EXHIBIT 99.4
DATED July 9, 2002
-------------------
XXXXX COMEX SEAWAY FINANCE B.V.
(as borrower)
- and -
XXXXX OFFSHORE S.A.
(as guarantor)
- and -
CITIBANK N.A.
DEN NORSKE BANK ASA
HSBC BANK PLC
ING CAPITAL LLC and
NORDEA BANK NORGE ASA,
Grand Cayman Branch
(as banks)
- and -
NORDEA BANK NORGE ASA,
Grand Cayman Branch
(as facility agent and security trustee)
-----------------------------------------
US$100,000,000 SECURED
MULTI-CURRENCY REVOLVING LOAN
FACILITY AGREEMENT
-----------------------------------------
XXXXXXXXXX XXXXXXX
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx XX0X 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
(Ref: 822/268)
CONTENTS
Page
1 Definitions and Interpretation.............................................1
2 The Facility and its Purpose..............................................17
3 Conditions Precedent and Subsequent.......................................21
4 Representations and Warranties............................................26
5 Currency..................................................................29
6 Repayment and Prepayment..................................................30
7 Interest..................................................................32
8 Guarantee and Indemnity...................................................33
9 Fees......................................................................38
10 Security Documents........................................................38
11 Agency and Trust..........................................................39
12 Covenants.................................................................48
13 Earnings..................................................................59
14 Events Of Default.........................................................60
15 Set-Off and Lien..........................................................64
16 Assignment and Sub-Participation..........................................66
17 Payments, Mandatory Prepayment, Reserve Requirements and Illegality.......68
18 Communications............................................................73
19 General Indemnities.......................................................74
20 Miscellaneous.............................................................76
21 Law and Jurisdiction......................................................80
SCHEDULE 1...................................................................82
The Banks, the Commitments and the Proportionate Shares..............82
SCHEDULE 2...................................................................83
The Shipowning Guarantors and the Vessels............................83
SCHEDULE 3...................................................................84
SCHEDULE 4...................................................................86
Form of Transfer Certificate.........................................86
APPENDIX A...................................................................90
APPENDIX B...................................................................91
APPENDIX C...................................................................92
APPENDIX D...................................................................95
Subordinated Note....................................................95
APPENDIX E...................................................................99
Disclosure Letter....................................................99
LOAN FACILITY AGREEMENT
Dated: July 9, 2002
BETWEEN:-
(1) XXXXX COMEX SEAWAY FINANCE B.V. which is a company incorporated according
to the law of The Netherlands with its registered office at Karel
Xxxxxxxxxx 00, Xxxxxxxx, 000 0XX, Xxx Xxxxxxxxxxx (the "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) NORDEA BANK NORGE ASA, Grand Cayman Branch, acting as facility agent and
security trustee through its office at 437 Madison Avenue, 21st Floor, New
York, New York 10022, United States of America (in that capacity "the
Agent").
WHEREAS:-
(A) Each of the Vessels is registered in the name and ownership of the
Shipowning Guarantor under the flag of the country indicated in Schedule 2.
(B) Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate principal amount not exceeding one hundred
million Dollars ($100,000,000) or the Equivalent Amount in a Permitted
Currency or Permitted Currencies (as appropriate) in order to allow the
Borrower and/or other members of the SO Group to recoup costs expended in
funding the acquisition of the Vessels and other acquisitions and capital
expenditure made since 22 September 2000 or to be made in the future.
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 Administration" has the meaning given to it in
paragraph 1.1.3 of the ISM Code.
1.1.4 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.
1.1.5 "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").
1.1.6 "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.
1.1.7 "the Borrower's Security Documents" means those of the
Security Documents to which the Borrower is or is to be a
party.
1.1.8 "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
2
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.
1.1.9 "Business Day" means (a) a day on which banks are open for
the transaction of business of the nature contemplated by
this Agreement (and not authorised by law to close) in New
York City, United States of America; London, England; Oslo,
Norway; and (b) in relation to the determination of interest
rates for euros only, a day on which the Trans-European
Automated Real Time Gross Settlement Express System (TARGET)
is operating.
1.1.10 "Certificate of Compliance" means a certificate materially
in the form set forth in Schedule 3, signed by the finance
director or similar officer of the Guarantor.
1.1.11 "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 shares determined, on a per vote basis, of the
Guarantor than those owned by SNSA.
1.1.12 "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
3
context permits, the amount of the Facility advanced by that
Bank and remaining outstanding.
1.1.13 "Commitment Commission" means the commitment commission to
be paid by the Borrower to the Agent pursuant to Clause 9.2.
1.1.14 a "Communication" means any notice, approval, demand,
request or other communication from one party to this
Agreement to any other party to this Agreement.
1.1.15 "the Communications Address" means c/x Xxxxx Offshore M.S.
Limited of 1st Floor, Xxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxx-xx-Xxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxx, fax no:
x(00) 0000 000000 marked for the attention of Xxxxxxx
Xx-Xxxx.
1.1.16 "the Company" means, in relation to either 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.
1.1.17 "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.
1.1.18 "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.
1.1.19 "converted" means actually or notionally (as the case may
require) converted by the Agent, at the rate at which the
Agent, in accordance with
4
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.
1.1.20 "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.
1.1.21 "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 Mandatory Cost.
1.1.22 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
1.1.23 "Dollars" and "$" each means available and freely
transferable and convertible funds in lawful currency of the
United States of America.
1.1.24 "Drawdown Notice" means a notice complying with Clause 2.3.
1.1.25 "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.
1.1.26 "Drydock Completion Date" means the date on which m.v.
"SEAWAY POLARIS" has (i) completed her upgrade and special
survey in drydock at Portnet, Cape Town, South Africa (the
"Shipyard") and (ii) been re-delivered to the Shipowning
Guarantor and is no longer in the possession of the Shipyard
and/or the contractors, Dorbyl Marine.
1.1.27 "Earnings" means all hires, freights, pool income and other
sums payable to or for the account of the Shipowing
Guarantor in respect of the Vessels including (without
limitation) all remuneration for salvage and towage
services, demurrage and detention moneys, contributions in
general average, compensation in respect of any requisition
for hire and damages
5
and other payments (whether awarded by any court or arbitral
tribunal or by agreement or otherwise) for breach,
termination or variation of any contract for the operation,
employment or use of the Vessels.
1.1.28 "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.
1.1.29 "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.
1.1.30 "Equivalent Amount" means the amount of any Permitted
Currency converted from the relevant amount of Dollars.
1.1.31 "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).
1.1.32 "Event of Default" means any of the events set out in Clause
14.2.
1.1.33 "Execution Date" means the date on which this Agreement is
executed by each of the parties thereto.
1.1.34 "the Existing Loan" means the aggregate total amount
outstanding under the Existing Loan Agreement.
1.1.35 "Existing Loan Agreement" means the $440,000,000
multicurrency revolving credit agreement dated 22 September
2000 made between (inter alios) the Borrower as borrower,
Xxxxx Offshore SA as guarantor, the Banks and others, as
lenders, Den norske Bank ASA as facility agent and security
trustee and Den norske Bank ASA and others as arrangers.
1.1.36 "Facility" means the multi-currency revolving credit
facility made available by the Banks to the Borrower
pursuant to this Agreement.
6
1.1.37 "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.
1.1.38 "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.
1.1.39 "the Fee Letter" means the letter (in the form attached at
Appendix F) and the summary of terms from the Agent and the
Banks 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.
1.1.40 "the Finance Parties" means the Banks and the Agent.
1.1.41 "First Reduction Date" means the date falling eighteen (18)
months after the Execution Date.
1.1.42 "the Guarantee" means the guarantee and indemnity of the
Guarantor contained in Clause 8.
1.1.43 "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.
1.1.44 "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 and the Fee Letter; 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.
7
1.1.45 an "Instructing Group" means any one or more Banks whose
combined Proportionate Shares equal or exceed sixty per
centum (60%).
1.1.46 "Insurances" means all policies and contracts of insurance
(including but not limited to hull and machinery, all
entries in protection and indemnity or war risks
associations) which are from time to time taken out or
entered into in respect of or in connection with the Vessels
or their increased value and (where the context permits) all
benefits thereof, including all claims of any nature and
returns of premium.
1.1.47 "Interest" means interest at the Default Rate.
1.1.48 "Interest Payment Date" means each date for the payment of
interest in accordance with Clause 7.
1.1.49 "Interest Period" means each interest period selected by the
Borrower or agreed by the Agent pursuant to Clause 7.
1.1.50 "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.
1.1.51 "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).
1.1.52 "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 Account of
amounts equal to the amount of the relevant Drawing for a
8
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.
1.1.53 "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.
1.1.54 "Management Agreement" means, in relation to either Vessel
which is leased to a party outside the SO Group, the
Management Agreement made between the Managers and the
Shipowning Guarantor.
1.1.55 "Mandatory Cost" means the addition to the interest rate to
compensate the Banks for the cost of compliance with (a) the
requirements of the Bank of England and/or the Financial
Services Authority (or, in either case, any other authority
which replaces all or any of its functions) and/or (b) the
requirements of the European Central Bank, determined in
accordance with Appendix C.
1.1.56 "Margin" based on the ratio of Consolidated Debt to EBITDA
for the preceding four fiscal quarters ("D/EBITDA") during
the Facility Period means:-
(i) 1.00% where D/EBITDA is less than 1;
(ii) 1.25% where D/EBITDA is equal to or greater than 1
but less than 2;
(iii) 1.375% where D/EBITDA is equal to or greater than
2 but less than 3;
(iv) 1.625% where D/EBITDA is equal to or greater than
3.
9
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 and 30
November each year (each a "Margin Review Date") commencing
31 May 2002 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.
1.1.57 "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.
1.1.58 "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.
1.1.59 "the Mortgages" means the first preferred mortgages referred
to in Clause 10.1 (each a "Mortgage").
1.1.60 "Norwegian Kroner" means available and freely transferable
and convertible funds in the lawful currency of the Kingdom
of Norway.
1.1.61 "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.
1.1.62 "Permitted Currency" means Dollars, the euro, each of the
lawful currencies of Norway (namely Norwegian Kroner), the
United Kingdom (namely Pounds Sterling) and any other
eurocurrency provided that each such currency selected by
the 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.
10
1.1.63 "Permitted Indebtedness" means the Existing Loan, Short Term
Permitted Indebtedness, Subordinated Debt up to one hundred
million Dollars ($100,000,000) and Additional Permitted
Indebtedness.
1.1.64 "Permitted Liens" means (i) liens for salvage and any
Encumbrance created in favour of the Banks and/or the Agent
by the Security Documents or which otherwise has the prior
written approval of the Agent acting upon the instructions
of all the Banks, (ii) any Encumbrance arising either by
operation of law or in the ordinary course of the business
of the relevant Security Party which is discharged in the
ordinary course of business but in any event does not exist
for more than sixty (60) days, or (iii) Encumbrances created
pursuant to the Existing Loan Agreement and existing on the
Execution Date.
1.1.65 "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.
1.1.66 "Pounds Sterling" means pounds sterling being the available
and freely transferable and convertible funds in the lawful
currency of the United Kingdom.
1.1.67 "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.
1.1.68 "Proceedings" means any suit, action or proceedings begun by
any of the Finance Parties arising out of or in connection
with the Security Documents.
1.1.69 "Proportionate Share" means, for each Bank, the percentage
indicated against the name of that Bank in Schedule 1, as
amended by any Transfer Certificate executed from time to
time.
1.1.70 "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
11
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.
1.1.71 "Reduction Date" means the First Reduction Date and each
date falling at consecutive six (6) monthly intervals
thereafter.
1.1.72 "Reference Banks" means the Agent, Citibank N.A., Den norske
Bank ASA, HSBC Bank Plc and ING Capital LLC.
1.1.73 "Requisition Compensation" means all compensation or other
money which may from time to time be payable to the
Shipowning Guarantor as a result of either Vessel being
requisitioned for title or in any other way compulsorily
acquired (other than by way of requisition for hire).
1.1.74 "the Security Documents" means this Agreement, the
Mortgages, the Assignments, the Shipowner's 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.
1.1.75 "Security Parties" means the Borrower, the Guarantor, the
Shipowning Guarantor 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.
1.1.76 "the Shipowner's Guarantee" means guarantee and indemnity of
the Shipowning Guarantor referred to in Clause 10.3.
1.1.77 "the Shipowning Guarantor" means Class 3 Shipping Limited
which is a company incorporated according to the law of
Bermuda with its registered office at Xxxxxxxxx Xxxxx, 0
Xxxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx.
1.1.78 "Short Term Permitted Indebtedness" means any indebtedness
of the SO Group (other than the Existing Loan and
intercompany indebtedness of the SO Group and/or the SNSA
Group) incurred for working capital
12
and short term liquidity in an amount of up to seventy five
million Dollars ($75,000,000).
1.1.79 "SMC" in relation to m.v. "SEAWAY POLARIS", means a valid
safety management certificate issued for that Vessel by or
on behalf of the Administration pursuant to paragraph 13.4
of the ISM Code.
1.1.80 "SMS" in relation to m.v. "SEAWAY POLARIS", means a safety
management system for that Vessel developed and implemented
in accordance with the ISM Code and including the functional
requirements, duties and obligations required by the ISM
Code.
1.1.81 "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.
1.1.82 "SNSA Group" means SNSA and its Subsidiaries.
1.1.83 "SO Group" means the Guarantor and its Subsidiaries.
1.1.84 "Subordinated Debt" means any debt from any member(s) of the
SNSA Group upon the terms contained in a Subordinated Note.
1.1.85 "Subordinated Note" means a note substantially in the form
of Appendix D.
1.1.86 "Subsidiary" means a subsidiary undertaking, as defined in
section 258 Companies Act 1985 or any analogous definition
under any other relevant system of law.
1.1.87 "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.
1.1.88 "Synthetic Leases" means any leasing structure that
qualifies as an operating lease for financial reporting
purposes but is considered a loan for applicable income or
corporation tax purposes.
13
1.1.89 "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.
1.1.90 "the Termination Date" means the date falling four (4) years
after the Execution Date.
1.1.91 "Total Loss", in relation to either 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 Shipowning Guarantor
within two months after the capture, seizure, arrest,
detention or confiscation in question.
1.1.92 "Transfer Certificate" means a certificate materially in the
form set forth in Schedule 4 signed by a Bank and a
Transferee whereby:
(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.
1.1.93 "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.
14
1.1.94 "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.
1.1.95 "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).
1.1.96 "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 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.
1.1.97 "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
15
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.
1.1.98 "the Vessels" means the vessels listed in Schedule 2 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;
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;
16
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 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
17
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 Clauses 2.3
and 2.10, 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 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 three 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.
18
2.4 Facility Reduction
2.4.1 The amount of the Facility available to the Borrower for
drawing under this Agreement shall be one hundred million
Dollars ($100,000,000) or the Equivalent Amount in any other
Permitted Currency during the period from the Execution Date
until the First Reduction Date. On each Reduction Date the
amount of the Facility available for drawing shall reduce by
ten million Dollars ($10,000,000). 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 three (3) Business
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 Vessel 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.
19
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 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.
2.10 Additional Restriction on Drawings It is hereby agreed that
notwithstanding the provisions of this Clause 2 that the Borrower may
not borrow more than
20
eighty seven million four hundred thousand Dollars ($87,400,000) under
the Facility until such time as the Drydock Completion Date has
occurred. On the Drydock Completion Date the Maximum Facility Amount
shall be available to the Borrower for drawing subject to the terms
and conditions contained in this Agreement.
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 Letter 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
21
and (ii) issued by each Security Party's company registry
confirming due incorporation and valid existence and (when
such information is maintained by the registry) the names of
its directors and shareholders.
3.1.4 Power of attorney The power of attorney (notarially
attested and legalised, if necessary, for registration
purposes) of each of the Security Parties 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:-
(a) any time charterparty or bareboat charterparty for each
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 each Vessel which
is in force at the time of this Agreement; and
(c) each Vessel's current Safety Construction, Safety
Equipment, Safety Radio and Load Line Certificates;
(d) if required by law and either 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) the current SMC for m.v. "SEAWAY POLARIS"; 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 that such Vessel
is on the first Advance Date owned by the Shipowning
Guarantor and free of registered Encumbrances.
22
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 and
(ii) subordinate all their rights in relation to the Vessels
to those of the Finance Parties.
3.1.14 The Fee Letter The Fee Letter countersigned on behalf of
the Borrower and the Guarantor by way of acceptance of its
terms.
23
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 (i) consolidated audited accounts of the
Guarantor for its financial year just ended and (ii) most
recent unaudited financial statements of the Guarantor in
each case, certified, by a director or the chief financial
officer of Xxxxx Offshore M.S. Limited as agent for the
Guarantor, as fair and accurate.
3.1.17 Material Adverse Change Evidence that no material adverse
change has occurred in the business, assets, operations,
conditions (financial or otherwise) or prospects of the
Guarantor or its Subsidiaries from those disclosed in the
Guarantor's most recently filed Form 20-F Annual Report
pursuant to Section 13 or 15(d) of the United States
Securities Exchange Xxx 0000, or in the facts and
information regarding such entities as represented to date.
3.1.18 Corporate Structure Evidence of the actual corporate
structure of the SO Group.
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.
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.
24
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).
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;
25
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 4.13 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 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.
26
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.
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 or listed in Appendix E, there is no action,
suit, arbitration or administrative proceeding nor any contemplated
action, suit, arbitration or administrative proceeding pending or to
its knowledge about to be pursued before any court, tribunal or
governmental or other authority which would, or would be likely to,
have a materially adverse effect on the business, assets, financial
condition or creditworthiness of the SO Group.
27
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 None of the Security Parties has, at the date of this
Agreement, an established place of business in the United Kingdom or
the United States of America.
4.11 Use of Facility 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, the Shipowning Guarantor is and will remain
throughout the Facility Period a directly or indirectly wholly owned
subsidiary of the Guarantor.
4.13 Material Adverse Change There has been no material adverse change in
the financial condition of the Borrower or the Guarantor from that
disclosed in the Guarantor's most recently filed Form 20-F Annual
Report pursuant to Section 13 or 15(d) of the United States Securities
Xxxxxxxx Xxx 0000.
4.14 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 1 July 2001 (Vrijstellingsregeling Wet Toezicht
Kredietwezen 1992) 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
28
notice requirements to the Dutch central bank pursuant to the Foreign
Financial Relations Act ("Wet Financiele Betrekkingen Buitenland")
1994 (as the same may be amended from time to time) have been complied
with and shall throughout the Facility Period continue to be complied
with.
4.15 Guarantor's company Status That the Guarantor operates as a financial
holding company under Luxembourg law pursuant to the terms of a letter
of the "Administration de l'Enregistrement et des Domaines" dated 9
September 1994.
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
29
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.
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.
31
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 Agent) provided that it has first given
to the Agent not fewer than five (5) Business 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 either 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
32
Dollar Amount as will ensure that the Original Dollar Amount is not
greater than 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 third 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 the aggregate
of (a) the applicable Margin, (b) LIBOR and, if applicable, (c) the
Mandatory Cost 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 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
33
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
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
33
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;
(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
34
(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 (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.
35
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 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
36
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 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.
37
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 Letter in the
amounts and on the dates set out in the Fee Letter.
9.2 The Borrower shall pay to the Agent Commitment Commission in Dollars
at the rate equal to forty five per cent (45%) 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 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 a first preferred mortgage over each Vessel;
38
10.2 the Assignments a deed of assignment of the Insurances, Earnings and
Requisition Compensation of each Vessel; and
10.3 the Shipowner's Guarantee the guarantee and indemnity of the
Shipowning Guarantor.
11 Agency and Trust
11.1 Appointment Each of the Banks appoints the Agent its agent for the
purpose of administering the Facility and the Security Documents and
authorises the Agent and its directors, officers, employees and agents
acting on the instructions from time to time of an Instructing Group,
and subject to Clauses 11.4 and 11.19, to execute the Security
Documents on its behalf and to exercise all rights, powers,
discretions and remedies vested in the Banks under or pursuant to the
Security Documents, together with all powers reasonably incidental to
them.
11.2 Authority Subject to Clause 11.4, each of the Banks irrevocably
authorises the Agent, acting on the instructions from time to time of
an Instructing Group:-
11.2.1 to give or withhold any consents or approvals;
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 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
39
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 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 the Security Documents,
agree to waive the payment of any sum of money payable by
any of the Security Parties under the Security Documents;
nor
11.4.3 change the meaning of the expression "Instructing Group";
nor
40
11.4.4 exercise, or refrain from exercising, any discretion, or
give or withhold any consent, the exercise or giving of
which is, by the terms of this Agreement, expressly reserved
to the Banks; nor
11.4.5 extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security
Documents; nor
11.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the
obligations of a Bank under any of the Security Documents;
nor
11.4.7 agree to change the currency in which any sum is payable
under the Security Documents (other than in accordance with
the terms of the Security Documents); nor
11.4.8 agree to amend this Clause 11.4; nor
11.4.9 agree to amend Clauses 1.1.56, 1.1.57, 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 for anything done or
omitted to be done by the Agent under or in connection with the
Security Documents unless as a result of the Agent's wilful misconduct
or gross negligence.
11.6 Acknowledgement Each of the Banks acknowledges that:-
11.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents
or by any other person acting or purporting to act on behalf
of the Agent to induce it to enter into any of the Security
Documents;
11.6.2 it has made and will continue to make without reliance on
the Agent, and based on such documents and other evidence as
it considers appropriate, its own independent investigation
of the financial condition and affairs of the Security
Parties in connection with the making and continuation of
the Facility;
11.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
41
11.6.4 the Agent shall not have any duty or responsibility at any
time to provide it with any credit or other information
relating to any of the Security Parties unless that
information is received by the Agent pursuant to the express
terms of the Security Documents.
Each of the Banks agrees that it will not assert nor seek to assert
against any director, officer, employee or agent of the Agent or
against any other person acting or purporting to act on behalf of the
Agent any claim which it might have against them in respect of any of
the matters referred to in this Clause.
11.7 Limitations on responsibility The Agent shall have no responsibility
to any of the Security Parties or to the Banks on account of:-
11.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the
Security Documents;
11.7.2 the financial condition of any of the Security Parties;
11.7.3 the completeness or accuracy of any statements,
representations or warranties made in or pursuant to any of
the Security Documents, or in or pursuant to any document
delivered pursuant to or in connection with any of the
Security Documents;
11.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any
document executed or delivered pursuant to or in connection
with any of the Security Documents.
11.8 The Agent's rights The Agent may:-
11.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to
any of the Security Documents are true and complete, unless,
in its capacity as the Agent, it has acquired actual
knowledge to the contrary; and
11.8.2 assume that no Event of Default or Potential Event of
Default has occurred unless, in its capacity as the Agent,
it has acquired actual knowledge to the contrary; and
42
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
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
43
occurrence of any Event of Default or Potential Event of Default
unless a Bank or any of the Security Parties shall have given written
notice thereof to the Agent.
11.11 Other business The Agent may, without any liability to account to the
Banks, generally engage in any kind of banking or trust business with
any of the Security Parties or any of their respective Subsidiaries or
associated companies or with a Bank as if it were not the Agent.
11.12 Indemnity The Banks shall, promptly on the Agent's request, reimburse
the Agent in their respective Proportionate Shares, for, and keep the
Agent fully indemnified in respect of:-
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 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
44
the exception of any amounts payable pursuant to Clause 9.1 and/or the
Fee Letter and any amounts which, by the terms of the Security
Documents, are paid to the Agent for the account of the Agent alone or
specifically for the account of one or more Banks) and until so paid
such amount shall be held by the Agent on trust absolutely for that
Bank.
11.15 Reimbursement The Agent shall have no liability to pay any sum to a
Bank until it has itself received payment of that sum. If, however,
the Agent does pay any sum to a Bank on account of any amount
prospectively due to it pursuant to Clause 11.14 before it has itself
received payment of that amount, and the Agent does not in fact
receive payment within five Business Days after the date on which that
payment was required to be made by the terms of the Security Documents
or the Mortgagees' Insurances, the recipient will, on demand by the
Agent, refund to the Agent an amount equal to the amount received by
it, together with an amount sufficient to reimburse the Agent for any
amount which the Agent may certify that it has been required to pay by
way of interest on money borrowed to fund the amount in question
during the period beginning on the date on which that amount was
required to be paid by the terms of the Security Documents or the
Mortgagees' Insurances and ending on the date on which the Agent
receives reimbursement.
11.16 Redistribution of payments Unless otherwise agreed between the Finance
Parties, if at any time a Bank receives or recovers by way of set-off,
the exercise of any lien or otherwise (other than from any assignee or
transferee of or sub-participant in that Bank's Commitment), an amount
greater than that Bank's Proportionate Share of any sum due from any
of the Security Parties under the Security Documents (the amount of
the excess being referred to in this Clause as the "Excess Amount")
then:-
11.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
11.16.2 that Bank shall pay to the Agent an amount equal to the
Excess Amount within ten days of its receipt or recovery of
the Excess Amount; and
11.16.3 the Agent shall treat that payment as if it were a payment
by the Security Party in question on account of the sum owed
to the Banks as
45
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.
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
46
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:-
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;
47
11.22.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been
a party to this Agreement.
11.23 No fiduciary relationship Except as provided in Clauses 11.3 and
11.14, the Agent shall not have any fiduciary relationship with or be
deemed to be a trustee of or for a Bank and nothing contained in any
of the Security Documents shall constitute a partnership between any
two or more Banks or between the Agent and any Bank.
11.24 The Agent as a Bank The expression "the Banks" when used in the
Security Documents includes the Agent in its capacity as one of the
Banks. The Agent shall be entitled to exercise its rights, powers,
discretions and remedies under or pursuant to the Security Documents
in its capacity as one of the Banks in the same manner as any other
Bank and as if it were not also the Agent.
11.25 The Agent as security trustee Unless the context otherwise requires,
the expression "the Agent" when used in the Security Documents
includes the Agent acting in its capacities both as agent and security
trustee.
12 Covenants
Each of the 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)
any Encumbrance existing on the date of this Agreement and
listed in Appendix B or (ii) any Encumbrance relating to
assets which become the property of the SO Group after the
date of this Agreement (including accounts receivable
attributable thereto where such accounts receivables
security interest is ancillary to the security interest in
48
the associated fixed costs as part of an asset based
financing) and (iii) Permitted Liens; nor
12.1.2 chartering without the prior written consent of an
Instructing Group, (a) charter either Vessel or permit
either 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 (together
the "Permitted Charters") or (b) following the occurrence
and during the continuation of an Event of Default, let
either 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
49
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, 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,
either Vessel or the 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
50
under the flags and ownerships indicated in Schedule 2 for
the duration of the Facility Period unless otherwise
approved by an Instructing Group in writing.
12.2.2 Additional security If and so often as the aggregate of any
Valuations of the Vessels plus the value of any additional
security (other than cash) for the time being provided to
the Banks (or to the Agent on their behalf) pursuant to this
Clause shall be less than one hundred and twenty per centum
(120%) of the Original Dollar Amount (less the amount of any
cash deposited as additional security pursuant to this
Clause) the 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.
51
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
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 (together in each case, where the item is
generally available in printed form, with a copy for
distribution by the Agent to each of the Banks):-
(a) its annual unaudited financial statements for each
financial year of the Borrower ending during the
Facility Period, containing (amongst other things) the
Borrower's profit and loss account
52
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
(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.
53
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 Financial
Responsibility pursuant to the United States Oil Pollution
Xxx 0000.
12.2.6 ISM Code compliance In respect of "SEAWAY POLARIS" 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.
54
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. 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 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
55
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 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,
56
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
1 July 2001 (Vrijstellingsregeling Wet Toezicht Kredietwezen
1992) 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
Betrekkingen Buitenland") 1994 (as the same may be amended
from time to time), 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,
unless otherwise agreed by an Instructing Group.
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, unless otherwise
agreed by an Instructing Group.
12.2.20 Subordinated Debt The Borrower and the Guarantor shall
ensure that throughout the Facility Period any Subordinated
Debt shall be provided on the terms of the Subordinated
Note, unless otherwise agreed by an Instructing Group.
12.2.21 Sale of Assets Unless otherwise agreed by an Instructing
Group, the sale of assets of the SO Group shall not at any
time during each fiscal year falling within the Facility
Period exceed fifty million Dollars ($50,000,000) or the
equivalent in any other currency in aggregate.
57
Notwithstanding the foregoing, unless otherwise agreed by an
Instructing Group, the maximum cumulative aggregate amount
for the sale of assets of the SO Group during the Facility
Period shall not exceed one hundred and fifty million
Dollars ($150,000,000) or the equivalent in any other
currency. In this Clause the sale of assets includes (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 shall be 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.
12.2.22 Synthetic Leases Unless otherwise agreed by an Instructing
Group, throughout the Facility Period the Borrower and the
Guarantor shall ensure that the total aggregate amount
outstanding under any Synthetic Lease shall not exceed fifty
million Dollars ($50,000,000).
12.3 Guarantor's Financial Covenants
12.3.1 Unless otherwise agreed by an Instructing Group, 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 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;
58
(c) on a rolling four fiscal quarter basis, maintain a
D/EBITDA ratio of a maximum of:-
3.50:1 during the period commencing on the Execution
Date 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 Indebtedness") (i) in an amount of up to the
difference between four hundred and forty million
Dollars ($440,000,000) and the total available
commitments of the lenders under the Existing Loan
Agreement at such time and (ii) for acquisitions and/or
capital expenditure if on a pro forma basis D/EBITDA
does not exceed the ratios specified in Clause 12.3.1
(c) 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.
59
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
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
60
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
(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
61
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 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 either 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:-
62
(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, 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 either
Vessel or either Mortgage becomes void or voidable or liable
to cancellation or termination; or
14.2.15 war if the country of registration of either 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 the Shipowning
Guarantor gives notice to the Agent to determine its
obligations under the Guarantee or the Shipowner's
Guarantee, as appropriate; or
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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 either 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) the 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 either 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
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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.
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.
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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.
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:
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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 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 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.
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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
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.
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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
Agent an original receipt issued by the relevant authority, or other
evidence reasonably acceptable to the Banks, evidencing the payment to
that authority of all amounts required to be deducted or withheld. If
the 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, but without
substantially interfering with the businesses operations of that Bank,
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.
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17.6 Change in law If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any law,
or in compliance with any request or requirement from any central bank
or any fiscal, monetary or other authority:-
17.6.1 any Finance Party (or the holding company of any Finance
Party) shall be subject to any Tax with respect to payments
of all or any part of the Indebtedness; or
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
70
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.
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
71
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)
421 4420) marked for the attention of: Shipping Offshore &
Oil Services; 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: +
(000) 000-0000) Attention: Xxxx X. Xxxxxxxxx, provided that
the failure to deliver such copy shall not affect the rights
of any party under this Agreement;
or to such other address or fax number as the Finance Parties, the
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.
Any Communication by fax shall be promptly confirmed in writing by
post or hand delivery.
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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
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
74
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.
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
75
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.
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.
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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 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
77
Instructing Group or the Banks as a group on such terms as they may
consider appropriate (including the power to sub-delegate).
20.9 Rights etc. cumulative Every right, power, discretion and remedy
conferred on the Finance Parties under or pursuant to the Security
Documents shall be cumulative and in addition to every other right,
power, discretion or remedy to which they may at any time be entitled
by law or in equity. The Finance Parties may exercise each of their
rights, powers, discretions and remedies as often and in such order as
they deem appropriate subject to obtaining the prior written consent
of an Instructing Group. The exercise or the beginning of the exercise
of any right, power, discretion or remedy shall not be interpreted as
a waiver of the right to exercise any other right, power, discretion
or remedy either simultaneously or subsequently.
20.10 No enquiry The Finance Parties shall not be concerned to enquire into
the powers of the Security Parties or of any person purporting to act
on behalf of any of the Security Parties, even if any of the Security
Parties or any such person shall have acted in excess of their powers
or if their actions shall have been irregular, defective or informal,
whether or not any Finance Parties had notice thereof.
20.11 Continuing security The security constituted by the Security Documents
shall be continuing and shall not be satisfied by any intermediate
payment or satisfaction until the Indebtedness shall have been repaid
in full and none of the Finance Parties shall be under any further
actual or contingent liability to any third party in relation to the
Vessels, the Insurances, Earnings or Requisition Compensation or any
other matter referred to in the Security Documents.
20.12 Security cumulative The security constituted by the Security Documents
shall be in addition to any other security now or in the future held
by the Finance Parties or any of them for or in respect of all or any
part of the Indebtedness, and 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.
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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 or any special, indirect,
consequential or punitive damages which may be incurred under or in
connection with the Security Documents or the transactions
contemplated thereunder, nor liable as mortgagee in possession for any
loss on realisation or for any neglect or default of any nature for
which a mortgagee in possession might otherwise be liable unless such
Finance Party's action constitutes gross negligence or wilful
misconduct. Each of the Borrower and the Guarantor waives, releases
and agrees (for itself and on behalf of its Subsidiaries) not to xxx
on any such claim for any such losses or damages whether or not
accrued and whether or not known or expected to exist in its favour,
except in the event that such party alleges gross negligence or wilful
misconduct.
20.15 Rescission of payments etc. Any discharge, release or reassignment by
any of the Finance Parties of any of the security constituted by, or
any of the obligations of any Security Party contained in, any of the
Security Documents shall be (and be deemed always to have been) void
if any act (including, without limitation, any payment) as a result of
which such discharge, release or reassignment was given or made is
subsequently wholly or partially rescinded or avoided by operation of
any law, unless such Finance Party's action constitutes gross
negligence or wilful misconduct.
20.16 Subsequent Encumbrances If the Agent receives notice of any subsequent
Encumbrance (other than any Encumbrance permitted by the terms of this
Agreement) affecting either 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
79
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.
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
80
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.
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SIGNED by /s/ XXXXXXX X. XXXXXXXXX )
Xxxxxxx X. Xxxxxxxxx )
Managing Director )
Senior Credit Officer )
duly authorised for and on behalf )
of CITIBANK N.A. )
(as a Bank) )
in the presence of:-/s/ XXXXXXX XXXXX )
Xxxxxxx Xxxxx
000 Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
SIGNED by /s/ XXXXXX XXXXXX )
Xxxxxx Xxxxxx )
ATTORNEY-IN-FACT )
duly authorised for and on behalf )
of DEN NORSKE BANK ASA )
(as a Bank) )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XX XXXXXXX )
duly authorised for and on behalf )
of HSBC BANK PLC )
(as a Bank) )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XXXXXX XXXXXX )
Xxxxxx Xxxxxx )
ATTORNEY-IN-FACT )
duly authorised for and on behalf )
of ING CAPITAL LLC )
(as a Bank) )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XXXXXX XXXXXX )
Xxxxxx Xxxxxx )
ATTORNEY-IN-FACT )
duly authorised for and on behalf )
of NORDEA )
BANK NORGE ASA, Grand Cayman Branch )
(as a Bank) )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XXXXXX XXXXXX )
Xxxxxx Xxxxxx )
ATTORNEY-IN-FACT )
duly authorised for and on behalf )
of NORDEA )
BANK NORGE ASA, Grand Cayman Branch )
(as the Agent and Security Trustee) )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XXXXXXX XX-XXXX )
duly authorised for and on behalf )
of XXXXX COMEX )
SEAWAY FINANCE B.V. )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
SIGNED by /s/ XXXXXXX XX-XXXX )
duly authorised for and on behalf )
of XXXXX OFFSHORE S.A. )
in the presence of:- /s/ SIMON ELPHICU )
Simon Elphicu
Trainee Solicitor
Xxxxxxxxxx Xxxxxxx
Xxx, Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
