case may be), the Commitment of each Bank will
reduce so that the
22
Commitments of the Banks in respect of the reduced Maximum
Facility Amount remain in accordance with their respective
Proportionate Shares.
2.5 Restrictions on Drawings The Borrower shall not be entitled to make
more than three Drawings on any Business Day and no more than ten
(10) Drawings may be outstanding at any one time during the Facility
Period. Each Drawing shall be of an amount of not less than five
million Dollars ($5,000,000) or the Equivalent Amount in any other
Permitted Currency. If at any time during the Facility Period the
Original Dollar Amount exceeds the Maximum Facility Amount then
available or if a proposed Drawing when added to the Original Dollar
Amount would result in the Maximum Facility Amount being exceeded
then the Borrower shall immediately pay to the Agent on behalf of
the Banks such amount as will ensure that the Original Dollar Amount
is equal to or less than the Maximum Facility Amount then available.
2.6 Termination Date No Bank shall be under any obligation to advance
all or any part of its Commitment after the Termination Date.
2.7 Several obligations The obligations of the Banks under this
Agreement are several. The failure of a Bank to perform its
obligations under this Agreement shall not affect the obligations of
the Borrower to any Finance Party nor shall any Finance Party be
liable for the failure of another Bank to perform any of its
obligations under or in connection with this Agreement.
2.8 Application of Facility Without prejudice to the obligations of the
Borrower under this Agreement, no Finance Party shall be obliged to
concern itself with the application of the Facility by the Borrower.
2.9 Loan facility and control accounts The Agent will open and maintain
such loan facility account or such other control accounts as the
Agent shall in its discretion consider necessary or desirable in
connection with the Facility.
23
3 Conditions Precedent and Subsequent
3.1 Conditions Precedent - First Drawing Before any Bank shall have any
obligation to advance the first Drawing under the Facility, the
Borrower shall pay to the Agent the relevant fees referred to in
Clause 9 and the Fee Letters and deliver or cause to be delivered to
or to the order of the Agent the following documents and evidence:-
3.1.1 Evidence of incorporation Such evidence as the Agent may
reasonably require that each Security Party was duly
incorporated in its country of incorporation and remains in
existence and, where appropriate, in good standing, with power
to enter into, and perform its obligations under, those of the
Security Documents to which it is, or is intended to be, a
party, including (without limitation) a copy, certified by a
director or an officer of the Security Party in question as
true, complete, accurate and unamended, of all documents
establishing or limiting the constitution of each Security
Party.
3.1.2 Corporate authorities A copy, certified by a director or the
secretary of the Security Party in question as true, complete,
accurate and neither amended nor revoked, of a resolution of
the directors and (other than the Guarantor) a resolution of
the shareholders of each Security Party (together, where
appropriate, with signed waivers of notice of any directors'
or shareholders' meetings) approving, and authorising or
ratifying the execution of, those of the Security Documents
and each Drawdown Notice to which that Security Party is or is
intended to be a party and all matters incidental thereto.
3.1.3 Officer's certificate A certificate (i) signed by a duly
authorised officer of each of the Security Parties setting out
the names of the directors, officers and (other than the
Guarantor) shareholders of that Security Party and (ii) issued
by each Security Party's company registry confirming due
incorporation and valid existence and (when such information
is maintained by the registry) the names of its directors and
shareholders.
24
3.1.4 Power of attorney The power of attorney (notarially attested
and legalised, if necessary, for registration purposes) of
each of the Security Parties under which any documents are to
be executed or transactions undertaken by that Security Party.
3.1.5 Vessel documents Photocopies, certified as true, accurate and
complete by a director or the secretary of the Shipowning
Guarantor of (in respect of each Vessel):-
(a) any time charterparty or bareboat charterparty of that
Vessel which will be in force on the first Advance Date
and which exceeds twelve (12) months duration which is
entered into with an entity which is not a member of the
SO Group;
(b) the Management Agreement relating to that Vessel which
is in force at the time of this Agreement; and
(c) that Vessel's current Safety Construction, Safety
Equipment, Safety Radio and Load Line Certificates;
(d) if required by law and that Vessel is operating in the
waters of the United States of America, that Vessel's
current Certificate of Financial Responsibility issued
pursuant to the United States Oil Pollution Xxx 0000;
(e) where applicable, that Vessel's current SMC; and
(f) where applicable, each Company's current DOC
in each case together with all addenda, amendments or
supplements.
3.1.6 Evidence of ownership In respect of each Vessel,
certificate(s) of ownership and encumbrance (or equivalent)
issued by the Registrar of Ships (or equivalent official) at
the Vessel's port of registry confirming
25
that such Vessel is on the first Advance Date owned by her
Shipowning Guarantor and free of registered Encumbrances.
3.1.7 Evidence of insurance Evidence that each Vessel is insured in
the manner required by the Security Documents and that letters
of undertaking will be issued in the manner required by the
Security Documents, together with (if required by the Agent)
the written approval of the Insurances by an insurance adviser
appointed by the Agent.
3.1.8 Confirmation of class A Certificate of Confirmation of Class
for hull and machinery (dated not more than seven days before
the first Advance Date) confirming that each Vessel is classed
with the highest applicable class necessary to properly
operate such Vessel of Lloyd's Register of Shipping, Det
norske Veritas, the American Bureau of Shipping or such other
classification society as may be acceptable to the Agent.
3.1.9 Valuations A Valuation of each Vessel addressed to the Agent.
3.1.10 The Security Documents The Security Documents, together with
all notices and other documents required by any of them, duly
executed and, in the case of the Mortgages, registered with
first priority through the Registrar of Ships (or equivalent
official) at the port of registry of the Vessel concerned.
3.1.11 Drawdown Notice A Drawdown Notice.
3.1.12 Process agent A letter from Xxxxx Offshore M.S. Limited
accepting their appointment by each of the Security Parties as
agent for service of Proceedings pursuant to the Security
Documents.
3.1.13 Managers' subordination confirmation letter The written
confirmation of the Managers that they will (i) remain the
commercial and technical managers of the Vessels throughout
the Facility Period and will manage the Vessels in accordance
with good standard ship management practice
26
and (ii) subordinate all their rights in relation to the
Vessels to those of the Finance Parties.
3.1.14 The Fee Letters The Fee Letters countersigned on behalf of the
Borrower and the Guarantor by way of acceptance of their
terms.
3.1.15 Legal opinions Confirmation satisfactory to the Agent that all
legal opinions required by the Agent on behalf of the Banks
will be given substantially in the form required by the Agent
on behalf of the Banks.
3.1.16 Accounts The consolidated audited accounts of the Guarantor
for its financial year just ended, certified, by a director or
the chief financial officer of Xxxxx Comex Seaway M.S. Limited
as agent for the Guarantor, as fair and accurate.
3.1.17 Material Adverse Change Evidence that no material adverse
change has occurred, since 31 May 2000, in the business,
assets, operations, conditions (financial or otherwise) or
prospects of the Guarantor or its Subsidiaries or in the facts
and information regarding such entities as represented to
date.
3.1.18 Corporate Structure Evidence of the actual corporate structure
and financial condition of the SO Group to be delivered to and
acceptable to the Arrangers.
3.1.19 Margin Such evidence as the Agent shall require in order to
set the Margin.
3.2 Conditions Subsequent The Borrower undertakes to deliver or to cause
to be delivered to the Agent on, or as soon as practicable after,
the first Advance Date, the following additional documents and
evidence:-
3.2.1 Evidence of registration Evidence of registration of the
Mortgages, in each case with first priority with the Registrar
of Ships (or equivalent official) at the port of registry of
the Vessel concerned.
27
3.2.2 Letters of undertaking Letters of undertaking as required by
the Security Documents in form and substance acceptable to the
Agent.
3.2.3 Legal opinions Such legal opinions as the Agent on behalf of
the Banks shall require pursuant to Clause 3.1.15.
3.2.4 Companies Act registrations Evidence that the prescribed
particulars of the Security Documents have been delivered to
the Registrar of Companies of (i) England and Wales, (ii)
Bermuda and (iii) the Isle of Man within the statutory time
limit.
3.2.5 Master's receipts The master's receipt for each of the
relevant Mortgages.
3.2.6 Management Agreements Within three months of the Execution
Date (or such later date as the Agent in its discretion may
agree) Management Agreements in relation to all the Vessels
where such agreements were not delivered to the Agent pursuant
to Clause 3.1.5(b).
3.3 Conditions Precedent - Subsequent Drawings Before any Bank shall
have any obligation to advance any subsequent Drawings under the
Facility, the Borrower shall deliver or cause to be delivered to the
order of the Agent, a Drawdown Notice, in addition to the documents
and evidence referred to in Clause 3.1 where such documents and
evidence have not already been delivered to and received by the
Agent.
3.4 No waiver If the Banks in their sole discretion agree to advance any
part of the Facility to the Borrower before all of the documents and
evidence required by Clause 3.1 or Clause 3.3 (as the case may be)
have been delivered to or to the order of the Agent, the Borrower
undertakes to deliver all outstanding documents and evidence to or
to the order of the Agent no later than the date specified by the
Agent, and the advance of any part of the Facility shall not be
taken as a waiver of the Agent's right to require production of all
the documents and evidence required by Clause 3.1 or Clause 3.3 (as
the case may be).
28
3.5 Form and content All documents and evidence delivered to the Agent
pursuant to this Clause shall:-
3.5.1 be in form and substance acceptable to the Agent;
3.5.2 be accompanied, if required by the Agent, by translations into
the English language, certified in a manner acceptable to the
Agent;
3.5.3 if required for registration purposes, be certified,
notarised, legalised or attested in a manner acceptable to the
Agent.
3.6 Event of Default No Bank shall be under any obligation to advance
any part of its Commitment nor to act on any Drawdown Notice if, at
the date of the Drawdown Notice or at the date on which the advance
of a Drawing is requested in the Drawdown Notice, an Event of
Default or Potential Event of Default shall have occurred, or if an
Event of Default or Potential Event of Default would result from the
advance of the Drawing in question.
4 Representations and Warranties
Each of the Borrower and the Guarantor represents and warrants to each of
the Finance Parties at the date of this Agreement and (by reference to the
facts and circumstances then pertaining) at the date of each Drawdown
Notice, at each Advance Date and at each Interest Payment Date as follows
(except that the representation and warranty contained at Clause 4.6 and
Clause 4.14 shall only be made on the first Advance Date):-
4.1 Incorporation and capacity Each of the Security Parties is a body
corporate duly constituted, organised and validly existing and
(where applicable) in good standing under the law of its country of
incorporation, in each case with perpetual corporate existence and
the power to xxx and be sued, to own its assets and to carry on its
business, and all of the corporate shareholders (if any) of each
Security Party (other than the Guarantor) are duly constituted and
existing under the laws of their countries of incorporation with
perpetual corporate existence and
29
the power to xxx and be sued, to own their assets and to carry on
their business and are acting on their own account.
4.2 Solvency None of the Security Parties is insolvent or in liquidation
or administration or subject to any other insolvency procedure, and
no receiver, administrative receiver, administrator, liquidator,
trustee or analogous officer has been appointed in respect of any of
the Security Parties or all or any part of their assets except if
such insolvency should arise in relation to a Shipowner in the
circumstances where a demand has been made under the Shipowner's
Guarantee. For this purpose a Security Party will be deemed
insolvent if it is unable to pay its debts within the meaning of
S.123 of the Insolvency Xxx 0000 save in relation to the exception
referred to in the previous sentence.
4.3 Binding obligations The Security Documents when duly executed and
delivered will constitute the legal, valid and binding obligations
of the Security Parties enforceable in accordance with their
respective terms subject to applicable laws regarding creditors'
rights in general.
4.4 Satisfaction of conditions All acts, conditions and things required
to be done and satisfied and to have happened prior to the execution
and delivery of the Security Documents in order to constitute the
Security Documents the legal, valid and binding obligations of the
Security Parties in accordance with their respective terms have been
done, satisfied and have happened in compliance with all applicable
laws.
4.5 Registrations and consents With the exception only of the
registrations referred to in Clause 3.2, all (if any) consents,
licences, approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency which
may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents
have been obtained or made and remain in full force and effect and
neither the Borrower nor the Guarantor is aware of any event or
circumstance which could reasonably be expected adversely to affect
the right of any of the Security Parties (as the case may be) to
hold and/or obtain renewal of any such consents, licences, approvals
or authorisations.
30
4.6 Disclosure of material facts Neither the Borrower nor the Guarantor
is aware of any material facts or circumstances which have not been
disclosed to the Agent and which might, if disclosed, have
reasonably been expected to adversely affect the decision of a
person considering whether or not to make loan facilities of the
nature contemplated by this Agreement available to the Borrower.
4.7 No material litigation Except for those matters disclosed in writing
to the Agent, there is no action, suit, arbitration or
administrative proceeding nor any contemplated action, suit,
arbitration or administrative proceeding pending or to its knowledge
about to be pursued before any court, tribunal or governmental or
other authority which would, or would be likely to, have a
materially adverse effect on the business, assets, financial
condition or creditworthiness of the SO Group.
4.8 No breach of law or contract The execution, delivery and performance
of the Security Documents will not contravene any contractual
restriction or any law binding on any of the Security Parties or on
any shareholder (whether legal or beneficial) of any of the Security
Parties (other than the Guarantor), or the constitutional documents
of any of the Security Parties, nor result in the creation of, nor
oblige any of the Security Parties to create, any Encumbrance over
all or any of its assets, with the exception of the Encumbrances
created by or pursuant to the Security Documents.
4.9 No deductions Except as disclosed to the Agent in writing, that to
the best of their knowledge belief and without undue enquiry, none
of the Security Parties is required to make any deduction or
withholding from any payment which it may be obliged to make to any
of the Finance Parties under or pursuant to the Security Documents.
4.10 No established place of business in the United Kingdom or United
States Save in respect of the Shipowning Guarantors referred to in
Schedule 4 whose registered office or principal place of business is
in the United Kingdom none of the Security Parties has, at the date
of this Agreement, an established place of business in the United
Kingdom or the United States of America. The addresses
31
of the relevant Shipowning Guarantor's principal place of business
where specified in Schedule 4 is correct as at the date of this
Agreement.
4.11 Use of Facility The Facility will be used for the purposes specified
in Recital (B).
4.12 Subsidiaries Save as a result of any merger or amalgamation effected
pursuant to Clause 12.1.4, each of the Shipowning Guarantors is and
will remain throughout the Facility Period a directly or indirectly
wholly owned subsidiary of the Guarantor.
4.13 Non-Resident Status SCS Shipping Limited is and will throughout the
Facility Period continue to be a non-resident company within the
meaning of the Non-Resident Company Duty Act 1986 as amended or
substituted and each of the Security Parties are and will remain
throughout the Facility Period non-resident in the Isle of Man for
tax purposes.
4.14 Material Adverse Change There has been no material adverse change in
the financial condition of the Borrower or the Guarantor since
delivery to the Agent of the Guarantor's consolidated unaudited
accounts for the period ending 31 May 2000.
4.15 Finance company Status That (i) the Borrower complies with and shall
throughout the Facility Period continue to comply (to the extent
applicable), with the regulations of the Netherlands Ministry of
Finance dated 4 February 1993 with respect to finance companies and
that the application of the Facility is and will throughout the
Facility Period continue to be in accordance with such regulations
and (ii) all notice requirements to the Dutch central bank pursuant
to the Foreign Financial Relations Act ("Wet Financiele Betrekkingen
Buitenland") 1994 have been complied with and shall throughout the
Facility Period continue to be complied with.
4.16 Guarantor's company Status That the Guarantor operates as a
financial holding company under Luxembourg law pursuant to the terms
of a letter of the "Administration de l'Enregistrement et des
Domaines" dated 9 September 1994.
32
5 Currency
5.1 Selection of Permitted Currency The Borrower may from time to time
in accordance with this Clause select the Permitted Currency in
which it wishes a Drawing to be denominated. Any such selection made
by the Borrower shall be contained in the Drawdown Notice relating
to the Drawing in question. Once a Permitted Currency in respect of
a Drawing is selected such Drawing shall remain denominated in such
Permitted Currency until its repayment in accordance with this
Agreement.
5.2 Conditions precedent to denomination in a Permitted Currency The
denomination of a Drawing in a Permitted Currency pursuant to this
Clause shall be subject to the following:-
5.2.1 no Drawing may at any time during the Facility Period be
denominated in more than one Permitted Currency and any notice
requesting denomination of the Drawing in more than one
Permitted Currency shall be of no effect; and
5.2.2 denomination of a Drawing in the Permitted Currency selected
by the Borrower shall not be effected if the Agent certifies
by notice in writing to the Borrower, which notice shall be
final and conclusive, that deposits in the Permitted Currency
selected for the amount of the relevant Drawing and for the
Interest Period selected are not available to the Banks in the
normal course of business in the London Interbank market on
the relevant date.
5.3 Non-availability of Permitted Currency If, in any Permitted Currency
selected, deposits of the specified amount and for the specified
Interest Period are not available to any of the Banks in the normal
course of business in the London Interbank market on the relevant
date, or if the Borrower fails to specify a Permitted Currency for a
Drawing, that Drawing shall be denominated in Dollars for the
duration of the relevant Interest Period.
33
5.4 Repayment During each Interest Period in which a Drawing is
denominated in a Permitted Currency other than Dollars, the
obligation of the Borrower to repay the Drawing and to pay interest
shall be an obligation to repay that Drawing and to pay interest on
that Drawing in the Permitted Currency in which the Drawing is then
denominated, whether or not the Facility Outstandings or any part
thereof shall have become repayable by acceleration or otherwise.
5.5 Further assurance The Borrower shall execute or procure the
execution of such further documents as the Agent may reasonably
require from time to time in order to preserve and maintain the
validity of the Security Documents as full security for the
repayment of the Indebtedness.
5.6 Currency Fluctuations If on the last day of an Interest Period the
Agent shall determine that the Equivalent Amount of any Drawing
after repayment is greater than 100% of the Original Dollar Amount,
the Borrower shall immediately pay to the Agent, on behalf of the
Banks an amount in the relevant Permitted Currency equal to the
excess of such Equivalent Amount over the Original Dollar Amount.
6 Repayment and Prepayment
6.1 Repayment Each Drawing shall be repaid by the Borrower to the Agent
on behalf of the Banks on the last day of its Interest Period unless
the Borrower selects a further Interest Period for that Drawing in
accordance with Clause 7, provided that the Borrower shall not be
permitted to select such further Interest Period if an Event of
Default or Potential Event of Default has occurred and shall then be
obliged to repay such Drawing on the last day of its then current
Interest Period. In addition, the Borrower shall from time to time
repay to the Agent as agent for the Banks such amounts of the
Facility Outstandings as will ensure that the Original Dollar Amount
does not exceed the Maximum Facility Amount then available. The
Borrower shall on the Termination Date repay to the Agent as agent
for the Banks all Facility Outstandings.
6.2 Prepayment The Borrower may prepay the Facility Outstandings in
whole or in part in multiples of two million Dollars ($2,000,000),
or its Equivalent Amount in a Permitted Currency where applicable,
(or as otherwise may be agreed by the
34
Agent) provided that it has first given to the Agent not fewer than
fourteen (14) days' prior written notice expiring on a Business Day
of its intention to do so. Any notice pursuant to this Clause 6.2
once given shall be irrevocable and shall oblige the Borrower to
make the prepayment referred to in the notice on the Business Day
specified in the notice, together with all interest accrued on the
amount prepaid up to and including that Business Day.
6.3 Prepayment indemnity If the Borrower shall, subject always to Clause
6.2, make a prepayment on a Business Day other than the last day of
an Interest Period, it shall pay to the Agent on behalf of the Banks
any amount which is necessary to compensate the Banks for any Break
Costs incurred by the Agent or any of the Banks as a result of the
prepayment in question.
6.4 Application of prepayments Any prepayment in an amount less than the
Indebtedness shall be applied in satisfaction or reduction first of
any costs and other expenses outstanding; secondly of all interest
accrued with respect to the outstanding Drawings in the currency in
which the prepayment is to be made; thirdly of the outstanding
Drawings in the currency in which the prepayment is to be made in
inverse order of maturity, fourthly of all other interest accrued;
and fifthly of all other outstanding Drawings in inverse order of
maturity.
6.5 Reborrowing of prepayments Any amount prepaid pursuant to this
Agreement may be reborrowed in accordance with Clause 2.4.4 and
subject to compliance with Clause 12.2.2.
6.6 Total Loss In the event that any Vessel becomes a Total Loss, on the
date of such Total Loss occurring, the Maximum Facility Amount shall
reduce by the Pro Rata Insurance Proceeds Amount in respect of such
Vessel. Any such reductions in the Maximum Facility Amount shall not
be reversed. If, as a result of any reduction in the Maximum
Facility Amount pursuant to this Clause the Original Dollar Amount
exceeds the Maximum Facility Amount, the Borrower shall, on the
earlier to occur of (a) the one hundred and eightieth day after the
date of such Total Loss occurring and (b) the date on which the
Shipowning Guarantor receives the proceeds of such Total Loss,
prepay such amount of the Original Dollar Amount as will ensure that
the Original Dollar Amount is not greater than
35
the Maximum Facility Amount. Any such prepayment shall not be
reborrowed, and Clause 6.3 shall apply to any such prepayment.
7 Interest
7.1 Interest Periods The period during which any Drawing shall be
outstanding pursuant to this Agreement shall be divided into
consecutive Interest Periods of one, two, three or six months'
duration, as selected by the Borrower by written notice to the Agent
not later than 11.00 a.m. on the fourth Business Day before the
beginning of the Interest Period in question, or such other duration
as may be agreed by the Banks in their discretion. No more than
three one (1) month Interest Periods may be selected by the Borrower
in each calendar year during the Facility Period.
7.2 Beginning and end of Interest Periods The first Interest Period in
respect of each Drawing shall begin on the Advance Date of that
Drawing and shall end on the last day of the Interest Period
selected in accordance with Clause 7.1. Any subsequent Interest
Period selected in respect of each Drawing shall commence on the day
following the last day of its previous Interest Period and shall end
on the last day of its current Interest Period selected in
accordance with Clause 7.1. However, in respect of any Drawings
outstanding on the Termination Date, the Interest Period applicable
to such Drawings shall end on the Termination Date.
7.3 Interest rate During each Interest Period, interest shall accrue on
each Drawing at the rate determined by the Agent to be (i) for the
first six months following the Execution Date, the aggregate of (a)
the higher of the applicable Margin or one point five per centum
(1.50%) (b) LIBOR and, (c) if applicable the Additional Rate, and
(ii) thereafter, the aggregate of (a) the applicable Margin, (b)
LIBOR and, if applicable, (c) the Additional Rate for the remainder
of the Facility Period, determined in each case, at or about 11.00
a.m. on the second Business Day prior to the beginning of the
Interest Period relating to that Drawing.
7.4 Accrual and payment of interest During the Facility Period, interest
shall accrue from day to day, shall be calculated on the basis of a
360 day year and the actual number of days elapsed (or, in any
circumstance where market practice
36
differs, in accordance with the prevailing market practice) and
shall be paid by the Borrower to the Agent on behalf of the Banks on
the last day of each Interest Period and additionally, during any
Interest Period exceeding three months, on the last day of each
successive three month period after the beginning of that Interest
Period.
7.5 Ending of Interest Periods If any Interest Period would end on a day
which is not a Business Day, that Interest Period shall end on the
next succeeding Business Day (unless the next succeeding Business
Day falls in the next calendar month, in which event the Interest
Period in question shall end on the next preceding Business Day).
7.6 Default Rate If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event of
Default, bear interest up to the date of actual payment (both before
and after judgment) at the Default Rate, compounded at such
intervals as the Agent shall in its reasonable discretion determine,
which interest shall be payable from time to time by the Borrower to
the Agent on behalf of the Banks on demand.
7.7 Determinations conclusive Each determination of an interest rate
made by the Agent in accordance with Clause 7 shall (save in the
case of manifest error or on any question of law) be final and
conclusive.
8 Guarantee and Indemnity
8.1 The Borrower's Obligations
In consideration of the agreement of the Banks to make the Facility
available to the Borrower, the Guarantor:-
8.1.1 irrevocably and unconditionally guarantees to discharge on
demand the Borrower's Obligations, including Interest from the
date of demand until the date of payment, both before and
after judgement; and
37
8.1.2 agrees, as a separate and independent obligation, that, if any
of the Borrower's Obligations are not recoverable from the
Guarantor under Clause 8.1.1 for any reason, the Guarantor
will be liable to the Finance Parties as a principal debtor by
way of indemnity for the same amount as that for which the
Guarantor would have been liable had those Borrower's
Obligations been recoverable and agrees to discharge its
liability under this Clause 8.1.2 on demand together with
Interest from the date of demand until the date of payment,
both before and after judgement.
8.2 Continuing Security
The Guarantee is a continuing security for the full amount of the
Borrower's Obligations from time to time and shall remain in force
notwithstanding the liquidation of the Borrower or any change in the
constitution of the Borrower or of any Finance Party or the
absorption of or amalgamation by any Finance Party in or with any
other entity or the acquisition of all or any part of the assets or
undertaking of any Finance Party by any other entity.
8.3 Preservation of Guarantor's Liability
8.3.1 The Banks may without the Guarantor's consent and without
notice to the Guarantor and without in any way releasing or
reducing the Guarantor's Liabilities:-
(a) amend, novate, supplement or replace all or any of the
Borrower's Security Documents;
(b) increase or reduce the amount of the Facility or vary
the terms and conditions for its repayment or prepayment
(including, without limitation, the rate and/or method
of calculation of interest payable on the Facility);
(c) allow to the Borrower or to any other person any time or
other indulgence;
38
(d) renew, vary, release or refrain from enforcing any of
the Borrower's Security Documents or any other security,
guarantee or indemnity which the Agent may now or in the
future hold from the Borrower or from any other person;
(e) compound with the Borrower or any other person;
(f) enter into, renew, vary or terminate any other agreement
or arrangement with the Borrower or any other person; or
(g) make any concession to the Borrower or do or omit or
neglect to do anything which might, but for this
provision, operate to release or reduce the liability of
the Guarantor under the Guarantee.
8.3.2 The liability of the Guarantor under the Guarantee shall not
be affected by:-
(a) the absence of or any defective, excessive or irregular
exercise of any of the powers of the Borrower or of any
Surety;
(b) any security given or payment made to the Finance
Parties or any of them by the Borrower or any other
person being avoided or reduced under any law (whether
English or foreign) relating to bankruptcy or insolvency
or analogous circumstance in force from time to time;
(c) the liquidation, administration, receivership or
insolvency of the Guarantor;
(d) any other security, guarantee or indemnity now or in the
future held by the Finance Parties or any of them being
defective, void or unenforceable, or the failure of the
any Finance Party to take any security, guarantee or
indemnity;
(e) any compromise or arrangement under Part I or Part VII
of the Insolvency Xxx 0000 or section 425 of the
Companies Xxx 0000
39
(or any statutory modification or re-enactment of either
of them for the time being in force) or under any
analogous provision of any foreign law;
(f) the novation of any of the Borrower's Obligations;
(g) anything which would not have released or reduced the
liability of the Guarantor to the Finance Parties had
the liability of the Guarantor under Clause 8.1.1 been
as a principal debtor of the Finance Parties and not as
a guarantor.
8.4 Preservation of Banks' Rights
8.4.1 The Guarantee is in addition to any other security, guarantee
or indemnity now or in the future held by the Finance Parties
in respect of the Borrower's Obligations, whether from the
Borrower, the Guarantor or any other person, and shall not
merge with, prejudice or be prejudiced by any such security,
guarantee or indemnity or any contractual or legal right of
each Finance Party.
8.4.2 Any release, settlement, discharge or arrangement relating to
the liabilities of the Guarantor under the Guarantee shall be
conditional on no payment, assurance or security received by
the Finance Parties in respect of the Borrower's Obligations
being avoided or reduced under any law (whether English or
foreign) in force from time to time relating to bankruptcy,
insolvency or any (in the opinion of the Agent) analogous
circumstance and after any such avoidance or reduction the
Finance Parties shall be entitled to exercise all of their
rights, powers, discretions and remedies under or pursuant to
the Guarantee and/or any other rights, powers, discretions or
remedies which they would otherwise have been entitled to
exercise, as if no release, settlement, discharge or
arrangement had taken place.
8.4.3 Following the discharge of the Borrower's Obligations, the
Finance Parties shall be entitled to retain any security which
they may hold for the
40
liabilities of the Guarantor under the Guarantee until the
Finance Parties are satisfied in their reasonable discretion
that they will not have to make any payment under any law
referred to in Clause 8.4.2.
8.4.4 Until all claims of the Finance Parties in respect of the
Borrower's Obligations have been discharged in full:-
(a) the Guarantor shall not be entitled to participate in
any security held or sums received by any Finance Party
in respect of all or any part of the Borrower's
Obligations;
(b) the Guarantor shall not stand in the place of, or be
subrogated for, any of the Finance Parties in respect of
any security nor take any step to enforce any claim
against the Borrower or any Surety (or the estate or
effects of any such person) nor claim or exercise any
right of set off or counterclaim against the Borrower or
any Surety nor make any claim in the bankruptcy or
liquidation of the Borrower or any Surety in respect of
any sums paid by the Guarantor to the Finance Parties or
any of them or in respect of any sum which includes the
proceeds of realisation of any security at any time held
by the Finance Parties or any of them in respect of all
or any part of the Guarantor's Liabilities; and
(c) the Guarantor shall not take any steps to enforce any
claim which it may have against the Borrower or any
Security Party without the prior written consent of the
Agent, and then only on such terms and subject to such
conditions as the Agent may impose.
8.4.5 The Guarantor's Liabilities shall be continuing for all
purposes (including Interest) and every sum of money which may
now or in the future be or become due or owing to the Finance
Parties by the Borrower under the Security Documents to which
the Borrower is a party (or which would have become due or
owing had it not been for the bankruptcy, liquidation or
insolvency of the Borrower) shall be deemed to continue due
and owing to the Finance Parties by the Borrower until such
sum is actually
41
repaid to the Finance Parties, notwithstanding the bankruptcy,
liquidation or insolvency of the Borrower.
8.4.6 The Finance Parties may, but shall not be obliged to, resort
for their own benefit to any other means of payment at any
time and in any order they think fit without releasing or
reducing the Guarantor's Liabilities.
8.4.7 The Finance Parties may enforce the Guarantee either before or
after resorting to any other means of payment or enforcement
and, in the latter case, without entitling the Guarantor to
any benefit from or share in any such other means of payment
for so long as the Borrower's Obligations have not been
discharged in full.
8.5 Other Security
The Guarantor confirms that it has not taken and will not take
without the prior written consent of the Agent (and then only on
such terms and subject to such conditions as the Agent may impose)
any security from the Borrower or from any Surety in connection with
the Guarantee and any security taken by the Guarantor in connection
with the Guarantee notwithstanding this Clause shall be held by the
Guarantor in trust for the Agent on behalf of the Finance Parties
absolutely as a continuing security for the Guarantor's Liabilities.
9 Fees
9.1 The Borrower shall pay to or to the order of the Agent the fees,
commissions and other sums referred to in the Fee Letters in the
amounts and on the dates set out in the Fee Letters.
9.2 The Borrower shall pay to the Agent Commitment Commission in Dollars
at the rate of one half of the applicable Margin per annum on any
undrawn part of the Facility after the Execution Date. The
Commitment Commission will accrue from day to day on the basis of a
360 day year and the actual number of days elapsed and shall be paid
quarterly in arrears from the Execution Date until the Termination
Date based upon the Margin in effect for the previous quarter with
42
the first such payment being due and payable on the date falling
three months after the Execution Date. Where any Commitment
Commission is due and payable prior to the first Advance Date the
applicable Margin shall be the Margin that would have applied to the
Facility if all or any part of the Facility had been advanced under
this Agreement.
10 Security Documents
As security for the repayment of the Indebtedness, the Borrower shall
execute and deliver to the Agent or cause to be executed and delivered to
the Agent, on or before the first Advance Date, the following Security
Documents in such forms and containing such terms and conditions as the
Agent shall require:-
10.1 the Mortgages and Deed of Covenants a first preferred and/or
priority mortgage together, where applicable, with collateral deed
of covenants over each Vessel;
10.2 the Assignments a deed of assignment of the Insurances, Earnings and
Requisition Compensation of each Vessel;
10.3 the Shipowners' Guarantee the joint and several guarantee and
indemnity of the Shipowning Guarantors;
10.4 the Factoring Agreement a factoring agreement in relation to the
assignment of Earnings contained in the Assignment over mv "SEAWAY
FALCON" to be made between Xxxxx Offshore A/S and the Agent.
11 Agency and Trust
11.1 Appointment Each of the Banks, the Arrangers and the Documentation
Agent appoints the Agent its agent for the purpose of administering
the Facility and the Security Documents and authorises the Agent and
its directors, officers, employees and agents acting on the
instructions from time to time of an Instructing Group, and subject
to Clauses 11.4 and 11.19, to execute the Security Documents on its
behalf and to exercise all rights, powers, discretions and remedies
vested in the Banks under or pursuant to the Security Documents,
together with all powers reasonably incidental to them.
43
11.2 Authority Each of the Banks and the Arrangers irrevocably authorises
the Agent, acting on the instructions from time to time of an
Instructing Group:-
11.2.1 to give or withhold any consents or approvals; and
11.2.2 to exercise, or refrain from exercising, any discretions; and
11.2.3 to collect, receive, release or pay any money;
under or pursuant to any of the Security Documents. In addition the
Agent may waive compliance by any Security Party with Clauses
12.1.2, 12.1.3, 12.2.3, 12.2.9, 13.1 and 19.2.3 with the prior
written consent of an Instructing Group. The Agent shall have no
duties or responsibilities as agent or as security trustee other
than those expressly conferred on it by the Security Documents and
shall not be obliged to act on any instructions if to do so would,
in the opinion of the Agent, be contrary to any provision of the
Security Documents or to any law, or would expose the Agent to any
actual or potential liability to any third party.
11.3 Trust The Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this
Clause, the Agent holds the Trust Property on trust for the Banks,
in accordance with their respective Proportionate Shares,
absolutely. Each of the Banks agrees that the obligations, rights
and benefits vested in the Agent in its capacity as security trustee
shall be performed and exercised in accordance with this Clause. The
Agent in its capacity as security trustee shall have the benefit of
all of the provisions of this Agreement benefiting it in its
capacity as agent for the Banks, and all the powers and discretions
conferred on trustees by the Trustee Xxx 0000 (to the extent not
inconsistent with this Agreement). In addition:-
11.3.1 the Agent (and any attorney, agent or delegate of the Agent)
may indemnify itself or himself out of the Trust Property
against all liabilities, costs, fees, damages, charges, losses
and expenses sustained or incurred by it or him in relation to
the taking or holding of any of the Trust Property or in
connection with the exercise or purported exercise
44
of the rights, trusts, powers and discretions vested in the
Agent or any other such person by or pursuant to the Security
Documents or in respect of anything else done or omitted to be
done in any way relating to the Security Documents; and
11.3.2 the Banks acknowledge that the Agent shall be under no
obligation to insure any property nor to require any other
person to insure any property and shall not be responsible for
any loss which may be suffered by any person as a result of
the lack or insufficiency of any insurance; and
11.3.3 the Agent and the Banks agree that the perpetuity period
applicable to the trusts declared by this Agreement shall be
the period of eighty years from the Execution Date.
11.4 Limitations on authority Except with the prior written consent of
each of the Banks, the Agent shall not be entitled to :-
11.4.1 release or vary any security given for the Borrower's
obligations under this Agreement; nor
11.4.2 except as otherwise provided in this Agreement, agree to waive
the payment of any sum of money payable by any of the Security
Parties under the Security Documents or waive, modify, vary or
otherwise amend or excuse performance by any of the Security
Parties of any material provision of the Security Documents;
nor
11.4.3 change the meaning of the expression "Instructing Group"; nor
11.4.4 exercise, or refrain from exercising, any discretion, or give
or withhold any consent, the exercise or giving of which is,
by the terms of this Agreement, expressly reserved to the
Banks; nor
11.4.5 extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security
Documents; nor
45
11.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the obligations
of a Bank under any of the Security Documents; nor
11.4.7 agree to change the currency in which any sum is payable under
the Security Documents (other than in accordance with the
terms of the Security Documents); nor
11.4.8 agree to amend this Clause 11.4; nor
11.4.9 agree to amend Clauses 1.1.58, 13.1 and 19.2.3.
11.5 Liability Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Banks or the Arrangers
for anything done or omitted to be done by the Agent under or in
connection with the Security Documents unless as a result of the
Agent's wilful misconduct or gross negligence.
11.6 Acknowledgement Each of the Banks and the Arrangers acknowledges
that:-
11.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents or
by any other person acting or purporting to act on behalf of
the Agent to induce it to enter into any of the Security
Documents;
11.6.2 it has made and will continue to make without reliance on the
Agent, and based on such documents and other evidence as it
considers appropriate, its own independent investigation of
the financial condition and affairs of the Security Parties in
connection with the making and continuation of the Facility;
11.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
46
11.6.4 the Agent shall not have any duty or responsibility at any
time to provide it with any credit or other information
relating to any of the Security Parties unless that
information is received by the Agent pursuant to the express
terms of the Security Documents.
Each of the Banks and the Arrangers agrees that it will not assert
nor seek to assert against any director, officer, employee or agent
of the Agent or against any other person acting or purporting to act
on behalf of the Agent any claim which it might have against them in
respect of any of the matters referred to in this Clause.
11.7 Limitations on responsibility The Agent shall have no responsibility
to any of the Security Parties or to the Banks or to the Arrangers
on account of:-
11.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the Security
Documents;
11.7.2 the financial condition of any of the Security Parties;
11.7.3 the completeness or accuracy of any statements,
representations or warranties made in or pursuant to any of
the Security Documents, or in or pursuant to any document
delivered pursuant to or in connection with any of the
Security Documents;
11.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any
document executed or delivered pursuant to or in connection
with any of the Security Documents.
11.8 The Agent's rights The Agent may:-
11.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to any
of the Security Documents are true and complete, unless, in
its capacity as the Agent, it has acquired actual knowledge to
the contrary; and
47
11.8.2 assume that no Event of Default or Potential Event of Default
has occurred unless, in its capacity as the Agent, it has
acquired actual knowledge to the contrary; and
11.8.3 rely on any document or Communication believed by it to be
genuine; and
11.8.4 rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers
selected or approved by it; and
11.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any of the Security
Parties on a certificate signed by or on behalf of that
Security Party; and
11.8.6 refrain from exercising any right, power, discretion or remedy
unless and until instructed to exercise that right, power,
discretion or remedy and as to the manner of its exercise by
the Banks (or, where applicable, by an Instructing Group) and
unless and until the Agent has received from the Banks any
payment which the Agent may require on account of, or any
security which the Agent may require for, any costs, claims,
expenses (including legal and other professional fees) and
liabilities which it considers it may incur or sustain in
complying with those instructions.
11.9 The Agent's duties The Agent shall:-
11.9.1 if requested in writing to do so by a Bank, make enquiry and
advise the Banks as to the performance or observance of any of
the provisions of the Security Documents by any of the
Security Parties or as to the existence of an Event of
Default; and
11.9.2 inform the Banks promptly of any Event of Default of which the
Agent has actual knowledge; and
48
11.9.3 inform the Banks promptly of any disclosures in writing
received by the Agent pursuant to Clause 4.7.
11.10 No deemed knowledge The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation
or warranty made or deemed repeated by any of the Security Parties
or actual knowledge of the occurrence of any Event of Default or
Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent.
11.11 Other business The Agent may, without any liability to account to
the Banks or the Arrangers, generally engage in any kind of banking
or trust business with any of the Security Parties or any of their
respective Subsidiaries or associated companies or with a Bank as if
it were not the Agent.
11.12 Indemnity The Banks shall, promptly on the Agent's request,
reimburse the Agent in their respective Proportionate Shares, for,
and keep the Agent fully indemnified in respect of:-
11.12.1 all amounts payable by the Borrower to the Agent pursuant to
Clause 19 to the extent that those amounts are not paid by the
Borrower;
11.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security
Documents, or the performance of its duties and obligations,
or the exercise of its rights, powers, discretions or remedies
under or pursuant to any of the Security Documents; or in
connection with any action taken or omitted by the Agent under
or pursuant to any of the Security Documents, unless in any
case those liabilities, damages, costs or claims arise solely
from the Agent's wilful misconduct or gross negligence.
11.13 Employment of agents In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of money
and documents and the payment of money) and to act or refrain
49
from taking action in reliance on the opinion of, or advice or
information obtained from, any lawyer, banker, broker, accountant,
valuer or any other person believed by the Agent in good faith to be
competent to give such opinion, advice or information.
11.14 Distribution of payments The Agent shall pay promptly to the order
of each of the Banks that Bank's Proportionate Share of every sum of
money received by the Agent pursuant to the Security Documents or
the Mortgagees' Insurances (with the exception of any amounts
payable pursuant to Clause 9.1 and/or the Fee Letters and any
amounts which, by the terms of the Security Documents, are paid to
the Agent for the account of the Agent or the Syndication Agents
alone or specifically for the account of one or more Banks or
Arrangers) and until so paid such amount shall be held by the Agent
on trust absolutely for that Bank, that Arranger or the Syndication
Agents (or as the case may be).
11.15 Reimbursement The Agent shall have no liability to pay any sum to a
Bank or to an Arranger or the Syndication Agents until it has itself
received payment of that sum. If, however, the Agent does pay any
sum to a Bank or to an Arranger or the Syndication Agents on account
of any amount prospectively due to it pursuant to Clause 11.14
before it has itself received payment of that amount, and the Agent
does not in fact receive payment within five Business Days after the
date on which that payment was required to be made by the terms of
the Security Documents or the Mortgagees' Insurances, the recipient
will, on demand by the Agent, refund to the Agent an amount equal to
the amount received by it, together with an amount sufficient to
reimburse the Agent for any amount which the Agent may certify that
it has been required to pay by way of interest on money borrowed to
fund the amount in question during the period beginning on the date
on which that amount was required to be paid by the terms of the
Security Documents or the Mortgagees' Insurances and ending on the
date on which the Agent receives reimbursement.
11.16 Redistribution of payments Unless otherwise agreed between the
Finance Parties, if at any time a Bank receives or recovers by way
of set-off, the exercise of any lien or otherwise (other than from
any assignee or transferee of or sub-participant in that Bank's
Commitment), an amount greater than that Bank's
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Proportionate Share of any sum due from any of the Security Parties
under the Security Documents (the amount of the excess being
referred to in this Clause as the "Excess Amount") then:-
11.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
11.16.2 that Bank shall pay to the Agent an amount equal to the Excess
Amount within ten days of its receipt or recovery of the
Excess Amount; and
11.16.3 the Agent shall treat that payment as if it were a payment by
the Security Party in question on account of the sum owed to
the Banks as aforesaid and shall account to the Banks in
respect of the Excess Amount in accordance with the provisions
of this Clause.
However, if a Bank has commenced any Proceedings to recover sums
owing to it under the Security Documents and, as a result of, or in
connection with, those Proceedings has received an Excess Amount,
the Agent shall not distribute any of that Excess Amount to any
other Bank which had been notified of the Proceedings and had the
legal right to, but did not, join those Proceedings or commence and
diligently prosecute separate Proceedings to enforce its rights in
the same or another court.
11.17 Rescission of Excess Amount If all or any part of any Excess Amount
is rescinded or must otherwise be restored to any of the Security
Parties or to any other third party, the Banks which have received
any part of that Excess Amount by way of distribution from the Agent
pursuant to this Clause shall repay to the Agent for the account of
the Bank which originally received or recovered the Excess Amount,
the amount which shall be necessary to ensure that the Banks share
rateably in accordance with their Proportionate Shares in the amount
of the receipt or payment retained, together with interest on that
amount at a rate equivalent to that (if any) paid by the Bank
receiving or recovering the Excess Amount to the person to whom that
Bank is liable to make payment in respect of such amount, and Clause
11.16.3 shall apply only to the retained amount.
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11.18 Proceedings Each of the Finance Parties shall notify one another of
the proposed commencement of any Proceedings under any of the
Security Documents prior to their commencement. No such Proceedings
may be commenced without the prior written consent of an Instructing
Group.
11.19 Instructions Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the Banks
or of an Instructing Group each of the Banks shall provide the Agent
with instructions within five Business Days of the Agent's request
(which request may be made orally or in writing). If a Bank does not
provide the Agent with instructions within that period, (i) that
Bank shall be bound by the decision of the Agent, (ii) that Bank
shall have no vote for the purposes of this Clause and (iii) the
combined Proportionate Shares of the other Banks who provided such
instructions shall be deemed to contribute 100%. Nothing in this
Clause shall limit the right of the Agent to take, or refrain from
taking, any action without obtaining the instructions of the Banks
if the Agent in its discretion considers it necessary or appropriate
to take, or refrain from taking, such action in order to preserve
the rights of the Banks under or in connection with the Security
Documents. In that event, the Agent will notify the Banks of the
action taken by it as soon as reasonably practicable, and the Banks
agree to ratify any action taken by the Agent pursuant to this
Clause.
11.20 Communications Any Communication under this Clause shall be given,
delivered, made or served, in the case of the Agent (in its capacity
as Agent or as one of the Banks), and in the case of the other
Banks, at the address indicated in Schedule 1 or such other
addresses as shall be duly notified in writing to the Agent on
behalf of the Banks.
11.21 Payments All amounts payable to a Bank under this Clause shall be
paid to such account at such bank as that Bank may from time to time
direct in writing to the Agent.
11.22 Retirement Subject to a successor being appointed in accordance with
this Clause, the Agent may retire as agent and/or security trustee
at any time without assigning any reason by giving to the Borrower
and the other Finance Parties notice of its intention to do so, in
which event the following shall apply:-
52
11.22.1 with the consent of the Borrower, not to be unreasonably
withheld, the other Finance Parties may within thirty days
after the date of the Agent's notice appoint a successor to
act as agent and/or security trustee or, if they fail to do so
with the consent of the Borrower, not to be unreasonably
withheld, the Agent may appoint any other bank or financial
institution as its successor;
11.22.2 the resignation of the Agent shall take effect simultaneously
with the appointment of its successor on written notice of
that appointment being given to the Borrower and the other
Finance Parties;
11.22.3 the Agent shall thereupon be discharged from all further
obligations as agent and/or security trustee but shall remain
entitled to the benefit of the provisions of this Clause;
11.22.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been a
party to this Agreement.
11.23 No fiduciary relationship Except as provided in Clauses 11.3 and
11.14, the Agent shall not have any fiduciary relationship with or
be deemed to be a trustee of or for a Bank or an Arranger and
nothing contained in any of the Security Documents shall constitute
a partnership between any two or more Banks or Arrangers or between
the Agent and any Bank or Arranger.
11.24 The Agent as a Bank The expression "the Banks" when used in the
Security Documents includes the Agent in its capacity as one of the
Banks. The Agent shall be entitled to exercise its rights, powers,
discretions and remedies under or pursuant to the Security Documents
in its capacity as one of the Banks in the same manner as any other
Bank and as if it were not also the Agent.
11.25 The Agent as security trustee Unless the context otherwise requires,
the expression "the Agent" when used in the Security Documents
includes the Agent acting in its capacities both as agent and
security trustee.
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11.26 Syndication Agent Each of the Finance Parties agrees, for the
avoidance of doubt, that the Syndication Agents have no duties in
their capacities as Syndication Agents under the Security Documents.
12 Covenants
Each of the Borrower and the Guarantor covenants with the Finance Parties
in the following terms.
12.1 Negative covenants
Neither the Borrower nor the Guarantor, will:-
12.1.1 no third party rights without the Banks' prior written consent
permit any member of the SO Group to create or permit to arise
or continue any Encumbrance on or over all or any part of its
assets or undertaking (including, without limitation accounts
receivable by that member) except (i) in relation to topside
of the "Seaway Polaris" and the hulls "Seaway Polaris" and
"DLB 801" (ii) any Encumbrance existing on the date of this
Agreement and listed in Appendix B or, (iii) any Encumbrance
relating to assets which become the property of the SO Group
after the date of this Agreement (including accounts
receivable attributable thereto where such accounts
receivables security interest is ancillary to the security
interest in the associated fixed costs as part of an asset
based financing) and (iv) Permitted Liens; nor
12.1.2 chartering without the prior written consent of an Instructing
Group, (a) charter any Vessel or permit any Vessel to be
chartered on any bareboat charter, or otherwise for a period
exceeding (or inclusive of any extension options, capable of
exceeding) twelve (12) months) provided that committing a
Vessel for several periods, each of less than twelve months
but for an aggregated period exceeding (12) months or
chartering a Vessel to a member of the SO Group for a period
in excess of twelve (12) months shall not be deemed to be a
breach of this Clause
54
(together the "Permitted Charters") or (b) following the
occurrence and during the continuation of an Event of Default,
let any Vessel on charter (including a Permitted Charter
unless the same was entered into prior to the occurrence of
any such Event of Default) or renew or extend any charter or
other contract of employment of any such Vessel (nor agree to
do so); nor
12.1.3 no change in management without the prior written consent of
an Instructing Group, permit the appointment of anyone other
than the Managers as commercial or technical managers of the
Vessels, nor terminate or amend any Management Agreement
and/or the arrangements for the commercial or technical
management of the Vessels in a manner which is, in the
reasonable opinion of the Agent, detrimental to the interest
of the Finance Parties or any of them, nor permit the Managers
to sub-contract or delegate the commercial or technical
management of any Vessel to any third party outside of the SO
Group provided that any termination or amendment of any
Management Agreement and/or management arrangements referred
to above with a member of the SO Group shall not be deemed to
be detrimental to the interests of the Finance Parties or any
of them where any new manager (being within the SO Group)
enters into an agreement with the Agent subordinating its
rights in the Vessel to those of the Banks in terms
substantially the same as contained in those
agreements/arrangements entered into immediately before such
amendment; nor
12.1.4 merger or amalgamation without the prior written consent of an
Instructing Group, permit any merger or amalgamation unless
(i) the Guarantor, the Borrower or a Shipowning Guarantor, as
the case may be, remains the surviving entity following any
such merger or amalgamation (or if the merger or amalgamation
involves more than one of the Shipowning Guarantors, then one
of the Shipowning Guarantors remains the surviving entity) and
(ii) such surviving entity is not divested of any material
part of the assets or operations of such member of the SO
Group and (iii) in the case of the Guarantor only,
55
such merger or amalgamation has been approved by a duly passed
resolution of the Guarantor's shareholders; nor
12.1.5 no sale of Vessels/Shipowning Guarantors without the prior
written consent of the Banks sell or cause to be sold or,
dispose or caused to be disposed of in whole or in part, any
Vessel or Shipowning Guarantor nor agree to do so except where
(i) the Maximum Facility Amount is reduced pursuant to Clause
2.4.3 or (ii) the sale or disposal, in whole or in part, is
made to a member of the SO Group who will become a Shipowning
Guarantor upon the acquisition of such Vessel and who will
execute and deliver to the Agent a Shipowner's Guarantee, a
Mortgage and an Assignment in respect of such Vessel in
substantially the same terms as those Security Documents
already executed in favour of and delivered to the Agent which
shall be accompanied by such corporate documents and legal
opinions as the Agent may request (and upon any sale or
disposal of a Shipowning Guarantor or its Vessel such
Shipowning Guarantor's obligations under the Security
Documents to which it is a party will terminate provided that
no Event of Default has occurred and the provisions of Clause
12.1.5(i) or (ii), as the case may, be have been fully
complied with) or (iii) any such Vessel is replaced by a
similar asset acceptable to the Banks in their sole discretion
of equal or greater value.
12.2 Positive covenants
12.2.1 Registration of Vessels Each of the Borrower and the Guarantor
undertakes to procure the maintenance of the registration of
the Vessels under the flags and ownerships indicated in
Schedule 4 for the duration of the Facility Period unless
otherwise approved by an Instructing Group in writing.
12.2.2 Additional security If and so often as the aggregate of any
Valuations of the Vessels plus the value of any additional
security (other than cash) for the time being provided to the
Banks (or to the Agent on their behalf) pursuant to this
Clause shall be less than one hundred and
56
twenty per centum (120%) of the Original Dollar Amount (less
the amount of any cash deposited as additional security
pursuant to this Clause) the Borrower will, within thirty days
of the request of the Agent to do so, at the Borrower's
option:-
(a) pay to the Agent or to its nominee a cash deposit in the
amount of the shortfall to be secured in favour of the
Banks (or of the Agent on their behalf) as additional
security for the payment of the Indebtedness; or
(b) give to the Banks (or to the Agent on their behalf)
other additional security in amount and form acceptable
to the Banks in their discretion; or
(c) prepay the amount of the Indebtedness which will ensure
that the aggregate of the Valuations of the Vessels plus
the value of any such additional security (other than
cash) is not less than one hundred and twenty per centum
(120%) of the Original Dollar Amount (less the amount of
any cash deposited as additional security pursuant to
this Clause).
For the purpose of determining the value of a Vessel under
this Clause, where such Vessel constitutes a Total Loss its
value shall be deemed to be the lesser of (i) the last
Valuation in respect of that Vessel prior to it becoming a
Total Loss or (ii) the amount of insurance proceeds expected
to be paid in respect of any insurance claim relating to the
Total Loss of such Vessel.
Clauses 6.3, 6.4 and 6.5 shall apply, mutatis mutandis, to any
prepayment made pursuant to this Clause and the value of any
additional security provided pursuant to this Clause shall be
determined by the Agent in its discretion. Provided that,
where the Borrower has provided additional security pursuant
to this Clause, the Borrower may request that the Agent obtain
new Valuations on a date falling not earlier than six months
after the date such additional security was
57
provided. Where requested by the Borrower to obtain new
Valuations pursuant to this Clause the Agent shall obtain such
new Valuations at the cost and expense of the Borrower. If the
aggregate of the new Valuations of the Vessels plus the value
of any additional security (other than cash) (the "New
Security Amount") is greater than one hundred and twenty per
cent (120%) of the Original Dollar Amount (less the amount of
any cash deposited as additional security pursuant to this
Clause) (the "Security Maintenance Amount") provided that no
Event of Default has occurred and is continuing, the Agent
(provided that the Agent shall firstly release any cash
collateral deposited with it pursuant to this Clause) shall
release to the Borrower, upon the Borrower's written request
and at the Borrower's expense, any such additional security as
the Agent selects, such that after its release the New
Security Amount will at least be equal to the Security
Maintenance Amount, provided, however, that the value of such
security to be released is not less than five hundred thousand
Dollars ($500,000). For the purposes of this Clause the
Borrower shall at its expense throughout the Facility Period
deliver to the Agent a Valuation in respect of each Vessel (i)
at least annually after the Execution Date and (ii) at any
time reasonably requested by the Agent.
12.2.3 Financial statements The Borrower will supply to the Agent,
without request:-
(a) its annual unaudited financial statements for each
financial year of the Borrower ending during the
Facility Period, containing (amongst other things) the
Borrower's profit and loss account for, and balance
sheet at the end of, each such financial year, prepared
in accordance with generally accepted accounting
principles and practices applicable to companies
incorporated in the Netherlands consistently applied, in
each case within one hundred and eighty days of the end
of the financial year to which they relate and such
financial statements shall accurately and fairly
represent the financial condition of the Borrower; and
58
(b) on a consolidated basis:-
(i) the Guarantor's annual audited accounts prepared
in accordance with US GAAP within one hundred and
eighty days of the end of the financial year to
which they relate and such financial statements
shall accurately and fairly represent the
financial condition of the SO Group; and
(ii) the Guarantor's unaudited quarterly financial
statements (including cash flow analysis) not
later than 90 days after the end of the relevant
fiscal quarter; and
(c) the SO Group's consolidated budget on an annual basis;
and
(d) any financial information delivered by the Guarantor to
its shareholders; and
(e) a cash flow projection for the following three years to
be provided every twelve months during the Facility
Period.
12.2.4 Other information The Borrower will promptly supply to the
Agent copies of all financial and other information from time
to time given by the Guarantor to its shareholders and such
information and explanations as an Instructing Group may from
time to time reasonably require in connection with the
operation of the Vessels and the Borrower's and the
Guarantor's profit and liquidity, and will procure that the
Agent be given the like information and explanations relating
to all other Security Parties.
12.2.5 Evidence of current COFR Without limiting the Borrower's
obligations under Clause 12.2.4, the Borrower will from time
to time on the request of the Agent provide the Agent with
such evidence as the Agent may reasonably require that each
Vessel operating in the waters of the United States of America
has a valid and current Certificate of
59
Financial Responsibility pursuant to the United States Oil
Pollution Xxx 0000.
12.2.6 ISM Code compliance In respect of each Vessel at any time
subject to the ISM Code the Borrower will:-
(a) procure that the Vessel remains for the duration of the
Facility Period subject to a SMS;
(b) maintain a valid and current SMC for the Vessel
throughout the Facility Period;
(c) if it is not itself the Company, procure that the
Company maintains a valid and current DOC throughout the
Facility Period;
(d) promptly report to the Agent in writing of any actual or
threatened withdrawal, suspension, cancellation or
modification of the Vessel's SMC or of the Company's
DOC;
(e) promptly report to the Agent in writing (i) any accident
involving a Vessel which may result in that Vessel's
insurers making payment directly to the Agent in
accordance with the relevant Security Documents or (ii)
any "major non-conformity", as that term is defined in
the Guidelines on the Implementation of the
International Safety Management Code by Administrations
adopted by the Assembly of the International Maritime
Organisation pursuant to Resolution A.788(19), and of
the steps being taken to remedy the situation; and
(f) not without the prior written consent of the Agent
(which will not be unreasonably withheld) change the
identity of the Company.
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12.2.7 Guarantor's Public Listing Each of the Borrower and the
Guarantor shall ensure that throughout the Facility Period the
Guarantor shall remain a public listed company unless with the
prior written approval of the Banks it is owned by significant
and recognised corporate bodies with a corporate rating of at
least BBB as defined by Standard & Poor's or similar rating
from a rating agency acceptable to the Banks.
12.2.8 Insurances The Borrower shall ensure that each of the Vessels
is fully insured upon the terms and conditions set forth in
the Mortgages or Deed of Covenants (as the case may be). In
addition, each of the Borrower and the Guarantor shall ensure
that its property and assets are insured against such risks
and in such amounts as are customary for companies engaged in
similar businesses.
12.2.9 Classification The Borrower shall ensure that each Vessel is
classed and maintained with the highest applicable class
necessary to properly operate such Vessel of Lloyds Register
of Shipping, Det norske Veritas, the American Bureau of
Shipping or such other classification society acceptable to
the Agent and that such classification is not changed or
impaired in any way during the Facility Period.
12.2.10 Certificate of Compliance The Borrower and the Guarantor shall
deliver to the Agent a duly executed Certificate of Compliance
ninety (90) days after the end of each fiscal quarter
occurring during the Facility Period certifying (inter alia)
compliance with the covenants contained in Clauses 12.2.18 and
12.3.1.
12.2.11 Inspection of records The Borrower and the Guarantor will each
permit the inspection of its financial records and accounts
from time to time during business hours by the Agent or its
nominee.
12.2.12 Notification of Event of Default Each of the Borrower and the
Guarantor will immediately notify the Agent in writing of the
occurrence of any Event of Default or Potential Event of
Default or
61
any event which will materially adversely affect the
Borrower's or the Guarantor's ability to perform its
obligations under this Agreement or the ability of any of the
other Security Parties or any Principal Subsidiary to perform
any of their obligations under any of the Security Documents
to which they are a party or may become a party to.
12.2.13 Additional Filings/Notification Each of the Borrower and the
Guarantor shall ensure that (i) any and all additional filings
referred to in the proviso to Clause 4.5 will be made and/or
effected promptly and within any applicable time limits
imposed by law and (ii) the Agent is immediately notified if
any of the Security Parties (a) has an established place of
business in the United Kingdom or the United States of America
at any time during the Facility Period or (b) changes the
place of its Chief Executive office or principal place of
business in the United States of America.
12.2.14 Pari Passu Each of the Borrower and the Guarantor shall ensure
that their respective obligations under this Agreement shall
at all times rank at least pari passu with all of their other
present and future unsecured and unsubordinated indebtedness
with the exception of any obligations which are mandatorily
preferred by any applicable laws to companies generally and
not by contract.
12.2.15 Corporate Existence Save as permitted by Clause 12.1.4, each
of the Borrower and the Guarantor shall ensure that throughout
the Facility Period each of the Security Parties shall (i)
remain duly formed and validly existing under the laws of its
respective jurisdiction of incorporation (ii) remain
authorised to do business in the jurisdiction in which it
transacts its business (iii) continue to have the power to
carry on its business as it is now being conducted and to
enter into and perform its obligations under the Security
Documents to which it is a party and (iv) continue to comply
with all statutory, regulatory and other requirements relative
to its business which could reasonably be
62
expected to have a material adverse effect on its business,
assets or operations, financial or otherwise.
12.2.16 Admissibility In Evidence Each of the Borrowers and the
Guarantor shall on the request of the Agent obtain all
necessary authorisations, consents, approvals, licences,
exemptions, filings, registrations, recordings and
notarisations required or advisable in connection with the
admissibility in evidence of the Security Documents or any of
them in Proceedings in England or any other jurisdiction in
which Proceedings have been commenced.
12.2.17 Finance Company Status The Borrower will ensure that
throughout the Facility Period the Borrower will comply with
the regulations of the Netherlands Ministry of Finance dated 4
February 1993 with respect to finance companies to the extent
applicable and that the application of the Facility will be in
accordance with such regulations. The Borrower will also
ensure that throughout the Facility Period all notice
requirements to the Dutch Central Bank pursuant to the Foreign
Financial Relations Act ("Wet Financiele Xxxxxxxxxxxx
Xxxxxxxxxx") 0000, are complied with.
12.2.18 Permitted Indebtedness The Borrower and the Guarantor shall
procure that throughout the Facility Period the SO Group will
have no indebtedness other than Permitted Indebtedness.
12.2.19 Short Term Permitted Indebtedness The Borrower and the
Guarantor shall procure that throughout the Facility Period
the Short Term Permitted Indebtedness shall not exceed seventy
five million Dollars ($75,000,000) in aggregate or the
equivalent in any other currency.
12.2.20 Subordinated Debt The Borrower and the Guarantor shall ensure
that throughout the Facility Period any Subordinated Debt (i)
shall not exceed one hundred million Dollars ($100,000,000) in
aggregate or the equivalent in any other currency, (ii) shall
be fully subordinated to the
63
Indebtedness on terms contained in a Subordinated Loan
Agreement and acceptable to the Banks and (iii) shall not
permit any payment of cash interest or cash dividends
("Subordinated Interest") unless the ratio of D/EBITDA at such
time is less than 2:1. For the purposes of this Clause 12.2.20
the amount of Consolidated Debt utilised in the calculation of
the D/EBITDA ratio shall include the application of the
proceeds of Subordinated Debt where such Subordinated Debt was
incurred during the period between the previous Margin Review
Date and the date for payment of Subordinated Interest.
12.2.21 Sale of Assets The sale of assets of the SO Group shall not at
any time during each fiscal year falling within the Facility
Period exceed fifty million Dollars ($50,000,000) or the
equivalent in any other currency in aggregate. Notwithstanding
the foregoing, the maximum cumulative aggregate amount for the
sale of assets of the SO Group during the Facility Period
shall not exceed one hundred and fifty million Dollars
($150,000,000) or the equivalent in any other currency. In
this Clause the sale of assets includes (i) contributing
assets to joint ventures and (ii) Vessels which are subject to
a Mortgage provided that where any such Vessel is sold the
Maximum Facility Amount is reduced by the proportionate value
specified in Clause 2.4.3 unless any such Vessel is replaced
by a similar asset (acceptable to the Banks in their sole
discretion) of equal or greater value. For the purposes of
this Clause the value of any asset sold or disposed of shall
be deemed to be its market value whether or not such asset was
sold on "an arms length basis" and sales of assets within the
SO Group shall not be counted.
12.3 Guarantor's Financial Covenants
12.3.1 Throughout the Facility Period the Guarantor shall:-
(a) maintain a Consolidated Tangible Net Worth of not less
than $500,000,000 or the equivalent in any other
currency which shall be increased on an annual basis
calculated as of the end of each fiscal year by an
amount equal to 50% of annual
64
consolidated net income (to the extent positive) from
the Execution Date;
(b) maintain a Consolidated Debt to Consolidated Tangible
Net Worth ratio of a maximum of 1.00:1.00 as calculated
at the end of each fiscal quarter;
(c) on a rolling four fiscal quarter basis, maintain a
D/EBITDA ratio of a maximum of:-
4.25:1 during the period commencing on the Execution
Date and ending 31 May 2001;
4.00:1 during the period commencing on 1 June 2001 and
ending on 30 November 2001;
3.50:1 during the period commencing on 1 December 2001
and ending on 30 November 2002;
3:00:1 during the period commencing on 1 December 2002
and ending on the last day of the Facility Period; and
(d) ensure that any inter-company debt due from SNSA or any
of its Subsidiaries (not including the SO Group) to the
SO Group does not at any one time exceed fifty million
Dollars ($50,000,000) in aggregate or its equivalent
amount in any other currency.
For the purposes of this Clause 12.3.1 Subordinated Debt in an
amount of up to one hundred million Dollars ($100,000,000) or
the equivalent in any other currency shall not be included in
the calculation of (i) Consolidated Debt to Consolidated
Tangible Net Worth and (ii) D/EBITDA.
(e) Notwithstanding Clause 12.2.19, the Guarantor shall be
permitted to incur additional indebtedness ("Additional
Permitted
65
Indebtedness") (i) in an amount of up to the difference
between four hundred and forty million Dollars
($440,000,000) and the Maximum Facility Amount permitted
at such time and (ii) for acquisitions and/or capital
expenditure if on a pro forma basis D/EBITDA does not
exceed the ratios specified in Clause 12.3.1. (c) and no
Event of Default has occurred and is continuing.
13 Earnings
13.1 Remittance of earnings Immediately upon the occurrence of an Event
of Default, the Borrower shall procure that all Earnings are paid to
such account(s) as the Agent shall from time to time specify by
notice in writing to the Borrower.
14 Events Of Default
14.1 The Agent's rights If any of the events set out in Clause 14.2
occurs, and such event remains unremedied for fourteen (14) days
after notice thereof has been given by the Agent to the Borrower
(except in relation to any of the events described in Clauses
14.2.1, 14.2.2, 14.2.4, 14.2.5, 14.2.6 and 14.2.18 where such remedy
period shall not apply) the Agent may at its discretion by notice to
the Borrower declare the Banks to be under no further obligation to
the Borrower under or pursuant to this Agreement and may declare all
or any part of the Indebtedness (including such unpaid interest as
shall have accrued) to be immediately payable, whereupon the
Indebtedness (or the part of the Indebtedness referred to in the
Agent's notice) shall immediately become due and payable without any
further demand or notice of any kind.
14.2 Events of Default The events referred to in Clause 14.1 are:-
14.2.1 payment default if the Borrower defaults in the payment of any
part of the Indebtedness when due; or
14.2.2 other default if any of the Security Parties fails to observe
or perform any of the covenants, conditions, undertakings,
agreements or obligations on its part contained in any of the
Security Documents or shall in any other way be in breach of
or do or cause to be done any act
66
repudiating or evidencing an intention to repudiate any of the
Security Documents and such default (if in the reasonable
opinion of the Instructing Group capable of remedy) is not
remedied within fourteen (14) days after notice of the default
has been given to the Borrower; or
14.2.3 misrepresentation or breach of warranty if any representation,
warranty or statement made, deemed to be made, or repeated
under any of the Security Documents or in any accounts,
certificate, notice instrument, written statement or opinion
delivered by a Security Party under or in connection with any
Security Document is incorrect in any material respect when
made, deemed to be made or repeated; or
14.2.4 execution if a distress or execution or other process of a
court or authority is levied on any of the property of any of
the Security Parties or any of the Principal Subsidiaries
before or after final judgment or by order of any competent
court or authority for an amount in excess of ten million
Dollars ($10,000,000) or, its equivalent in any other currency
and is not satisfied or stayed (with a view to being contested
in good faith) within fourteen days of levy; or
14.2.5 insolvency events if any of the Security Parties or any of the
Principal Subsidiaries:-
(a) resolves to appoint, or applies for, or consents to the
appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of all
or part of its assets other than for the purposes of a
merger or amalgamation pursuant to Clause 12.1.4; or
(b) is unable or admits its inability to pay its debts as
they fall due; or
(c) makes a general assignment for the benefit of creditors;
or
(d) ceases trading or threatens to cease trading; or
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(e) has appointed an Inspector under the Companies Xxx 0000
or any statutory provision which the Agent in its
discretion considers analogous thereto; or
14.2.6 insolvency proceedings if any proceedings are commenced or
threatened, or any order or judgment is given by any court,
for the bankruptcy, liquidation, winding up, administration or
re-organisation of any of the Security Parties or any of the
Principal Subsidiaries or for the appointment of a receiver,
administrative receiver, administrator, liquidator or trustee
of any of the Security Parties or any of the Principal
Subsidiaries or of all or part of the assets of any of the
Security Parties or any of the Principal Subsidiaries, or if
any person appoints or purports to appoint such receiver,
administrative receiver, administrator, liquidator or trustee
which proceeding is not discharged within thirty (30) days of
its commencement; or
14.2.7 impossibility or illegality unless covered by Clause 17.7, if
any event occurs which would, or would with the passage of
time, render performance of any of the Security Documents
impossible, unlawful or unenforceable by the Banks or the
Agent; or
14.2.8 conditions subsequent if any of the conditions set out in
Clause 3.2 is not satisfied within the time reasonably
required by the Agent with respect to the conditions referred
to at Clauses 3.2.1-3.2.5 inclusive and within twelve (12)
months with respect to the condition referred to at Clause
3.2.6 except where such condition has not been satisfied due
to an act or omission on the part of a Finance Party; or
14.2.9 revocation or modification of consents etc. if any material
consent, licence, approval or authorisation which is now or
which at any time during the Facility Period becomes necessary
to enable any of the Security Parties to comply with any of
their obligations in or pursuant to any of the Security
Documents is revoked, withdrawn or withheld, or modified in a
manner which the Agent reasonably considers is, or may be,
prejudicial to the interests of the Banks in a material
manner, or any
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material consent, licence, approval or authorisation ceases to
remain in full force and effect; or
14.2.10 curtailment of business if the business of any of the Security
Parties is wholly or partially curtailed by any intervention
by or under authority of any government, or if all or a
substantial part of the undertaking, property or assets of any
of the Security Parties (other than a Vessel if it is that
Security Party's only asset) is seized, nationalised,
expropriated or compulsorily acquired by or under authority of
any government or any Security Party disposes or threatens to
dispose of a substantial part of its business or assets; or
14.2.11 loss of Vessel if any Vessel, or any such other vessel which
may from time to time be mortgaged to the Banks (or to the
Agent on their behalf) as security for the repayment of all or
any part of the Indebtedness is destroyed, abandoned,
confiscated, forfeited, condemned as prize or otherwise
becomes a Total Loss, except that a Total Loss shall not be an
Event of Default if:-
(a) such Vessel or such other vessel (as the case may be) is
insured in accordance with the Security Documents; and
(b) no insurer has refused to meet or has disputed the claim
for Total Loss and it is not apparent to the Agent in
its discretion that any such refusal or dispute is
likely to occur; and
(c) payment of all insurance proceeds in respect of the
Total Loss (as required by Clause 6.6.) is made in full
to the Agent on behalf of the Banks in accordance with
Clause 6.6; or
14.2.12 acceleration of other indebtedness if any other indebtedness
or obligation for borrowed money of any of the Security
Parties or any Principal Subsidiary becomes due or capable of
being declared due prior to its stated maturity by reason of
default on the part of that Security Party or Principal
Subsidiary (as the case may be), or is not repaid or satisfied
on the due date for its repayment or any such other loan,
69
guarantee or indebtedness becomes enforceable save, in either
case, for amounts of less than five million Dollars
($5,000,000) in aggregate, or its equivalent in any other
currency, and claims contested in good faith; or
14.2.13 reduction of capital if any of the Security Parties except the
Guarantor reduces its authorised or issued or subscribed
capital except reductions effected in compliance with Clause
12.1.4; or
14.2.14 challenge to registration if the registration of any Vessel or
any Mortgage becomes void or voidable or liable to
cancellation or termination; or
14.2.15 war if the country of registration of any Vessel becomes
involved in war (whether or not declared) or civil war or is
occupied by any other power and the Agent reasonably considers
that, as a result, the security conferred by the Security
Documents is materially prejudiced; or
14.2.16 notice of termination if the Guarantor or any Shipowning
Guarantor gives notice to the Agent to determine its
obligations under the Guarantee or the Shipowner's Guarantee,
as appropriate; or
14.2.17 claim against the Guarantor's assets except for Permitted
Liens, if a maritime or other lien, arrest distress or similar
charge is levied upon or against any Vessel or any substantial
part of the assets of the Guarantor (on a consolidated basis)
and such is not discharged within fourteen (14) Business Days
after any Security Party or Principal Subsidiary (as the case
may be) has become aware of the same; or
14.2.18 Guarantor's business if all or a substantial part of the
Guarantor's business is destroyed, abandoned, seized,
appropriated or forfeited for any reason; or
14.2.19 ownership if (i) the Borrower ceases to be 100% directly owned
by Xxxxx Offshore A/S or 100% indirectly owned by the
Guarantor and (ii)
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any Shipowning Guarantor ceases to be 100% directly or
indirectly owned by the Guarantor; or
14.2.20 final judgements if any of the Security Parties fails to
comply with any non appealable court order or fails to pay a
final unappealable judgement against it, in either case, in
excess of ten million Dollars ($10,000,000) which remains
unsettled for fourteen (14) days; or
14.2.21 third party charters if any Vessel which is on charter to a
member of the SO Group is chartered for a period of twelve
(12) months or more to a person who is not a member of the SO
Group.
15 Set-Off and Lien
15.1 Set-off Each of the Borrower and the Guarantor irrevocably
authorises the Finance Parties at any time after all or any part of
the Indebtedness shall have become due and payable to set off
without notice any liability of the Borrower or the Guarantor (as
the case may be) to any of the Finance Parties (whether present or
future, actual or contingent, and irrespective of the branch or
office, currency or place of payment) against any credit balance
from time to time standing on any account of the Borrower or the
Guarantor (as the case may be) (whether current or otherwise and
whether or not subject to notice) with any branch of any of the
Finance Parties in or towards satisfaction of the Indebtedness and,
in the name of that Finance Party, the Borrower or the Guarantor (as
the case may be), to do all acts (including, without limitation,
converting or exchanging any currency) and execute all documents
which may be required to effect such application.
15.2 Lien If an Event of Default has occurred and is continuing, each
Finance Party shall have a lien on and be entitled to retain and
realise as additional security for the repayment of the Indebtedness
any cheques, drafts, bills, notes or negotiable or non-negotiable
instruments and any stocks, shares or marketable or other securities
and property of any kind of the Borrower or the Guarantor (or of
that Finance Party as agent or nominee of the Borrower or the
Guarantor) from time to time held by that Finance Party, whether for
safe custody or otherwise.
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15.3 Restrictions on withdrawal Despite any term to the contrary in
relation to any deposit or credit balance at any time on any account
of the Borrower or the Guarantor (as the case may be) with any of
the Finance Parties, no such deposit or balance shall be repayable
or capable of being assigned, mortgaged, charged or otherwise
disposed of or dealt with by the Borrower or the Guarantor (as the
case may be) after an Event of Default has occurred and while such
Event of Default is continuing, but any Finance Party may from time
to time permit the withdrawal of all or any part of any such deposit
or balance without affecting the continued application of this
Clause.
15.4 Application Whilst an Event of Default is continuing, each of the
Borrower and the Guarantor irrevocably authorises the Agent to apply
all sums which the Agent may receive:-
15.4.1 pursuant to a sale or other disposition of a Vessel or any
right, title or interest in a Vessel; or
15.4.2 by way of payment to the Agent of any sum in respect of the
Insurances, Earnings or Requisition Compensation of a Vessel;
or
15.4.3 otherwise arising under or in connection with any of the
Security Documents
in or towards satisfaction, or by way of retention on account, of
the Indebtedness, in such manner as the Agent may in its discretion
determine.
16 Assignment and Sub-Participation
16.1 Right to assign Each of the Banks may assign or transfer all or any
of its rights under or pursuant to the Security Documents to any
other branch of that Bank or to any other bank or financial
institution, and may grant sub-participations in all or any part of
its Commitment provided that the Borrower and the Agent consent to
such assignment or transfer (such consent not to be unreasonably
withheld or delayed) and such assignment or transfer does not result
in the Borrower being subject to any additional Tax or other
financial or legal obligations other than those contemplated by the
terms of this Agreement at the time of such assignment or transfer.
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16.2 Borrower's co-operation Each of the Borrower and the Guarantor will
co-operate fully with the Banks in connection with any assignment,
transfer or sub-participation pursuant to Clause 16.1; will execute
and procure the execution of such documents as the Banks may require
in connection therewith; and irrevocably authorises each of the
Finance Parties to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Facility or the Security Documents which each
such Finance Party may in its discretion consider necessary or
desirable (subject to any duties of confidentiality applicable to
the Banks generally).
16.3 Rights of assignee Any assignee, transferee or sub-participant of a
Bank shall (unless limited by the express terms of the assignment,
transfer or sub-participation) take the full benefit of every
provision of the Security Documents benefiting that Bank.
16.4 Transfer Certificates If any Bank wishes to transfer all or any of
its Commitment as contemplated in Clause 16.1 then such transfer may
be effected by the delivery to the Agent of a duly completed and
duly executed Transfer Certificate in which event, on the later of
the Transfer Date specified in such Transfer Certificate and the
fifth Business Day after the date of delivery of such Transfer
Certificate to the Agent:
16.4.1 to the extent that in such Transfer Certificate the Bank which
is a party thereto seeks to transfer its Commitment in whole,
the Borrower and such Bank shall be released from further
obligations towards each other under this Agreement and their
respective rights against each other shall be cancelled other
than existing claims against such Bank for breach of this
Agreement (such rights, benefits and obligations being
referred to in this Clause 16.4 as "discharged rights and
obligations");
16.4.2 the Borrower and the Transferee which is a party thereto shall
assume obligations towards one another and/or acquire rights
against one another which differ from such discharged rights
and obligations only insofar as
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the Borrower and such Transferee have assumed and/or acquired
the same in place of the Borrower and such Bank; and
16.4.3 the Agent, the Arrangers, the Syndication Agents, the
Transferee and the other Banks shall acquire the same rights
and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such
Transferee been an original party to this Agreement as a Bank
with the rights, benefits and/or obligations acquired or
assumed by it as a result of such transfer.
16.5 Power of Attorney In order to give effect to each Transfer
Certificate the Finance Parties and the Borrower each hereby
irrevocably and unconditionally appoint the Agent as its true and
lawful attorney with full power to execute on their respective
behalves each Transfer Certificate delivered to the Agent pursuant
to Clause 16.4 without the Agent being under any obligation to take
any further instructions from or give any prior notice to, any of
the Finance Parties or, subject to the Borrower's rights under
Clause 16.1, the Borrower before doing so and the Agent shall so
execute each such Transfer Certificate on behalf of the other
Finance Parties and the Borrower immediately on its receipt of the
same pursuant to Clause 16.4.
16.6 Notification The Agent shall promptly notify the other Finance
Parties, the Transferee and the Borrower on the execution by it of
any Transfer Certificate together with details of the amount
transferred, the Transfer Date and the parties to such transfer.
17 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
17.1 Payments All amounts payable by the Borrower and the Guarantor under
or pursuant to any of the Security Documents shall be paid to such
accounts at such banks as the Agent may from time to time direct to
the Borrower or the Guarantor (as the case may be), and (unless
payable in any other Currency of Account) shall be paid in Dollars
in same day funds (or such funds as are required by the authorities
in the United States of America for settlement of international
payments for immediate value). Payments shall be deemed to have been
received
74
by the Agent on the date on which the Agent receives authenticated
advice of receipt, unless that advice is received by the Agent on a
day other than a Business Day or at a time of day (whether on a
Business Day or not) when the Agent in its reasonable discretion
considers that it is impossible or impracticable for the Agent to
utilise the amount received for value that same day, in which event
the payment in question shall be deemed to have been received by the
Agent on the Business Day next following the date of receipt of
advice by the Agent.
17.2 No deductions or withholdings All payments (whether of principal or
interest or otherwise) to be made by the Borrower and/or the
Guarantor pursuant to the Security Documents shall, subject only to
Clause 17.3, be made free and clear of and without deduction for or
on account of any Taxes or other deductions, withholdings,
restrictions, conditions or counterclaims of any nature, and neither
the Borrower nor the Guarantor will claim any equity in respect of
any payment due from it to the Banks or to the Agent under or in
relation to any of the Security Documents.
17.3 Grossing-up If at any time any law requires (or is interpreted to
require) the Borrower or the Guarantor to make any deduction or
withholding from any payment, or to change the rate or manner in
which any required deduction or withholding is made, the Borrower or
the Guarantor (as the case may be) will promptly notify the Agent
and, simultaneously with making that payment, will pay to the Agent
whatever additional amount (after taking into account any additional
Taxes on, or deductions or withholdings from, or restrictions or
conditions on, that additional amount) is necessary to ensure that,
after making the deduction or withholding, the Agent and the Banks
receive a net sum equal to the sum which they would have received
had no deduction or withholding been made.
17.4 Evidence of deductions If at any time either the Borrower or the
Guarantor is required by law to make any deduction or withholding
from any payment to be made by it pursuant to any of the Security
Documents, the Borrower or the Guarantor (as the case may be) will
pay the amount required to be deducted or withheld to the relevant
authority within the time allowed under the applicable law and will,
no later than thirty days after making that payment, deliver to the
75
Agent an original receipt issued by the relevant authority, or other
evidence reasonably acceptable to the Agent, evidencing the payment
to that authority of all amounts required to be deducted or
withheld. If the Borrower makes any deduction or withholding from
any payment under or pursuant to any of the Security Documents, and
a Bank subsequently receives a refund or allowance from any tax
authority which that Bank identifies as being referable to that
deduction or withholding, that Bank shall, as soon as reasonably
practicable, pay to the Borrower an amount equal to the amount of
the refund or allowance received, if and to the extent that it may
do so without prejudicing its right to retain that refund or
allowance and without putting itself in any worse financial position
than that in which it would have been had the deduction or
withholding not been required to have been made. Nothing in this
Clause shall be interpreted as imposing any obligation on any Bank
unless requested by the Borrower to apply for any refund or
allowance nor as restricting in any way the manner in which any Bank
organises its tax affairs, nor as imposing on any Bank any
obligation to disclose to the Borrower any information regarding its
tax affairs or tax computations. All costs and expenses incurred by
any Bank in obtaining or seeking to obtain a refund or allowance
from any tax authority pursuant to this Clause shall be for the
Borrower's account.
17.5 Adjustment of due dates If any payment to be made under any of the
Security Documents, other than a payment of interest on the
Facility, shall be due on a day which is not a Business Day, that
payment shall be made on the next succeeding Business Day (unless
the next succeeding Business Day falls in the next calendar month in
which event the payment shall be made on the next preceding Business
Day). Any such variation of time shall be taken into account in
computing any interest in respect of that payment.
17.6 Change in law If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any
law, or in compliance with any request or requirement from any
central bank or any fiscal, monetary or other authority:-
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17.6.1 any Finance Party (or the holding company of any Finance
Party) shall be subject to any Tax with respect to payments of
all or any part of the Indebtedness; or
17.6.2 the basis of Taxation of payments to any Finance Party in
respect of all or any part of the Indebtedness shall be
changed; or
17.6.3 any reserve requirements shall be imposed, modified or deemed
applicable against assets held by or deposits in or for the
account of or loans by any branch of any Finance Party or its
direct or indirect holding company; or
17.6.4 any ratio (whether cash, capital adequacy, liquidity or
otherwise) which any Finance Party or its direct or indirect
holding company is required or requested to maintain shall be
affected; or
17.6.5 there is imposed on any Finance Party (or on the direct or
indirect holding company of any Finance Party) any other
condition in relation to the Indebtedness or the Security
Documents;
and the result of any of the above shall be to increase the cost to
any Bank (or to the direct or indirect holding company of any Bank)
of that Bank making or maintaining its Commitment or its Drawing, or
to cause any Finance Party to suffer (in its reasonable opinion) a
material reduction in the rate of return on its overall capital
below the level which it reasonably anticipated at the date of this
Agreement and which it would have been able to achieve but for its
entering into this Agreement and/or performing its obligations under
this Agreement, the Finance Party affected shall notify the Agent
and, on demand to the Borrower by the Agent, the Borrower shall from
time to time pay to the Agent for the account of the Finance Party
affected the amount which shall compensate that Finance Party or the
Agent (or the relevant holding company) for such additional cost or
reduced return. A certificate signed by an authorised signatory of
the Agent or of the Finance Party affected setting out the amount of
that payment and the basis of its calculation shall be submitted to
the Borrower and shall be conclusive evidence of such amount save
for manifest error or on any question of law.
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17.7 Illegality and impracticality Notwithstanding anything contained in
the Security Documents, the obligations of a Bank to advance or
maintain the Facility shall terminate in the event that a change in
any law or in the interpretation of any law by any authority charged
with its administration shall make it unlawful for that Bank to
advance or maintain its Commitment. In such event the Bank affected
shall notify the Agent and the Agent shall, by written notice to the
Borrower, declare the Banks' obligations to be immediately
terminated. If all or any part of the Facility shall have been
advanced by the Banks to the Borrower, the Indebtedness (including
all accrued interest) shall be prepaid within thirty days from the
date of such notice. Clause 6.3 shall apply to that prepayment if it
is made on a day other than the last day of an Interest Period.
During that period, the affected Bank shall negotiate in good faith
with the Borrower to find an alternative method or lending base in
order to maintain the Facility.
17.8 Changes in market circumstances If at any time a Bank determines
(which determination shall be final and conclusive and binding on
the Borrower) that, by reason of changes affecting the London
Interbank market, adequate and fair means do not exist for
ascertaining the rate of interest on the Facility or any part
thereof pursuant to this Agreement:-
17.8.1 that Bank shall give notice to the Agent and the Agent shall
give notice to the Borrower of the occurrence of such event;
and
17.8.2 the Agent shall as soon as reasonably practicable certify to
the Borrower in writing the effective cost to that Bank of
maintaining its Commitment for such further period as shall be
selected by that Bank and the rate of interest payable by the
Borrower for that period; or, if that is not acceptable to the
Borrower,
17.8.3 the Agent in accordance with instructions from that Bank and
subject to that Bank's approval of any agreement between the
Agent and the Borrower, will negotiate with the Borrower in
good faith with a view to modifying this Agreement to provide
a substitute basis for that Bank's
78
Commitment which is financially a substantial equivalent to
the basis provided for in this Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 17.8.1, the Borrower and the Agent fail to agree in writing
on a substitute basis for such Bank's Commitment the Borrower will
immediately prepay in the relevant Permitted Currency or Currencies
the amount of such Bank's Commitment and the Maximum Facility Amount
will automatically decrease by the amount of such Commitment and
such decrease shall not be reversed. Clause 6.3 shall apply to that
prepayment if it is made on a day other than the last day of an
Interest Period.
17.9 Non-availability of currency Subject to the procedure set forth in
Clause 5.3, if a Bank is for any reason unable to obtain Dollars or
any other Permitted Currency in the London Interbank market and is,
as a result, or as a result of any other contingency affecting the
London Interbank market, unable to advance or maintain its
Commitment in Dollars or in any other Permitted Currency, that Bank
shall give notice to the Agent and the Agent shall give notice to
the Borrower and that Bank's obligations to make the Facility
available shall immediately cease. In that event, if all or any part
of the Facility shall have been advanced by that Bank to the
Borrower, the Agent in accordance with instructions from that Bank
and subject to that Bank's approval of any agreement between the
Agent and the Borrower, will negotiate with the Borrower in good
faith with a view to establishing a mutually acceptable basis for
funding the Facility or relevant part thereof from an alternative
source and/or in an alternative Permitted Currency. If the Agent and
the Borrower have failed to agree in writing on a basis for funding
the Facility or relevant part thereof from an alternative source
and/or in an alternative Permitted Currency by 11.00 a.m. on the
second Business Day prior to the end of the then current relevant
Interest Period, the Borrower will (without prejudice to its other
obligations under or pursuant to this Agreement, including, without
limitation, its obligation to pay interest on the Facility, arising
on the expiry of the then relevant Interest Period) prepay the
Indebtedness to the Agent on behalf of that Bank on the expiry of
the then current relevant Interest Period.
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18 Communications
18.1 Method Except for Communications pursuant to Clause 11, which shall
be made or given in accordance with Clause 11.20, any Communication
may be given, delivered, made or served (as the case may be) under
or in relation to this Agreement by letter or fax and shall be in
the English language and sent addressed:-
18.1.1 in the case of any of the Finance Parties to the Agent at its
address at the head of this Agreement (fax no: + (212)
681-3900) marked for the attention of: Shipping Department;
and
18.1.2 in the case of the Borrower and/or the Guarantor to the
Communications Address with a copy to XxXxxxxxxx & Xxxxx, LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, (fax no: + (212)
448-6260) Attention: Xxxx X. Xxxxxxxxx, provided that the
failure to deliver such copy shall not affect the rights of
any party under this Agreement;
or to such other address or fax number as the Finance Parties, the
Borrower or the Guarantor may designate for themselves by written
notice to the others.
18.2 Timing A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by a party to this
Agreement:-
18.2.1 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication to
have been transmitted to the correct fax number;
18.2.2 if delivered to an officer of the relevant party or (in the
case of the Borrower and/or the Guarantor) left at the
Communications Address at the time of delivery or leaving; or
18.2.3 if posted, at 9.00 a.m. on the third Business Day after
posting by prepaid first class post.
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Any Communication by fax shall be promptly confirmed in writing by
post or hand delivery.
19 General Indemnities
19.1 Currency In the event of any Finance Party receiving or recovering
any amount payable under any of the Security Documents in a currency
other than the Currency of Account, and if the amount received or
recovered is insufficient when converted into the Currency of
Account at the date of receipt to satisfy in full the amount due,
the Borrower and/or the Guarantor (as the case may be) shall, on the
Agent's written demand, pay to the Agent such further amount in the
Currency of Account as is sufficient to satisfy in full the amount
due and that further amount shall be due to the Agent on behalf of
the Finance Parties as a separate debt under this Agreement.
19.2 Costs and expenses Each of the Borrower and the Guarantor will,
within fourteen days of the Agent's written demand, reimburse the
Agent (on behalf of each of the Finance Parties) for all reasonable
out of pocket expenses including internal and external legal costs
(including Value Added Tax or any similar or replacement tax if
applicable) of and incidental to:-
19.2.1 the negotiation, syndication, preparation, execution and
registration of the Security Documents (whether or not any of
the Security Documents are actually executed or registered and
whether or not all or any part of the Facility is advanced);
19.2.2 any amendments, addenda or supplements to any of the Security
Documents (whether or not completed);
19.2.3 any other documents which may at any time be required by any
Finance Party to give effect to any of the Security Documents
or which any Finance Party is entitled to call for or obtain
pursuant to any of the Security Documents (including, without
limitation, all premiums and other sums from time to time
payable by the Agent in relation to the Mortgagees'
Insurances); and
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19.2.4 the exercise of the rights, powers, discretions and remedies
of the Finance Parties under or pursuant to the Security
Documents.
19.3 Events of Default Each of the Borrower and the Guarantor shall
indemnify the Finance Parties from time to time on demand against
all losses and costs incurred or sustained by any Finance Party as a
consequence of any Event of Default, including (without limitation)
any Break Costs.
19.4 Funding costs Each of the Borrower and the Guarantor shall indemnify
the Finance Parties from time to time on demand against all losses
and costs incurred or sustained by any Finance Party if, for any
reason due to a default or other action by the Borrower, any Drawing
is not advanced to the Borrower after the relevant Drawdown Notice
has been given to the Agent, or is advanced on a date other than
that requested in the Drawdown Notice, including (without
limitation) any Break Costs.
19.5 Protection and enforcement Each of the Borrower and the Guarantor
shall indemnify the Finance Parties from time to time on demand
against all losses, costs and liabilities which any Finance Party
may from time to time sustain, incur or become liable for in or
about the protection, maintenance or enforcement of the rights
conferred on the Finance Parties by the Security Documents or in or
about the exercise or purported exercise by the Finance Parties of
any of the rights, powers, discretions or remedies vested in them
under or arising out of the Security Documents, including (without
limitation) any losses, costs and liabilities which any Finance
Party may from time to time sustain, incur or become liable for by
reason of any Finance Party being mortgagees of any Vessel and/or a
lender to the Borrower, or by reason of any Finance Party being
deemed by any court or authority to be an operator or controller, or
in any way concerned in the operation or control, of any Vessel. No
such indemnity will be given to a Finance Party where any such loss,
cost or liability has occurred due to gross negligence or wilful
misconduct on the part of that Finance Party however this shall not
affect the right of any other Finance Party to receive any such
indemnity.
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19.6 Liabilities of Finance Parties Each of the Borrower and the
Guarantor will from time to time reimburse the Finance Parties on
demand for all sums which any Finance Party may pay on account of
any of the Security Parties or in connection with any Vessel
(whether alone or jointly or jointly and severally with any other
person) including (without limitation) all sums which any Finance
Party may pay or guarantees which any Finance Party may give in
respect of the Insurances, any expenses incurred by any Finance
Party in connection with the maintenance or repair of any Vessel or
in discharging any lien, bond or other claim relating in any way to
any Vessel, and any sums which any Finance Party may pay or
guarantees which they may give to procure the release of any Vessel
from arrest or detention.
19.7 Taxes Each of the Borrower and the Guarantor shall pay all Taxes to
which all or any part of the Indebtedness or any of the Security
Documents may be at any time subject and shall indemnify the Finance
Parties on demand against all liabilities, costs, claims and
expenses resulting from any omission to pay or delay in paying any
such Taxes. The indemnity contained in this Clause shall survive the
repayment of the Indebtedness.
20 Miscellaneous
20.1 Waivers No failure or delay on the part of the any Finance Party in
exercising any right, power, discretion or remedy under or pursuant
to any of the Security Documents, nor any actual or alleged course
of dealing between any Finance Party and any of the Security
Parties, shall operate as a waiver of, or acquiescence in, any
default on the part of any Security Party, unless expressly agreed
to do so in writing by the Agent, nor shall any single or partial
exercise by any Finance Party of any right, power, discretion or
remedy preclude any other or further exercise of that right, power,
discretion or remedy, or the exercise by a Finance Party of any
other right, power, discretion or remedy.
20.2 No oral variations No variation or amendment of any of the Security
Documents shall be valid unless in writing and signed on behalf of
the Finance Parties and the relevant Security Party.
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20.3 Severability If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not be
affected or impaired in any way.
20.4 Successors etc. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees
and assignees, and shall inure to the benefit of the Finance Parties
and their respective successors, transferees and assignees. Neither
the Borrower nor the Guarantor may assign or transfer any of its
rights or duties under or pursuant to any of the Security Documents
without the prior written consent of the Banks.
20.5 Further assurance If any provision of the Security Documents shall
be invalid or unenforceable in whole or in part by reason of any
present or future law or any decision of any court, or if the
documents at any time held by the Finance Parties on their behalf
are considered by the Banks for any reason insufficient to carry out
the terms of this Agreement, then from time to time the Borrower
and/or the Guarantor (as the case may be) will promptly, on demand
by the Agent, execute or procure the execution of such further
documents as in the reasonable opinion of the Banks are necessary to
provide adequate security for the repayment of the Indebtedness.
20.6 Other arrangements The Finance Parties may, without prejudice to
their rights under or pursuant to the Security Documents, at any
time and from time to time, on such terms and conditions as they may
in their discretion determine, and without notice to either the
Borrower or the Guarantor, grant time or other indulgence to, or
compound with, any other person liable (actually or contingently) to
the Finance Parties or any of them in respect of all or any part of
the Indebtedness, and may release or renew negotiable instruments
and take and release securities and hold funds on realisation or
suspense account without affecting the liabilities of the Borrower
and/or the Guarantor (as the case may be) or the rights of the
Finance Parties under or pursuant to the Security Documents.
20.7 Advisers The Borrower and the Guarantor irrevocably authorise the
Agent, at any time and from time to time during the Facility Period,
to consult insurance
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advisers on any matters relating to the Insurances, including,
without limitation, the collection of insurance claims, and from
time to time to consult or retain advisers or consultants to monitor
or advise on any other claims relating to the Vessels. The Borrower
and the Guarantor will provide such advisers and consultants with
all information and documents which they may from time to time
reasonably require and will reimburse the Agent on demand for all
reasonable costs and expenses incurred by the Agent in connection
with the consultation or retention of such advisers or consultants.
20.8 Delegation The Finance Parties may at any time and from time to time
delegate to any person any of their rights, powers, discretions and
remedies pursuant to the Security Documents, other than rights
relating to actions to be taken by an Instructing Group or the Banks
as a group on such terms as they may consider appropriate (including
the power to sub-delegate).
20.9 Rights etc. cumulative Every right, power, discretion and remedy
conferred on the Finance Parties under or pursuant to the Security
Documents shall be cumulative and in addition to every other right,
power, discretion or remedy to which they may at any time be
entitled by law or in equity. The Finance Parties may exercise each
of their rights, powers, discretions and remedies as often and in
such order as they deem appropriate subject to obtaining the prior
written consent of an Instructing Group. The exercise or the
beginning of the exercise of any right, power, discretion or remedy
shall not be interpreted as a waiver of the right to exercise any
other right, power, discretion or remedy either simultaneously or
subsequently.
20.10 No enquiry The Finance Parties shall not be concerned to enquire
into the powers of the Security Parties or of any person purporting
to act on behalf of any of the Security Parties, even if any of the
Security Parties or any such person shall have acted in excess of
their powers or if their actions shall have been irregular,
defective or informal, whether or not any Finance Parties had notice
thereof.
20.11 Continuing security The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall
have been repaid in full and none of the
85
Finance Parties shall be under any further actual or contingent
liability to any third party in relation to the Vessels, the
Insurances, Earnings or Requisition Compensation or any other matter
referred to in the Security Documents.
20.12 Security cumulative The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Finance Parties or any of them for or in respect
of all or any part of the Indebtedness, and shall not merge with or
prejudice or be prejudiced by any such security or any other
contractual or legal rights of any of the Finance Parties, nor
affected by any irregularity, defect or informality, or by any
release, exchange or variation of any such security. Section 93 of
the Law of Property Xxx 0000 and all provisions which the Agent
considers analogous thereto under the law of any other relevant
jurisdiction shall not apply to the security constituted by the
Security Documents.
20.13 Re-instatement If any Finance Party takes any steps to exercise any
of its rights, powers, remedies or discretions pursuant to the
Security Documents and the result shall be adverse to the Finance
Parties, the Borrower, the Guarantor and the Finance Parties shall
be restored to their former positions as if no such steps had been
taken.
20.14 No liability None of the Finance Parties, nor any agent or employee
of any Finance Party, nor any receiver and/or manager appointed by
the Agent, shall be liable for any losses which may be incurred in
or about the exercise of any of the rights, powers, discretions or
remedies of the Finance Parties under or pursuant to the Security
Documents nor liable as mortgagee in possession for any loss on
realisation or for any neglect or default of any nature for which a
mortgagee in possession might otherwise be liable unless such
Finance Party's action constitutes gross negligence or wilful
misconduct.
20.15 Rescission of payments etc. Any discharge, release or reassignment
by any of the Finance Parties of any of the security constituted by,
or any of the obligations of any Security Party contained in, any of
the Security Documents shall be (and be deemed always to have been)
void if any act (including, without limitation, any payment) as a
result of which such discharge, release or reassignment was given or
made is subsequently wholly or partially rescinded or avoided by
operation of
86
any law, unless such Finance Party's action constitutes gross
negligence or wilful misconduct.
20.16 Subsequent Encumbrances If the Agent receives notice of any
subsequent Encumbrance (other than any Encumbrance permitted by the
terms of this Agreement) affecting any Vessel, or all or any part of
the Insurances, Earnings or Requisition Compensation, the Agent may
open a new account in its books for the Borrower. If the Agent does
not open a new account, then (unless the Encumbrance is permitted by
the terms of this Agreement or the Agent gives written notice to the
contrary to the Borrower) as from the time of receipt by the Agent
of notice of such subsequent Encumbrance, all payments made to the
Agent shall be treated as having been credited to a new account of
the Borrower and not as having been applied in reduction of the
Indebtedness.
20.17 Releases If any Finance Party shall at any time in its discretion
release any party from all or any part of any of the Security
Documents or from any term, covenant, clause, condition or
obligation contained in any of the Security Documents, the liability
of any other party to the Security Documents shall not be varied or
diminished.
20.18 Certificates Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for
manifest error or on any question of law, be conclusive evidence as
against the Borrower or the Guarantor (as the case may be) of that
amount.
20.19 Survival of representations and warranties The representations and
warranties on the part of each of the Borrower and the Guarantor
contained in this Agreement shall survive the execution of this
Agreement and the advance of the facility or any part thereof.
20.20 Counterparts This Agreement may be executed in any number of
counterparts each of which shall be original but which shall
together constitute the same
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20.21 Third Party Rights Notwithstanding the provisions of the Contracts
(Rights of Third Parties) Xxx 0000, no term of this Agreement is
enforceable by a person who is not a party to it.
21 Law and Jurisdiction
21.1 Governing law This Agreement shall in all respects be governed by
and interpreted in accordance with English law.
21.2 Jurisdiction For the exclusive benefit of the Finance Parties, the
parties to this Agreement irrevocably agree that the courts of
England are to have jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement and that any
Proceedings may be brought in those courts. Each of the Borrower and
the Guarantor irrevocably waives any objection which it may now or
in the future have to the laying of the venue of any Proceedings in
any court referred to in this Clause, and any claim that those
Proceedings have been brought in an inconvenient or inappropriate
forum.
21.3 Alternative jurisdictions Nothing contained in this Clause shall
limit the right of the Finance Parties to commence any Proceedings
against either the Borrower or the Guarantor in any other court of
competent jurisdiction nor shall the commencement of any Proceedings
against either the Borrower or the Guarantor in one or more
jurisdictions preclude the commencement of any Proceedings in any
other jurisdiction, whether concurrently or not.
21.4 Service of process Without prejudice to the right of the Finance
Parties to use any other method of service permitted by law, each of
the Borrower and the Guarantor irrevocably agrees that any writ,
notice, judgment or other legal process shall be sufficiently served
on it if addressed to it and left at or sent by post to the Address
for Service, and in that event shall be conclusively deemed to have
been served at the time of leaving or, if posted, at 9.00 a.m. on
the third Business Day after posting by prepaid first class
registered post.
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
88
[SIGNED BY EACH PARTY'S AUTHORIZED REPRESENTATIVE ON 22 SEPTEMBER 2000]
SIGNED by )
duly authorised for and on behalf )
of BANK OF AMERICA N.A. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of THE BANK OF TOKYO- )
MITSUBISHI, LTD. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CHRISTIANIA BANK OG )
KREDITKASSE ASA )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CITIBANK N.A. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CREDIT INDUSTRIEL ET )
COMMERCIAL )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CREDIT LYONNAIS )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DEN NORSKE BANK ASA )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DEUTSCHE SCHIFFSBANK )
AKTIENGESELLSCHAFT )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of FORTIS CAPITAL CORP` )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of HSBC BANK PLC )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of THE ING (U.S.) CAPITAL LLC )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of KBC FINANCE IRELAND )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of LANDESBANK SCHLESWIG- )
HOLSTEIN GIRONZENTRALE )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of NATEXIS BANQUES POPULAIRES )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of THE ROYAL BANK OF SCOTLAND )
PLC )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of SCOTIABANK EUROPE PLC )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of SPAREBANKEN ROGALAND )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of VEREINS-UND WESTBANK AG )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of WHITNEY NATIONAL BANK )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DEN NORSKE BANK ASA )
(as the Agent and Security Trustee) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DEN NORSKE BANK ASA )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of BANC OF AMERICA )
SECURITIES LLC )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of SALOMON BROTHERS )
INTERNATIONAL LIMITED )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of HSBC BANK Plc )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of ING BARINGS LLC )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of BANK OF AMERICA N.A. )
(as Syndication Agent) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CITIBANK N.A. )
(as Syndication Agent) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of SALOMON BROTHERS )
INTERNATIONAL LIMITED )
(as Joint Book Manager) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of BANC OF AMERICA )
SECURITIES LLC )
(as Joint Book Manager) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of ING BARINGS LLC )
(as Documentation Agent) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of XXXXX COMEX )
SEAWAY FINANCE B.V. )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of XXXXX OFFSHORE S.A. )
in the presence of:- )
For the purposes of Article 1 of the Protocol annexed to the Convention on
jurisdictions and enforcement of judgements on civil and commercial matters
signed at Brussels on 27 September 1968, the following party expressly and
specifically agrees to the provisions of Clause 21.2 of the Agreement:-
SIGNED by _________________________
duly authorised for and on behalf of
XXXXX OFFSHORE S.A.
