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EXHIBIT 10.6
LOAN AGREEMENT
==============
Dated 19th December, 1995
between
GULF OFFSHORE N.S. LIMITED
as Borrower
-and-
CHRISTIANIA BANK OG KREDITKASSE
as Lender and Security Trustee
relating to
a Pound Sterling 4,890,000 facility
XXXXXX, XXXXXX & XXXXXXXX
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CONTENTS
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CLAUSE PAGE
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1 INTERPRETATION 1
2 FACILITY 8
3 DRAWDOWN 8
4 INTEREST 9
5 INTEREST PERIODS 9
6 DEFAULT INTEREST 10
7 REPAYMENT AND PREPAYMENT 11
8 CONDITIONS PRECEDENT 12
9 REPRESENTATIONS AND WARRANTIES 13
10 GENERAL UNDERTAKINGS 14
11 CORPORATE UNDERTAKINGS 17
12 SECURITY COVER 19
13 PAYMENTS AND CALCULATIONS 20
14 APPLICATION OF RECEIPTS 21
15 APPLICATION OF EARNINGS 22
16 EVENTS OF DEFAULT 22
17 FEES AND EXPENSES 26
18 INDEMNITIES 28
19 NO SET-OFF OR TAX DEDUCTION 30
20 ILLEGALITY, ETC 30
21 INCREASED COSTS 31
22 CHANGES IN CIRCUMSTANCES 32
23 SET-OFF 33
24 TRANSFERS AND CHANGES IN LENDING OFFICES 33
25 VARIATIONS AND WAIVERS 36
26 NOTICES 36
27 THE SECURITY TRUSTEE 38
28 SUPPLEMENTAL 42
29 LAW AND JURISDICTION 42
EXECUTION
SCHEDULE 1 DRAWDOWN NOTICE
SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS
SCHEDULE 3 TRANSFER CERTIFICATE
SCHEDULE 4 COMPLIANCE CERTIFICATE
APPENDIX A FORM OF MORTGAGE
APPENDIX B FORM OF DEED OF COVENANT
APPENDIX C FORM OF ACCOUNT SECURITY DEED
APPENDIX D FORM OF GUARANTEE
APPENDIX E FORM OF COLLATERAL MORTGAGE
APPENDIX F FORM OF COLLATERAL GENERAL ASSIGNMENT
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LOAN AGREEMENT made on the 19th day of December, 1995
==============
BETWEEN
========
(1) GULF OFFSHORE N.S. LIMITED, a company incorporated in England with
company number 2541716, whose registered office is at 00 Xxxxxxxxx Xxxx, Xxxxxx
XX00 0XX, Xxxxxxx (xxx "Borrower");
(2) CHRISTIANIA BANK OG KREDITKASSE, acting through its office at
Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx, as Lender; and
(3) CHRISTIANIA BANK OG KREDITKASSE, acting through its office at
Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx, as Security Trustee.
WHEREAS the Lender has agreed to make available to the Borrower a facility of
Pound Sterling 4,890,000 to assist the Borrower to finance the acquisition of
the platform supply vessel "Atlantic Warrior" from SPO MPV Limited pursuant to
a Memorandum of Agreement dated 27th October, 1995 and an Addendum thereto
dated 13th November, 1995.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 Subject to Clause 1.7, in this Agreement:
"Account Security Deed" means a deed creating security in respect of the
Earnings Account in the form set out in Appendix C;
"Assigned Value" means, in relation to the Collateral Ship, the amount
in Sterling set out below for each relevant period:
Months from Drawdown Date Xxxxxx
0 - 00 Xxxxx Xxxxxxxx 980,000
24 - 48 Pound Sterling 650,000
48 onwards Pound Sterling 325,000;
"Availability Period" means the period commencing on the
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date of this Agreement and ending on (a) 31st January, 1996 (or such later
date as the Lender may agree with the Borrower) or (b) if earlier, the
date on which the Lender's obligation to make the Loan is canceled or
terminated;
"Budgeted Financial Expenses" means, in relation to each 12 month period
for which the Borrower delivers a budget to the Lender under Clause 10.6,
all budgeted payments by the Borrower during such period arising from any
of its Financial Indebtedness including principal, interest, acceptance
commission and any other continuing, regular or periodic costs and
expenses in the nature of interest (whether payable, accruing or
capitalized) but excluding any balloon repayment instalments of principal;
"Budgeted Operating Profit" means, in relation to each 12 month period for
which the Borrower delivers a budget to the Lender under Clause 10.6, the
budgeted operating revenues of the Borrower during such period less
general and administrative operating expenses (but excluding
depreciation);
"Business Day" means a day on which banks are open in Oslo and London;
"Collateral General Assignment" means, in relation to the Collateral Ship,
a first priority deed of assignment supplemental to the Collateral
Mortgage containing assignments of the Earnings, Insurances and any
requisition compensation of the Collateral Ship in the form set out in
Appendix F;
"Collateral Mortgage" means, in relation to the Collateral Ship, the first
preferred Panamanian ship mortgage on the Collateral Ship in the form set
out in Appendix E;
"Collateral Ship" means the supply vessel "Seapower", documented in the
name of GOMI under the laws and flag of the Republic of Panama with
Patente of Navigation Number 6348-76-F and International Call Sign
HP-2000, of 1,154.00 gross registered tons and 346.00 net registered tons;
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"Deed of Covenant" means, in relation to the Ship, a deed of covenant
collateral to the Mortgage and creating charges over the Ship, her
Insurances, her Earnings and any requisition compensation in the form set
out in Appendix B;
"Drawdown Date" means, in relation to the Loan, the date requested by the
Borrower for the Loan to be advanced, or (as the context requires) the
date on which the Loan is actually advanced;
"Drawdown Notice" means a notice in the form set out in Schedule 1 (or
in any other form which the Lender approves or reasonably requires);
"Earnings" means, in relation to the Ship and the Collateral Ship, all
moneys whatsoever which are now, or later become payable (actually or
contingently) to the Borrower or GOMI (as the case may be) and which arise
out of the use or operation of the Ship or the Collateral Ship (as the case
may be), including (but not limited to) (a) all freight, hire and passage
moneys, compensation payable to the Borrower or GOMI (as the case may be)
in the event of requisition of the Ship or the Collateral Ship (as the case
may be) for hire, remuneration for salvage and towage services, demurrage
and detention moneys and damages for breach (or payments for variation or
termination) of any charterparty or other contract for the employment of
the Ship or the Collateral Ship (as the case may be), (b) all moneys which
are at any time payable under Insurances in respect of loss of earnings,
and (c) if and whenever the Ship or the Collateral Ship (as the case may
be) is employed on terms whereby any moneys falling within (a) or (b) are
pooled or shared with any other person, that proportion of the net receipts
of the relevant pooling or sharing arrangement which is attributable to the
Ship or the Collateral Ship (as the case may be);
"Earnings Account" means an account in the name of the Borrower with the
Lender in London with account number 00000000, or any other account
(with that or another office of the Lender or with a bank or financial
institution other than the Lender) which is designated by the Lender as
the Earnings Account for the purposes of
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this Agreement;
"Event of Default" means any of the events or circumstances described in
Clause 16.1;
"Finance Documents" means (a) this Agreement, the Guarantee, the Deed of
Covenant, the Mortgage, the Collateral Mortgage, the Collateral General
Assignment and the Account Security Deed and (b) any other document
(whether creating a Security Interest or not) which is executed at any
time by the Borrower or any other person as security for, or to establish
any form of subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement or any of the documents
referred to in this definition;
"Financial Indebtedness" means, in relation to a person (the "debtor"),
a liability of the debtor (a) for principal, interest or any other sum
payable in respect of any moneys borrowed or raised by the debtor, (b)
under any loan stock, bond, note or other security issued by the debtor,
(c) under any acceptance credit, guarantee or letter of credit facility
made available to the debtor, (d) under a financial lease, a deferred
purchase consideration arrangement or any other agreement having the
commercial effect of a borrowing or raising of money by the debtor,
(e) under any interest or currency swap or any other kind of derivative
transaction entered into by the debtor, or (f) under a guarantees
indemnity or similar obligation entered into by the debtor in respect of
a liability of another person which would fall within (a) to (e) if the
references to the debtor referred to the other person;
"GNS" means GulfMark North Sea Limited, a company incorporated in England
with company number 2625893, whose registered office is at 00 Xxxxxxxxx
Xxxx, Xxxxxx XX00 0XX, Xxxxxxx;
"GOMI" means Gulf Offshore Marine International Inc., a company
incorporated in Panama, whose registered office is at Xxxxxx Xxxxxxxx,
Xxxxxx Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx;
"Guarantee" means a guarantee in the form set out in
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Appendix D;
"Guarantors" means, together, GNS and GOMI (and, in the singular, means
either of them);
"Insurances" means, in relation to the Ship and the Collateral Ship, (a)
all policies and contracts of insurance, including entries of the Ship or
the Collateral Ship (as the case may be) in any protection and indemnity
or war risks association, which are effected in respect of the Ship or the
Collateral Ship) (as the case may be), her Earnings or otherwise in
relation to her, and (b) all rights and other assets relating to, or
derived from, any of the foregoing, including any rights to a return of a
premium;
"Interest Period" means a period determined in accordance with Clause 5;
"Latest Accounts" means, in relation to the Borrower, the latest audited
annual or unaudited quarterly accounts delivered to the Lender under
Clause 10.6 or, in relation to a Guarantor, under Clause 4.1 of the
Guarantee;
"Lender" means, subject to Clause 24.6, (a) Christiania Bank og
Kreditkasse, acting through its branch at Xxxxxxxxxxxxxxx 00, 0000 Xxxx,
Xxxxxx (or through another branch notified to the Lender under Clause
24.4) and (b) the holder for the time being of a Transfer Certificate;
"Liquid Assets" means:
(i) cash in hand;
(ii) deposits in prime banks or other financial institutions with a
maturity of 6 months or less;
(iii) government issued bills and bonds; and
(iv) marketable securities quoted on a recognized stock exchange,
but excluding any of those assets (other than monies standing to the
credit of the Earnings Account) subject to any Security Interest;
"Loan" means the principal amount for the time being outstanding under
this Agreement;
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"Margin" means one and one-quarter of one per cent. (1 1/4%) per annum;
"MOA" means the Memorandum of Agreement dated 27th October, 1995 (and
the Addendum thereto dated 13th November, 1995) entered into between the
Seller and the Borrower in respect of the sale of the Ship;
"Mortgage" means, in relation to the Ship, the first priority account
current British ship mortgage on the Ship in the form set out in Appendix
A;
"net working capital" means, in relation to the Borrower and each
Guarantor and at any time, its current assets less its current
liabilities as shown in its Latest Accounts;
"Pertinent Jurisdiction", in relation to a company, means (a) England and
Wales, (b) the country under the laws of which the company is incorporated
or formed, (c) a country in which the company's central management and
control is or has recently been exercised, (d) a country in which the
overall net income of the company is subject to corporation tax, income
tax or any similar tax, (e) a country in which assets of the company
(other than securities issued by, or loans to, related companies) having a
substantial value are situated, in which the company maintains a permanent
place of business, or in which a Security Interest created by the company
must or should be registered in order to ensure its validity or priority,
and (f) a country the courts of which have jurisdiction to make a winding
up, administration or similar order in relation to the company or which
would have such jurisdiction if their assistance were requested the courts
of a country referred to in (b) or (c);
"Potential Event of Default" means an event or circumstance which, with
the giving of any notice, the lapse of time, a determination of the Lender
and/or the satisfaction of any other condition, would constitute an Event
of Default;
"Pounds", "Pound Sterling" and "Sterling" means the lawful currency for
the time being of the United Kingdom;
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"Repayment Date" means a date on which a repayment is required to be made
under Clause 7;
"Security Interest" means (a) a mortgage, charge (whether fixed or
floating) or pledge, any maritime or other lien or any other security
interest of any kind, (b) the rights of the plaintiff under an action in
rem in which the vessel concerned has been arrested or a writ has been
issued or similar step taken, and (c) any arrangement entered into by a
person (A) the effect of which is to place another person (B) in a
position which is similar, in economic terms, to the position in which B
would have been had he held a security interest over an asset of A; but
(c) does not apply to a right of set off or combination of accounts
conferred by the standard terms of business of a bank or financial
institution;
"Security Party" means each Guarantor and any other person (except the
Lender) who, as a surety or mortgagor, as a party to any subordination or
priorities arrangement, or in any similar capacity, executes a document
falling within paragraph (b) of the definition of "Finance Documents";
"Security Period" means the period commencing on the date of this
Agreement and ending on the date on which all amounts payable by the
Borrower or any Security Party under the Finance Documents have been paid;
"Security Trustee" means Christiania Bank og Kreditkasse, acting through
its branch at Xxxxxxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx;
"Seller" means SPO MPV Limited, a company incorporated in Bermuda, whose
registered office is in Xxxxxxxx, Bermuda;
"Ship" means the platform supply vessel presently named "Atlantic Warrior"
registered in the name of the Seller under British flag at the Port of
Xxxxxxxx, Bermuda with official number 716310 and to be purchased by the
Borrower and registered in its name under British flag at the Port of
Xxxxxxxx, Bermuda;
"Total Liabilities" means, at any time, the total liabilities of the
Borrower as shown in its Latest
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Accounts;
"Total Loss" and "Total Loss Date" have, in relation to the Ship and the
Collateral Ship, the meaning given in the Deed of Covenant and the
Collateral General Assignment respectively;
"Transfer Certificate" has the meaning given in Clause 24;
"Value Adjusted Equity" means Value Adjusted Total Assets less Total
Liabilities (excluding any Financial Indebtedness which by its terms is
subordinated to the Loan); and
"Value Adjusted Total Assets" means, at any time, the total assets of the
Borrower as shown in its Latest Accounts after deducting (i) goodwill and
(ii) the values of the ships used in the preparation of its Latest
Accounts and substituting, in the case of the Ship and the Collateral
Ship, the most recent market values shown by valuations complying with the
requirements of Clause 12.4 and, in the case of any other ships, the most
recent market values shown by valuations prepared on a similar basis (and
if no such valuations have been made, the Lender shall be entitled to
require that valuations shall be made on such similar basis).
1.2 In this Agreement:
"asset" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or
other payment;
"company" includes any partnership, joint venture and unincorporated
association;
"contingent liability" means a liability which is not certain to arise
and/or the amount of which remains unascertained;
"document" includes a deed; also a letter, fax or telex;
"expense" means any kind of cost, charge or expense (including all legal
costs, charges and expenses) and any
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applicable value added or other tax;
"law" includes any form of delegated legislation, any order or decree,
any treaty or international convention and any regulation, directive or
decision of the Council of the European Union or the European Commission;
"legal or administrative action" means any legal proceeding or arbitration
and any administrative or regulatory action or investigation;
"liability" includes every kind of debt or liability (present or future,
certain or contingent), whether incurred as principal or surety or
otherwise;
"months" shall be construed in accordance with Clause 1.3;
"official consent" and "official requirement" mean respectively:
(a) any consent, authorization or clearance; and
(b) any requirement, directive, request, guideline or
notice (whether general or specific and whether or not
having the force of law);
of or issued by any fiscal, monetary or banking authority or any other
governmental, official or public authority of any kind, including the
Council of the European Union or
the European Commission; and "official requirement" also includes a
resolution of the United Nations or of its Security Council;
"parent company" has the meaning given in Clause 1.4;
"person" includes any company; any state, political sub-
division of a state and local or municipal authority; and any
international organization;
"subsidiary" has the meaning given in Clause 1.4; and
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"tax" includes any present or future tax, duty, impost, levy or charge of
any kind which is imposed by any state, any political sub-division of a
state or any local or municipal authority (including any such imposed in
connection with exchange controls), and any connected penalty, interest or
fine.
1.3 A period of one or more "months" ends on the day in the relevant calendar
month numerically corresponding to the day of the calendar month on which the
period started ("the numerically corresponding day"), but:
(a) on the Business Day following the numerically corresponding
day if the numerically corresponding day is not a Business Day
or, if there is no later Business Day in the same calendar month,
on the Business Day preceding the numerically corresponding day; or
(b) on the last Business Day in the relevant calendar month, if the
period started on the last Business Day in a calendar month or if
the last calendar month of the period has no numerically
corresponding day;
and "month" and "monthly" shall be construed accordingly.
1.4 A company (S) is a subsidiary of another company (P) if:
(a) a majority of the issued shares in S (or a majority of the issued
shares in S which carry unlimited rights to capital and income
distributions) are directly owned by P or are indirectly
attributable to P; or
(b) P has direct or indirect control over a majority of the voting
rights attaching to the issued shares of S, or
(c) P has the direct or indirect power to appoint or remove a
majority of the directors of S; or
(d) P otherwise has the direct or indirect power to ensure that the
affairs of S are conducted in accordance with the wishes of P;
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and any company of which S is a subsidiary is a parent company of S.
1.5 In this Agreement:
(a) references to, or to a provision of, a Finance Document or any
other document are references to it as amended or supplemented,
whether before the date of this Agreement or otherwise; and
(b) references to, or to a provision of, any law include any
amendment, extension, re-enactment or replacement, whether made
before the date of this Agreement or otherwise.
1.6 Clauses 1.1 to 1.5 apply unless the contrary intention appears.
1.7 References in Clause 1.1 to a document being in the form of a
particular Appendix include references to that form with any modifications to
that form which the Lender approves or reasonably requires.
1.8 The clause headings shall not affect the interpretation of this
Agreement.
2 FACILITY
2.1 Subject to the other provisions of this Agreement, the Lender shall
make a loan facility not exceeding; Pound Sterling 4,890,000 available to the
Borrower.
2.2 The Borrower undertakes with the Lender to use the Loan only for the
purposes stated in the preamble to this Agreement.
3 DRAWDOWN
3.1 The Borrower may request the Loan to be advanced by ensuring that the
Lender receives a completed Drawdown Notice not later than 11.00 a.m. (Oslo
time) 3 Business Days prior to the intended Drawdown Date.
3.2 The Drawdown Date has to be a Business Day during the Availability
Period.
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3.3 A Drawdown Notice must be signed by a director of the Borrower; and,
once served, a Drawdown Notice cannot be revoked without the prior consent of
the Lender.
3.4 Subject to the provisions of this Agreement, the Lender shall on the
Drawdown Date make available to the Borrower the proceeds of the Loan as the
Borrower shall direct in the Drawdown Notice.
4 INTEREST
4.1 Subject to the Provisions of this Agreement, interest on the Loan in
respect of an Interest Period shall be paid by the Borrower on the last day of
that Interest Period.
4.2 Subject to the provisions of this Agreement, the rate of interest on
the Loan in respect of an Interest Period shall be the aggregate of the Margin
and LIBOR for that Interest Period.
4.3 LIBOR for in Interest Period is the rate per annum determined by the
Lender to be the rate of the offered quotation for deposits in Sterling which
appears on the Xxxxxx Monitor Money
Rates Service page designated ISDA (or such other page on that service as may
replace that page) at or about 11.00 a.m. (London time) on the second Business
Day prior to the commencement of that Interest Period for a period equal to
that Interest Period.
4.4 However, in the case of an Interest Period longer than 6 months,
accrued interest shall be paid every 6 months during the Interest Period and on
the last day of the Interest Period.
5 INTEREST PERIODS
5.1 The first Interest Period shall commence on the Drawdown Date and each
subsequent Interest Period shall commence on the expiry of the preceding
Interest Period.
5.2 Subject to Clauses 5.3 and 5.4, each Interest Period shall be:
(a) 1, 3 or 6 months as notified by the Borrower to the Lender not
later than 11.00 a.m. (London time) 3 Business Days before the
commencement of
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the Interest Period; or
(b) 3 months, if the Borrower fails to notify the Lender by the
time specified in paragraph (a) above; or
(c) such other period as the Lender may agree with the Borrower.
5.3 However,
(a) in respect of an, amount due to be repaid under Clause 7 on a
particular Repayment Date, an Interest Period shall end on that
Repayment Date; and
(b) the Borrower shall not select Interest Periods of 1 month more
often than 5 times in each period of 12 months from the first
Drawdown Date.
5.4 If, after the Borrower has selected an Interest Period longer than 6
months, the Lender notifies the Borrower by 11.00 a.m. (London time) on the
second Business Day of the Interest Period that it is not satisfied that
deposits in Sterling for a period equal to the Interest Period will be
available to it in the London Interbank Market when the Interest Period
commences, the Interest Period shall be of 6 months.
6 DEFAULT INTEREST
6.1 The Borrower shall pay interest in accordance with the following
provisions on any amount payable by the Borrower under any Finance Document
which the Lender or the Security Trustee does not receive on or before the
relevant date, that is:
(a) the date on which the Finance Documents provide that such amount
is due for payment; or
(b) if a Finance Document provides that such amount is payable on
demand, the date on which the demand is served; or
(c) if such amount has become immediately due and payable under
Clause 16.4, the date on which it became immediately due and
payable.
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6.2 Interest shall accrue on an overdue amount from (and including) the
relevant date until the date of actual payment (as well after as before
judgment) at the rate per annum determined by the Lender to be 2 percent.
above:
(a) in the case of an overdue amount of principal, the higher of the
rates set out at paragraphs (a) and (b) of Clause 6.3; or
(b) in the case of any other overdue amount, the rate set out at
paragraph (b) of Clause 6.3.
6.3 Those rates are:
(a) the rate applicable to the overdue principal amount immediately
prior to the relevant date (but only for any unexpired part of
any then current Interest Period);
(b) the Margin plus, in respect of successive periods of any duration
(including at call) up to three months which the Lender may
select from time to time:
(i) LIBOR, as determined by the Lender in accordance with
Clause 4.3; or
(ii) if the Lender determines that Sterling deposits for
any such period are not being made available to it by
leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time
determined by the Lender by reference to the cost of funds
to it from such other sources as the Lender may from time
to time determine.
6.4 The Lender shall promptly notify the Borrower of each interest rate
determined by it under Clause 6.3 and of each period selected by it for the
purposes of paragraph (b) of that Clause; but this shall not be taken to imply
that the Borrower is liable to pay such interest only with effect from the date
of the Lender's notification.
6.5 Subject to the other provisions of this Agreement, any
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interest due under this Clause shall be paid on the last day of the period by
reference to which it was determined.
6.6 Any such interest which is not paid at the end of the period by reference
to which it was determined shall thereupon be compounded.
7 REPAYMENT AND PREPAYMENT
7.1 The Borrower shall repay the Loan by 14 consecutive semiannual
instalments, the first 13 of Three hundred and fifty thousand Pounds (Pound
Sterling 350,000) each and the final instalment of Three hundred and forty
thousand Pounds (Pound Sterling 340,000).
7.2 The first instalment shall be repaid on the date falling 6 months after
the Drawdown Date and the last instalment on the date falling 84 months after
the Drawdown Date.
7.3 On the final Repayment Date, the Borrower shall additionally pay to the
Lender all other sums then accrued or owing under any Finance Document.
7.4 Subject to the following conditions, the Borrower may prepay the whole
or any part of the Loan on the last day of an Interest Period.
7.5 Those conditions are:
(a) that a partial prepayment shall be Pound Sterling
350,000 or a multiple thereof;
(b) that the Lender has received from the Borrower at least 20 days
prior written notice specifying the amount to be prepaid and the
date on which the prepayment is to be made;
(c) that the Borrower has provided evidence satisfactory to the
Lender that any official consent required by the Borrower or any
Security Party in connection with the prepayment has been obtained
and remains in force, and that any official requirement relevant
to this Agreement which affects the Borrower or any Security Party
has been complied with.
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7.6 A prepayment notice may not be withdrawn or amended without the consent
of the Lender.
7.7 If the Collateral Ship is sold or becomes a Total Loss, the Borrower
shall prepay a portion of the Loan equal to the then prevailing Assigned Value
of the Collateral Ship. Such prepayment shall be made simultaneously with the
sale of the Collateral Ship (and as a condition of the release of the
Collateral Mortgage) or within 120 days after the Total Loss Date.
7.8 If the Ship is sold or becomes a Total Loss, the Borrower shall prepay
the whole of the Loan. Such prepayment shall be made simultaneously with the
sale of the Ship (and as a condition of the release of the Mortgage) or within
120 days after the Total Loss Date.
7.9 A prepayment shall be made together with accrued interest (and any
other amount payable under Clause 18 below or otherwise) in respect of the
amount prepaid and, if the prepayment is not made on the last day of an
Interest Period together with any sums payable under Clause 18.1(b) but without
premium or penalty.
7.10 Each partial prepayment shall be applied against the repayment
instalments specified in Clause 7.1 in inverse order of maturity.
7.11 No amount prepaid may be reborrowed.
8 CONDITIONS PRECEDENT
8.1 The Lender's obligation to advance the Loan is subject to the following
conditions precedent:
(a) that the Lender receives the documents described in Schedule 2
below in form and substance satisfactory to it and its lawyers on
or before the service of a Drawdown Notice for the Loan or, in
the case of paragraph 9, on or before the Drawdown Date;
(b) that, on or before the Drawdown Date, the Lender receives the
arrangement fee referred to in Clause 17.1;
(c) that on or before the Drawdown Date, the Lender
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receives all accrued commitment fee payable pursuant to Clause
17.1;
(d) that both at the date of the Drawdown Notice and at the Drawdown
Date:
(i) no Event of Default or Potential Event of Default has
occurred and is continuing or would result from the
advance of the Loan;
(ii) the representations and warranties in Clause 9.1 and
those of the Borrower or any Security Party which are
set out in the other Finance Documents would be true
and not misleading if repeated on each of those dates
with reference to the circumstances then existing;
(iii) none of the circumstances contemplated by Clause 22
has occurred and is continuing; and
(e) that, if the ratio set out in Clause 12.1 were applied immediately
following the advance of the Loan, the Borrower would not be
obliged to provide additional security or prepay part of the
Loan under that Clause.
8.2 If the Lender, at its discretion, permits the Loan to be advanced
before certain of the conditions referred to in Clause 8.1 are satisfied, the
Borrower shall ensure that those conditions are satisfied within 5 Business
days after the Drawdown Date (or such longer period as the Lender may specify).
9 REPRESENTATIONS AND WARRANTIES
9.1 The Borrower represents and warrants to the Lender and the Security
Trustee as follows.
9.2 The Borrower is duly incorporated and validly existing under the laws
of England.
9.3 The Borrower has an authorized share capital of Pound Sterling 655,865
divided into 655,865 registered shares of Pound Sterling 1 each, of which
655,767 shares have been issued fully
20
paid, and the legal title (other than the legal title to 1 share held by GOMI)
and beneficial ownership of all those shares is held, free of any Security
Interest (except as disclosed in writing to the Lender) or other claim, by GNS.
9.4 The Borrower has the corporate capacity, and has taken all corporate
action and obtained all official consents necessary for it:
(a) to execute the MOA, to purchase and pay for the Ship under the
MOA and to register the Ship in its name under British flag;
(b) to execute the Finance Documents to which the Borrower is a
party; and
(c) to borrow under this Agreement and to make all the payments
contemplated by, and to comply with, those Finance Documents.
9.5 All the official consents referred to in Clause 9.4 remain in force and
nothing has occurred which makes any of them liable to revocation.
9.6 The Finance Documents to which the Borrower is a party, do now or, as
the case may be, will, upon execution and delivery (and, where applicable,
registration as provided for in the Finance Documents):
(a) constitute the Borrower's legal, valid and binding obligations
enforceable against the Borrower in accordance with their
respective terms; and
(b) create legal, valid and binding Security Interests enforceable in
accordance with their respective terms;
subject to any relevant insolvency laws affecting creditors' rights generally.
9.7 The execution by the Borrower of each Finance Document, and the
borrowing by the Borrower of the Loan, and its compliance with each Finance
Document will not involve or lead to a contravention of:
21
(a) any law or official requirement; or
(b) the constitutional documents of the Borrower; or
(c) any contractual or other obligation or restriction which is
binding on the Borrower or any of its assets.
9.8 All payments which the Borrower is liable to make under the Finance
Documents may be made without deduction or withholding for or on account of any
tax payable under any law of England.
9.9 No Event of Default or Potential Event of Default has occurred and is
continuing.
9.10 All information which has been provided in writing by or on behalf of
the Borrower or any Security Party to the Lender in connection with any Finance
Document satisfied the requirements of Clause 10.5; all audited and unaudited
accounts which have been so provided satisfied the requirements of Clause 10.7;
and there his been no material adverse change in the financial position or
state of affairs of the Borrower from that disclosed in the latest of those
accounts.
9.11 No legal or administrative action involving the Borrower has been
commenced or taken or, to the Borrower's knowledge, is likely to be commenced
or taken which, in either case, would be likely to have a material adverse
effect on the Borrower's financial position or profitability.
9.12 The copy of the MOA delivered to the Lender before the date of this
Agreement is a true and complete copy; the MOA constitutes valid, binding and
enforceable obligations of the Seller and the Borrower respectively in
accordance with its terms; and no amendments or additions to the MOA have been
agreed nor has the Borrower or the Seller waived any of their respective rights
under the MOA.
9.13 There is no agreement or understanding to allow or pay any rebate,
premium, commission or other payment (howsoever described) to the Borrower or a
third party in connection with the purchase by the Borrower of the Ship, other
than as disclosed to the Lender in writing on or prior to the date of this
22
Agreement.
9.14 At the date of this Agreement, the Borrower is in compliance with
Clauses 10.2, 10.4, 10.9 and 10.13.
9.15 The Borrower has paid all taxes applicable to, or imposed on or in
relation to the Borrower, its business or the Ship.
10 GENERAL UNDERTAKINGS
10.1 The Borrower undertakes with the Lender and the Security Trustee to
comply with the following provisions of this Clause 10 at all times during
the Security Period, except as the Lender may otherwise permit.
10.2 The Borrower will hold the legal title to, and own the entire
beneficial interest in the Ship, her Insurances and her Earnings, free from all
Security Interests and other interests and rights of every kind, except for
those created by the Finance Documents and the effect of assignments contained
in the Finance Documents.
10.3 The Borrower will not transfer, lease or otherwise dispose of:
(a) all or a substantial part of its assets, whether by one
transaction or a number of transactions, whether related or not;
or
(b) any debt payable to it or any other right (present, future or
contingent right) to receive a payment, including any right to
damages or compensation.
10.4 The Borrower will not incur any liabilities or obligations except:-
(a) those existing at the date of this Agreement;
(b) those arising under the MOA and the Finance Documents;
(c) those incurred in the ordinary course of managing, operating and
chartering any vessel
23
owned, managed or chartered by the Borrower;
(d) those incurred in ordering and acquiring one ME High Sided Design
vessel; or
(e) in addition to those covered by paragraphs (c) to (d) above,
those not exceeding Pound Sterling 500,000 in aggregate at any
time.
10.5 All financial and other information which is provided in writing by or
on behalf of the Borrower under or in connection with any Finance Document will
be true and not misleading and will not omit any material fact or
consideration.
10.6 The Borrower will send to the Lender:
(a) as soon as possible, but in no event later than 150 days after
the end of each financial year of the Borrower, the audited
accounts of the Borrower;
(b) as soon as possible, but in no event later than 45 days after
the end of each quarter in each financial year of the Borrower:
(i) unaudited accounts of the Borrower prepared in accordance
with accounting principles generally accepted in England,
consistently applied and certified as to their
correctness by a director of the Borrower; and
(ii) management accounts in a format approved by the Lender
which show the results of the operation of the Ship
during the preceding financial quarter and which are
certified as to their correctness by a director of the
Borrower;
(iii) a budget for the next 12 month period in a format
approved by the Lender which shows the Budgeted
Financial Expenses and Budgeting Operating Profit of the
Borrower for such period (and that budget will be subject
to the approval of the
24
Lender for the purposes of Clause 11.4(d)); and
(iv) a compliance certificate in the form set out in Schedule
4 signed by a director of the Borrower.
10.7 All accounts (audited and unaudited) delivered under Clause 10.6 will:
(a) be prepared in accordance with all applicable laws and accounting
principles generally accepted in England consistently applied;
(b) give a true and fair view of the state of affairs of the Borrower
at the date of those accounts and of its profit for the period
to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of the
Borrower.
10.8 The Borrower will send to the Lender, at the same time as they are
despatched, copies of all communications which are despatched to the Borrower's
shareholders or creditors or any class of them (other than communications to a
specific creditor under the terms of any agreement with that creditor).
10.9 The Borrower will maintain in force and promptly obtain or renew, and
will promptly send certified copies to the Lender of, all official consents
required:
(a) for the Borrower to perform its obligations under any Finance
Document;
(b) for the validity or enforceability of any Finance Document;
(c) for the Borrower to continue to own and operate the Ship;
and the Borrower will comply with the terms of all such official consents.
10.10 The Borrower will promptly register, file, record or
25
enrol any Finance Document with any court or authority in England, Bermuda or
Panama, pay any stamp, registration or similar tax in England, Bermuda or
Panama in respect of any Finance Document, give any notice or take any other
step which may be or become necessary or desirable for any Finance Document to
be valid, enforceable or admissible in evidence or to ensure or protect the
priority of any Security Interest which it creates.
10.11 The Borrower will provide the Lender with details of any legal or
administrative action involving the Borrower, any Security Party, the Ship or
the Collateral Ship, their respective Earnings or Insurances as soon as such
action is instituted or it becomes apparent to the Borrower that it is likely
to be instituted, unless it is clear that the legal or administrative action
cannot be considered material in the context of any Finance Document.
10.12 The Borrower will not agree to any material amendment or supplement to,
or waive or fail to enforce, the MOA or any of its provisions.
10.13 The Borrower will maintain its registered office, and keep its
corporate documents and records, at the address stated at the commencement of
this Agreement.
10.14 The Borrower will, within two Business Days after service by the Lender
of a written request, serve on the Lender a notice which is signed by two
directors of the Borrower and which:
(a) states that no Event of Default or Potential Event of Default
has occurred; or
(b) states that no Event of Default or Potential Event of Default
has occurred, except for a specified event or matter, of which
all material details are given.
10.15 The Borrower will notify the Lender as soon as the Borrower becomes
aware of:
(a) the occurrence of an Event of Default or a Potential Event of
Default; or
(b) any matter which indicates that an Event of
26
Default or a Potential Event of Default may have occurred;
and will thereafter keep the Lender fully up-to-date with all
developments.
10.16 The Borrower will, as soon as practicable after receiving the request,
provide the Lender with any additional financial or other information relating:
(a) to the Borrower, the Ship, the Collateral Ship, their respective
Insurances or Earnings; or
(b) to any other matter relevant to, or to any provision of, a
Finance Document;
which may reasonably be requested by the Lender at any
time.
11 CORPORATE UNDERTAKINGS
11.1 The Borrower also undertakes with the Lender and the Security Trustee
to comply with the following provisions of this Clause 11 at all times during
the Security Period except as the Lender may otherwise permit (such permission
not to be unreasonably withheld in relation to Clause 11.3(g)).
11.2 The Borrower will maintain its separate corporate existence under the
laws of England.
11.3 The Borrower will not:
(a) make any material change in the nature of its business as
conducted at the date of this Agreement; or
(b) repay any principal of or interest on a loan owing to any such
person or company as is referred to in Clause 11.3(c) below or
pay any dividend or make any other form of distribution or
effect any form of redemption, purchase or return of share
capital unless, after doing so, the aggregate of the net working
capital of the Borrower and of each Guarantor exceeds Pound
Sterling 4,000,000; or
27
(c) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in
the Borrower's share or loan capital; or
(ii) any company in or with which such a person is directly
or indirectly interested or connected;
or enter into any transaction with or involving such a person or
company on terms which are, in any respect, less favorable to the
Borrower than those which it could obtain in a bargain made at arms'
length;
(d) assign or otherwise dispose of any book debt;
(e) issue, allot or grant any person a right to any shares in its
capital or repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than government
issued bills and bonds, certificates of deposit issued by
prime banks and marketable securities quoted on a recognized
stock exchange, or enter into any transaction in a derivative
(other than an interest rate or currency hedge entered into in
the ordinary course of business); or
(g) enter into any form of amalgamation, merger or de-merger or any
form of reconstruction or reorganization.
11.4 The Borrower will:
(a) at all times retain Liquid Assets of at least Pound Sterling
500,000;
(b) ensure that the Borrower's Value Adjusted Equity is at least
Pound Sterling 12,000,000,
(c) ensure that the Borrower's Value Adjusted Equity is at least
40 per cent of the Borrower's Value
28
Adjusted Total Assets;
(d) ensure that, at the end of each quarter of each financial year
of the Borrower, the ratio of Budgeted Operating Profit of the
Borrower to Budgeted Financial Expenses of the Borrower for
the next 12 months is at least 1:1.
12 SECURITY COVER
12.1 The Borrower undertakes with the Lender and the Security Trustee that,
if the Lender notifies the Borrower that:
(a) the aggregate of the market values (determined as provided
below) of the Ship and the Collateral Ship; plus
(b) the net realizable value of any additional security previously
provided under this Clause 12;
is below 140 per cent. of the Loan, the Borrower will, within one month
after the date on which the Lender's notice is served, either:
(i) provide, or ensure that a third party provides,
additional security which, in the reasonable opinion
of the Lender, has a net realizable value at least
equal to the shortfall and which, if it consists
of or includes a Security Interest, covers such asset
or assets and is documented in such terms as the Lender
may reasonably approve or require; or
(ii) prepay in accordance with Clause 7 such part (at least)
of the Loan as will eliminate the shortfall.
12.2 In Clause 12.1 "security" means a Security Interest over an asset or
assets (whether securing the Borrower's liabilities under the Finance Documents
or a guarantee in respect of those liabilities), or a guarantee, letter of
credit or other security in respect of the Borrower's liabilities under the
Finance Documents.
29
12.3 The Borrower shall not be deemed to have complied with Clause 12.1 (i)
above until the Lender has received in connection with the additional security
certified copies of documents of the kinds referred to in paragraphs 3, 4 and 5
of Schedule 2 below and such legal opinions in terms reasonably acceptable to
the Lender from such lawyers as it may select.
12.4 The market value of the Ship and of the Collateral Ship at any date is
the arithmetic mean of the values shown by valuations prepared:
(a) as at a date not more than 14 days previously;
(b) by 2 independent sale and purchase shipbrokers which the
Borrower has appointed and the Lender has approved or (if the
Borrower has not appointed 2 such shipbrokers promptly after a
request from the Lender to do so) which the Lender has
appointed for the purpose;
(c) with or without physical inspection of the Ship (as the Lender
may require);
(d) on the basis of a sale for prompt delivery for cash on normal
arm's length commercial terms as between a willing seller and
a willing buyer, free of any existing charter or other contract
of employment;
(e) after deducting the estimated amount of the usual and
reasonable expenses which would be incurred in connection with
the sale.
12.5 The net realizable value of any additional security which is provided
under Clause 12.1 and which consists of a Security Interest over a vessel shall
be that shown by a valuation complying with the requirements of Clause 12.4.
12.6 Any valuation under Clause 12.1(i), 12.4 or 12.5 shall be binding and
conclusive as regards the Borrower, as shall be any valuation which the Lender
makes of a security which does not consist of or include a Security Interest.
12.7 The Borrower shall promptly provide the Lender and any
30
shipbroker or expert acting under Clause 12.4 or 12.5 with any information
which the Lender or the shipbroker or expert may request for the purposes of
the valuation; and, if the Borrower fails to provide the information by the
date specified in the request, the valuation may be made on any basis and
assumptions which the shipbroker or the Lender (or the expert appointed by it)
considers prudent.
12.8 The Borrower shall, on demand, pay the Lender the amount of the fees
and expenses of any shipbroker or expert instructed by the Lender under this
Clause (but not more often than twice in any calendar year) and all legal and
other expenses incurred by the Lender in connection with any matter arising out
of this Clause.
13 PAYMENTS AND CALCULATIONS
13.1 All payments to be made by the Borrower to the Lender or the Security
Trustee under a Finance Document shall be made to the Lender (or to the
Security Trustee, in the case of an amount payable to it):
(i) by not later than 11.00 a.m. (London time) on the due
date;
(ii) in same day Sterling funds settled in such manner as
the Lender shall specify as being customary at the
time for the settlement of international transactions
of the type contemplated by this Agreement);
(iii) in the case of an amount payable to the Lender, to
such account of the Lender with such bank as the
Lender may from time to time notify to the Borrower;
and
(iv) in the case of an amount payable to the Security
Trustee, to such account of the Security Trustee with
such bank as the Security Trustee may from time to time
notify to the Borrower.
13.2 If any payment by the Borrower under a Finance Document would otherwise
fall due on a day which is not a Business Day:
31
(a) the due date shall be extended to the next succeeding Business
Day; or
(b) if the next succeeding Business Day falls in the next calendar
month, the due date shall be brought forward to the immediately
preceding Business Day;
and interest shall be payable during any extension under paragraph (a)
at the rate payable on the original due date.
13.3 All interest and commitment fee and any other payments under any
Finance Document which are of an annual or periodic nature shall accrue from
day to day and shall be calculated on the basis of the actual number of days
elapsed and a 365 day year.
13.4 The Lender shall maintain an account showing the amounts advanced by
the Lender and all other sums owing to the Lender from the Borrower and each
Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.
13.5 If the account maintained under Clauses 13.4 shows an amount to be
owing by the Borrower or a Security Party to the Lender, that account shall be
prima facie evidence that amount is owing to the Lender.
14 APPLICATION OF RECEIPTS
14.1 Except as any Finance Document may otherwise provide, any sums which
are received or recovered by the Lender or the Security Trustee under or by
virtue of any Finance Document shall be applied:-
FIRST: in or towards satisfaction of any amounts then due
and payable under the Finance Documents (or any of them)
in such order of application and/or such proportions as
the Lender may specify by notice to the Borrower, the
Security Parties and the Security Trustee;
SECONDLY: in retention of an amount equal to any amount
32
not then due and payable under any Finance Document but
which the Lender, by notice to the Borrower, the Security
Parties and the Security Trustee, states in its opinion
will or may become due and payable in the future and,
upon those amounts becoming due and payable, in or
towards satisfaction of them in accordance with the
foregoing provisions of this Clause; and
THIRDLY: any surplus shall be paid to the Borrower or to
any other person appearing to be entitled to it.
14.2 The Lender may, by notice to the Borrower, the Security Parties and the
Security Trustee, provide for a different manner of application from that set
out in Clause 14.1 either as regards a specified sum or sums or as regards sums
in a specified category or categories.
14.3 The Lender may give notices under Clause 14.2 from time to time; and
such a notice may be stated to apply not only to sums which may be received or
recovered in the future, but also to any sum which has been received or
recovered on or after the third Business Day before the date on which the
notice is served.
14.4 This Clause 14 and any notice which the Lender gives under Clause 14.2
shall override any right of appropriation possessed, and any appropriation
made, by the Borrower or any Security Party.
15 APPLICATION OF EARNINGS
15.1 The Borrower undertakes with the Lender to ensure that, throughout the
Security Period (and subject only to the provisions of the Deed of Covenant),
all the Earnings of the Ship are paid to the Earnings Account.
15.2 Until such time after an Event of Default occurs as the Lender directs
to the contrary, sums standing to the credit of the Earnings Account shall be
at the disposal of the Borrower for any purpose not inconsistent with the terms
of the Finance Documents.
15.3 The Lender shall be entitled (but not obliged) from time to time to
debit the Earnings Account without prior notice in order to discharge any
amount due and payable to it under Clause 17 or 18 or payment of which it or
the Security Trustee has
33
become entitled to demand under Clause 17 or 18.
16 EVENTS OF DEFAULT
16.1 An Event of Default occurs if:
(a) the Borrower or any Security Party fails to pay when due or
(if so payable) on demand any sum payable under a Finance
Document or under any document relating to a Finance Document;
or
(b) any breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3, 11.4
or 12.1; or
(c) any breach by the Borrower or any Security Party occurs of any
provision of a Finance Document (other than a breach covered by
paragraph (a) or (b) above) unless the breach is capable of
remedy and within 14 Business Days (or such other remedy
period as may be specified by the relevant provision of the
Finance Documents) after the Lender serves on the Borrower a
notice requiring the breach to be remedied, the Lender notifies
the Borrower in writing that the breach has been remedied to
its satisfaction; or
(d) any representation, warranty or statement made by, or by an
officer of, the Borrower or a Security Party in a Finance
Document or in the Drawdown, Notice or any other notice or
document relating to a Finance Document is untrue or
misleading when it is made; or
(e) any of the following occurs in relation to any Financial
Indebtedness of, or aggregating, Pound Sterling 50,000 or
more or the equivalent in another currency of a Relevant
Person (as defined in Clause 16.7) unless such occurrence is
being contested by bona fide proceedings diligently pursued:
(i) any such Financial Indebtedness is not paid when due
or, if so payable, on demand; or
34
(ii) any such Financial Indebtedness becomes due and payable
or capable of being declared due and payable prior to
its stated maturity date as a consequence of any event
of default; or
(iii) a lease, hire purchase agreement or charter creating
any such Financial Indebtedness is terminated by the
lessor or owner or becomes capable of being
terminated as a consequence of any termination event; or
(iv) any overdraft, loan, note issuance, acceptance credit,
letter of credit, guarantee, foreign exchange or other
facility, or any swap or other derivative contract or
transaction, relating to any such Financial
Indebtedness ceases to be available or becomes capable
of being terminated as a result of any event of
default, or cash cover is required, or becomes capable
of being required, in respect of such a facility as a
result of any event of default; or
(v) any Security Interest securing any such Financial
Indebtedness becomes enforceable; or
(f) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the reasonable opinion
of the Lender, unable to pay its debts as they fall
due; or
(ii) any assets of a Relevant Person are subject of any form
of execution, attachment, arrest, sequestration or
distress in respect of a sum of, or sums aggregating,
Pound Sterling 50,000 or more or the equivalent in
another currency unless such event is being contested
by bona fide proceedings
35
diligently pursued; or
(iii) any administrative or other receiver is appointed over
any asset of a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of
bankruptcy or any formal statement to the effect that
it is insolvent or likely to become insolvent, or a
winding up or administration order is made in relation
to a Relevant Person, or the members or directors of a
Relevant Person pass a resolution to the effect that it
should be wound up, placed in administration or cease
to carry on business, save that this paragraph does
not apply to a fully solvent winding up a Relevant
Person other than the Borrower or a Guarantor which is,
or is to be, effected for the purposes of an
amalgamation or reconstruction previously approved by
the Lender and effected not later than 3 months after
the commencement of the winding up; or
(v) a petition is presented in any Pertinent Jurisdiction
for the winding up or administration, or the
appointment of a provisional liquidator, of a Relevant
Person unless the petition is being contested in good
faith and on substantial grounds and is dismissed or
withdrawn within 30 days of the presentation of the
petition; or
(vi) a Relevant Person petitions a court, or presents any
proposal for, any form of judicial or non-judicial
suspension or deferral of payments, reorganization of
its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value) of
its creditors or of any class of them or any such
suspension or deferral of payments,
36
reorganization or arrangement is effected by court
order, contract or otherwise; or
(vii) any meeting of the members or directors of a Relevant
Person is summoned for the purpose of considering a
resolution or proposal to authorize or take any action
of a type described in paragraphs (iii), (iv), (v) or
(vi) above; or
(viii) in a Pertinent Jurisdiction other than England, any
event occurs or any procedure is commenced which, in the
opinion of the Lender, is similar to any of the
foregoing; or
(g) the Borrower ceases or suspends carrying on its business or a
part of its business which, in the opinion of the Lender, is
material in the context of this Agreement; or
(h) it becomes unlawful in any Pertinent Jurisdiction or impossible
(i) for the Borrower or any Security Party to discharge any
liability under a Finance Document or to comply with any other
obligation which the Lender considers material under a Finance
Document or (ii) for the Lender or the Security Trustee to
exercise or enforce any right under, or to enforce any Security
Interest created by, a Finance Document; or
(i) any official consent necessary to enable the Borrower or GOMI
(as the case may be) to own, operate or charter the Ship or the
Collateral Ship or to enable the Borrower or any Security
Party to comply with any provision which the Lender considers
material of a Finance Document or the MOA is not granted,
expires without being renewed, is revoked or becomes liable to
revocation or any condition of such a consent is not fulfilled;
or
(j) it appears to the Lender that, without its prior consent, a
material change has occurred or probably has occurred in the
ultimate beneficial ownership of any of the shares in the
Borrower or
37
either Guarantor or in the ultimate control of the voting
rights attaching to any of those shares; or
(k) any provision which the Lender considers material of a Finance
Document proves to have been or becomes invalid or
unenforceable, or a Security Interest created by a Finance
Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have ranked
after, or loses its priority to, another Security Interest or
any other third party claim or interest; or
(1) the security constituted by a Finance Document is in any way
imperilled or in jeopardy; or
(m) there occurs any material (in the opinion of the Lender)
adverse change in the financial position of the Borrower or
either Guarantor in the light of which the Lender considers
that there is a significant risk that the Borrower or either
Guarantor is, or will later become, unable to discharge its
liabilities under the Finance Documents to which it is a party
as they fall due.
16.2 On, or at any time after, the occurrence of an Event of Default:
(a) the Lender may;
(i) serve on the Borrower a notice stating that all
obligations of the Lender to the Borrower under this
Agreement are terminated; and/or
(ii) serve on the Borrower a notice stating that the Loan,
all accrued interest and all other amounts accrued or
owing under this Agreement are immediately due and
payable; and/or
(iii) take any other action which, as a result of the Event
of Default or any notice
38
served under paragraph (i) or (ii) above,
the Lender is entitled to take under any
Finance Document or any applicable law;
and/or
(b) the Security Trustee may take any action which, as a result of
the Event of Default or any notice served under paragraph (a)
(i) or (ii) above, the Security Trustee and/or the Lender is
entitled to take under any Finance Document or any applicable
law.
16.3 On the service of a notice under paragraph (a)(i) of Clause 16.2, all
the obligations of the Lender to the Borrower under this Agreement shall
terminate.
16.4 On the service of a notice under paragraph (a)(ii) of Clause 16.2, the
Loan, all accrued interest and all other amounts accrued or owing from the
Borrower or any Security Party under this Agreement and every other Finance
Document shall become immediately due and payable.
16.5 The Lender may serve notices under paragraphs (a) (i) and (ii) of
Clause 16.2 simultaneously or on different dates and it may take any action
referred to in that Clause if no such notice is served or simultaneously with
or at any time after the service of both or either of such notices.
16.6 Neither the Lender nor the Security Trustee nor any receiver or manager
appointed by the Lender or the Security Trustee, shall have any liability to
the Borrower or a Security Party:
(a) for any loss caused by an exercise of rights under, or
enforcement of a Security Interest created by , a Finance
Document or by any failure or delay to exercise such a right or
to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or
principal amount which might have been produced by or realized
from any asset comprised in such a Security Interest or for any
reduction (however caused) in the value of such an asset;
39
except that this does not exempt the Lender, the Security Trustee or a
receiver or manager from liability for losses shown to have been
caused mainly and directly by the gross and culpable negligence or the
dishonesty of the Lender's or the Security Trustee's own officers and
employees or (as the case may be) such receiver's or manager's own
partners or employees.
16.7 In this Clause 16 "a Relevant Person" means the Borrower, each Security
Party and any company which is a subsidiary or a fellow-subsidiary of the
Borrower or a Security Party or of which the Borrower or a Security Party is a
subsidiary; but excluding any company which is dormant and the value of whose
gross assets is Pound Sterling 50,000 or less.
16.8 In Clause 16.1(e) references to an event of default or a termination
event include any event, howsoever described, which is similar to an event of
default in a facility agreement or a termination event in a finance lease; and
in Clause 16.1(f) "petition" includes an application.
17 FEES AND EXPENSES
17.1 The Borrower shall pay to the Lender:
(a) on the earlier of the first Drawdown Date and the date falling
one month after the date of this Agreement, an arrangement fee
of Pound Sterling 18,338; and
(b) on the earlier of the Drawdown Date and 31st January, 1996, for
the period from (and including) 6th December, 1995 to the
earlier of (i) the Drawdown Date and (ii) 31st January, 1996
a commitment fee at the rate of 5/8 per cent. per annum on the
undrawn amount of the Loan.
17.2 The Borrower shall pay to the Lender or the Security Trustee on its
demand the amount of all expenses (including travel expenses) incurred by the
Lender or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document or
with any transaction contemplated by a Finance Document or a related document.
40
17.3 The Borrower shall pay to the Lender or the Security Trustee, on its
demand, the amount of all expenses (including travel expenses) incurred by the
Lender or the Security Trustee in connection with:
(a) any amendment or supplement to a Finance Document, or any
proposal for such an amendment to be made;
(b) any consent or waiver by the Lender or the Security Trustee
concerned under or in connection with a Finance Document, or
any request for such a consent or waiver;
(c) the valuation of any security provided or offered under Clause
12 or any other matter relating to such security; or
(d) any step taken by the Lender or the Security Trustee with a
view to the protection, exercise or enforcement of any right
or Security Interest created by a Finance Document or for any
similar purpose.
There shall be recoverable under paragraph (d) the full amount of all legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.
17.4 The Borrower shall promptly pay any tax payable on or by reference to
any Finance Document, and shall, on the Lender's demand, fully indemnify the
Lender and the Security Trustee against any liabilities and expenses resulting
from any failure or delay by the Borrower to pay such a tax.
17.5 A notice which is signed by two officers of the Lender or the Security
Trustee, which states that a specified amount, or aggregate amount, is due to
the Lender or the Security Trustee (as the case may be) under this Clause 17
and which indicates (without necessarily specifying a detailed breakdown) the
matters in respect of which the amount, or aggregate amount, is due shall be
prima facie evidence that the amount, or aggregate amount, is due.
18 INDEMNITIES
41
18.1 The Borrower shall fully indemnify the Lender and the Security Trustee
on its demand in respect of all expenses, liabilities and losses which are
incurred by the Lender or the Security Trustee, or which the Lender or the
Security Trustee reasonably and with due diligence estimates that it will
incur, as a result of or in connection with:
(a) the Loan not being borrowed on the date specified in the
Drawdown Notice for any reason other than a default by the
Lender or the Security Trustee;
(b) the receipt or recovery of all or any part of the Loan or an
overdue sum otherwise than on the last day of an Interest
Period or other relevant period;
(c) any failure (for whatever reason) by the Borrower to make
payment of any amount due under a Finance Document on the due
date or, if so payable, on demand (after giving credit for any
default interest paid by the Borrower on the amount concerned
under Clause 6);
(d) the occurrence and/or continuance of an Event of Default or a
Potential Event of Default and/or the acceleration of repayment
of the Loan under Clause 16;
and in respect of any tax (other than tax on its overall net income) for
which the Lender or the Security Trustee is liable in connection with
any amount paid or payable to the Lender (whether for its own account or
otherwise) under any Finance Document.
18.2 Without limiting its generality, Clause 18.1 covers any liability,
expense or loss, including a loss of a prospective profit, incurred by the
Lender or the Security Trustee:
(a) in liquidating or employing deposits from third parties
acquired or arranged to fund or maintain all or any part of
the Loan and/or any overdue amount (or an aggregate amount
which includes the Loan or any overdue amount); and
(b) in terminating, or otherwise in connection with, any interest
and/or currency swap or any other
42
transaction entered into (whether with another legal entity or
with another office or department of the Lender or the Security
Trustee) to hedge any exposure arising under this Agreement or a
number of transactions of which this Agreement is one.
18.3 The Borrower shall fully indemnify the Lender and the Security Trustee
on its demand in respect of all claims, demands, proceedings, liabilities,
taxes, losses and expenses of every kind ("liability items") which may be made
or brought against, or incurred by, the Lender or the Security Trustee, in any
country, in relation to:
(a) any action taken, or omitted or neglected to be taken, under
or in connection with any Finance Document by the Lender or
the Security Trustee or by any receiver appointed under a
Finance Document;
(b) any other event, matter or question which occurs or arises at
any time during the Security Period and which has any
connection with, or any bearing on, any Finance Document, any
payment or other transaction relating to a Finance Document or
any asset covered (or previously covered) by a Security
Interest created (or intended to be created) by a Finance
Document;
other than liability items which are shown to have been caused mainly
and directly by the gross and culpable negligence or the dishonesty of
the Lender's or the Security Trustee's own officers or employees.
18.4 Without prejudice to its generality, Clause 18.3 covers
any liability items which arise, or are asserted, under or in connection with
any law relating to safety at sea, pollution or the protection of the
environment.
18.5 If any sum due from the Borrower or any Security Party to the Lender
or the Security Trustee under a Finance Document or under any order or judgment
relating to a Finance Document has to be converted from the currency in which
the Finance Document provided for the sum to be paid (the "Contractual
Currency") into another currency (the "Payment Currency") for the purpose of:
43
(a) making or lodging any claim or proof against the Borrower or
any Security Party, whether in its liquidation, any
arrangement involving it or otherwise; or
(b) obtaining an order or judgment from any court or other
tribunal; or
(c) enforcing any such order or judgment;
the Borrower shall indemnify the Lender against the loss arising when
the amount of the payment actually received by the Lender is converted
at the available rate of exchange into the Contractual Currency.
Here the Available rate of exchange" means the rate at which the Lender
is able at the opening of business (London time) on the Business Day
after it receives the sum concerned to purchase the Contractual
Currency with the Payment Currency.
18.6 Clause 18.5 creates a separate liability of the Borrower which is
distinct from its other liabilities under the Finance Documents and which
shall not be merged in any judgment or order relating to those other
liabilities.
18.7 A notice which is signed by two officers of the Lender, which states
that a specified amount, or aggregate amount, is due to the Lender under this
Clause 18 and which indicates (without necessarily specifying a detailed
breakdown) the matters in respect of which the amount, or aggregate amount, is
due shall be prima facie evidence that the amount, or aggregate amount, is due.
19 NO SET-OFF OR TAX DEDUCTION
19.1 All amounts due from the Borrower under a Finance Document shall be
paid.
(a) without any form of set-off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction
which the Borrower is required by law to make.
44
19.2 If the Borrower is required by law to make a tax deduction from any
payment:
(a) the Borrower shall notify the Lender as soon as it becomes
aware of the requirement;
(b) the Borrower shall pay the tax deducted to the appropriate
taxation authority promptly, and in any event before any fine
or penalty arises;
(c) the amount due in respect of the payment shall be increased by
the amount necessary to ensure that the Lender and the Security
Trustee receives and retains (free from any liability relating
to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise
have received.
19.3 Within one month after making any tax deduction, the Borrower shall
deliver to the Lender documentary evidence satisfactory to the Lender that the
tax had been paid to the appropriate taxation authority.
19.4 In this Clause 19 "tax deduction" means any deduction or withholding
for or on account of any present or future tax except tax on the Lender's or
Security Trustee's overall net income.
20 ILLEGALITY, ETC
20.1 This Clause 20 applies if the Lender notifies the Borrower that it has
become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a
new law, an amendment to an existing law or a change in the
manner in which an existing law is or will be interpreted or
applied; or
(b) contrary to, or inconsistent with, an official requirement,
for the Lender to maintain or give effect to any of its obligations
under this Agreement in the manner contemplated by this Agreement.
45
20.2 On the Lender so notifying the Borrower, the Lender's obligation to
make the Loan shall terminate; and thereupon or, if later, on the date
specified in the Lender's notice as the date on which the notified event would
become effective the Borrower shall prepay the Loan in full in accordance with
Clause 7.
21 INCREASED COSTS
21.1 This Clause 21 applies if the Lender notifies the Borrower that it
considers that as a result of:
(a) the introduction or alteration after the date of this Agreement
of a law or an official requirement or an alteration after the
date of this Agreement in the manner in which a law is
interpreted or applied (disregarding any effect which relates
to the application to payments under this Agreement of a tax
on the Lender's overall net income); or
(b) the effect of complying with any official requirement
(including any which relates to capital adequacy or liquidity
controls or which affects the manner in which the Lender
allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the
interpretation or application of which is altered, after the
date of this Agreement,
is that the Lender (or a parent company of it) has incurred or will
incur an "increased cost", that is to say,:
(i) an additional or increased cost incurred as a result
of, or in connection with, the Lender having entered
into, or being a party to, this Agreement or having
taken an assignment of rights under this Agreement, of
funding or maintaining the Loan or performing its
obligations under this Agreement, or of having
outstanding all or any part of the Loan or other
unpaid sums; or
(ii) a reduction in the amount of any payment to the Lender
under this Agreement or in
46
the effective return which such a payment represents
to the Lender or on its capital;
(iii) an additional or increased cost of funding all or
maintaining all or any of the advances comprised in a
class of advances formed by or including the Loan
or (as the case may require) the proportion of that
cost attributable to the Loan; or
(iv) a liability to make a payment, or a return foregone,
which is calculated by reference to any amounts
received or receivable by the Lender under this
Agreement;
but not an item attributable to a chance in the rate of
tax on the overall net income of the Lender (or a parent
company of it) or an item covered by the indemnity for
tax in Clause 18.1 or by Clause 19.
21.2 The Borrower shall pay to the Lender, on its demand, the amounts which
the Lender from time to time notifies the Borrower that it has specified to be
necessary to compensate it for the increased cost.
21.3 If the Borrower is not willing to continue to compensate the Lender for
the increased cost under Clause 21.2, the Borrower may give the Lender not less
than 14 days' notice of its intention to prepay the Loan at the end of an
Interest Period.
21.4 That notice shall be irrevocable; and on the date specified in its
notice of intended prepayment, the Borrower shall prepay (without premium or
penalty) the Loan, together with accrued interest thereon at the applicable
rate plus the Margin.
21.5 Clause 7 shall apply in relation to the prepayment.
22 CHANGES IN CIRCUMSTANCES
22.1 This Clause 22 applies if by reason of circumstances affecting the
London Interbank Market the Lender is unable to determine LIBOR in accordance
with Clause 4.3 or is unable to
47
obtain Sterling in the London Interbank Market in order to fund the Loan (or
any part of it) during any Interest Period.
22.2 The Lender shall promptly notify the Borrower stating the circumstances
which have caused its notice to be given.
22.3 If the Lender's notice is served on the Borrower before the Loan is
advanced, the Lender's obligation to advance the Loan shall be suspended while
the circumstances referred to in the Lender's notice continue.
22.4 The Borrower and the Lender shall use reasonable endeavors to agree,
within the 30 days after the date on which the Lender serves its notice under
Clause 22.2 (the "Negotiation Period"), an alternative interest rate or (as the
case may be) an alternative basis for the Lender to fund or continue to fund
the Loan during the Interest Period concerned.
22.5 Any alternative interest rate or an alternative basis which is agreed
during the Negotiation Period shall take effect in accordance with the terms
agreed.
22.6 However, if an alternative interest rate or alternative basis is not
agreed within the Negotiation Period, and the relevant circumstances are
continuing at the end of the Negotiation Period, then the Lender shall set an
interest period and interest rate representing the cost of funding of the
Lender in Sterling or in any available currency of the Loan plus the Margin;
and the procedure provided for by this Clause 22.6 shall be repeated if the
relevant circumstances are continuing at the end of the interest period so set
by the Lender.
22.7 If the Borrower does not agree with an interest rate set by the Lender
under Clause 22.6, the Borrower may give the Lender not less than 15 Business
Days' notice of its intention to prepay at the end of the interest period set
by the Lender.
22.8 That notice shall be irrevocable; and on the last Business Day of the
interest period set by the Lender, the Borrower shall prepay (without premium
or penalty) the Loan, together with accrued interest thereon at the applicable
rate plus the Margin.
22.9 Clause 7 shall apply in relation to the prepayment.
48
23 SET-OFF
23.1 The Lender and the Security Trustee may without prior notice:
(a) apply any balance (whether or not then due) which at any time
stands to the credit of any account in the name of the
Borrower at any office in any country of the Lender or the
Security Trustee in or towards satisfaction of any sum then due
from the Borrower to the Lender or the Security Trustee under
any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a
deposit of the Borrower;
(ii) convert or translate all or any part of a deposit or
other credit balance into Sterling;
(iii) enter into any other transaction or make any entry
with regard to the credit balance which the Lender or
the Security Trustee considers appropriate.
23.2 Neither the Lender nor the Security Trustee shall be obliged to
exercise any of its rights under Clause 23.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of accounts,
charge, lien or other right or remedy to which the Lender or the Security
Trustee is entitled (whether under the general law or any document).
24 TRANSFERS AND CHANGES IN LENDING OFFICES
24.1 The Borrower may not, without the consent of the Lender:
(a) transfer any of its rights or obligations under any Finance
Document; or
(b) enter into any merger, de-merger or other reorganization, or
carry out any other act, as a result of which any of its rights
or liabilities would vest in, or pass to, another person,
49
24.2 Subject to Clauses 24.4, a Lender (the "Transferor Lender") may at any
time at its sole cost and expense, with the consent of the Borrower (such
consent not to be unreasonably withheld and not to be required in the case of a
transfer to a subsidiary or the parent company of the Transferor Lender or to
another subsidiary of its parent company), cause:
(a) its rights in respect of all or part of the Loan;
or
(b) its obligations to advance all or part of the Loan;
or
(c) a combination of (a) and (b);
to be (in the case of its rights) transferred to, or (in the case of
its obligations) assumed by, another bank or financial institution (a
"Transferee Lender") by delivering to the Security Trustee a completed
certificate in the form set out in Schedule 3 with any modifications
approved or required by the Security Trustee (a "Transfer Certificate")
executed by the Transferor Lender and the Transferee Lender.
24.3 As soon as reasonably practicable after a Transfer Certificate is
delivered to the Security Trustee, it shall (unless it has reason to believe
that the Transfer Certificate may be defective):
(a) sign the Transfer Certificate on behalf of itself, the
Borrower and each Security Party;
(b) on behalf of the Transferee Lender, send to the Borrower and
each Security Party letters or faxes notifying them of the
Transfer Certificate and attaching a copy of it;
(c) send to the Transferee Lender copies of the letters or faxes
sent under paragraph (b) above.
24.4 A Transfer Certificate becomes effective on the date, if any, specified
in the Transfer Certificate as its effective date, provided that it is signed
by the Security Trustee under Clause 24.3 on or before that date.
50
24.5 No assignment or transfer of any right or obligation of a Lender under
any Finance Document is binding on, or effective in relation to, the Borrower,
any Security Party or the Security Trustee unless it is effected, evidenced or
perfected by a Transfer Certificate.
24.6 However, if a Lender enters into any merger, de-merger or other
reorganization as a result of which all its rights or obligations vest in
another person (the "successor"), the Security Trustee may, if it sees fit, by
notice to the successor and the Borrower waive the need for the execution and
delivery of a Transfer Certificate; and, upon service of the Security Trustee's
notice, the successor shall become a Lender with the same obligations and
rights as were held by the predecessor Lender.
24.7 A Transfer Certificate takes effect in accordance with English law as
follows:-
(a) to the extent specified in the Transfer Certificate, all rights
and interests (present, future or contingent) which the
Transferor Lender has under or by virtue of the Finance
Documents are assigned to the Transferee Lender absolutely,
free of any defects in the Transferor Lender's title and of any
rights or equities which the Borrower or any Security Party had
against the Transferor Lender;
(b) the Transferor Lender's obligations are discharged to the
extent specified in the Transfer Certificate;
(c) the Transferee Lender becomes a Lender with the obligations
previously held by the Transferor Lender specified in the
Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of
the Finance Documents which are applicable to the Lenders
generally, including those about the exclusion of liability on
the part of, and the indemnification of, the Security
Trustee and, to the extent that the Transferee Lender becomes
bound by those provisions (other
51
than those relating to exclusion of liability), the Transferor
Lender ceases to be bound by them;
(e) an Advance or part of an Advance which the Transferee Lender
makes after the Transfer Certificate's effective date ranks in
point of priority and security in the same way as it would
have ranked had it been made by the transferor, assuming that
any defects in the transferor's title and any rights or
equities of the Borrower or any Security Party against the
Transferor Lender had not existed; and
(f) the Transferee Lender becomes entitled to all the rights under
the Finance Documents which are applicable to the Lenders
generally and to the extent that the Transferee Lender becomes
entitled to such rights, the Transferor Lender ceases to be
entitled to them.
The rights and equities of the Borrower or any Security Party referred
to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
24.8 The Borrower irrevocably authorizes the Security Trustee to sign
Transfer Certificates on its behalf.
24.9 The Lender may sub-participate all or any part of its rights and/or
obligations under or in connection with the Finance Documents without the
consent of, or any notice to, the Borrower, any Security Party or the Security
Trustee.
24.10 The Lender may disclose to a potential transferee or sub-participant
any information which the Lender has received in relation to the Borrower, any
Security Party or their affairs under or in connection with any Finance
Document, unless the information is clearly of a confidential nature.
24.11 The Lender may change its lending office by giving notice to the
Borrower and the change shall become effective on the later of:
(a) the date on which the Borrower receives the notice; and
52
(b) the date, if any, specified in the notice as the date on which
the change will come into effect.
24.12 If at the time of any transfer or chance of lending office by the
Lender, circumstances exist which would oblige the Borrower to pay to the
Transferee Lender or the Lender under Clauses 19, 20 or 21 any sum in excess of
the sum (if any) which it would have been obliged to pay to the Lender under
the relevant Clause in the absence of that transfer or change of lending office
the Borrower shall not be obliged to pay that excess.
25 VARIATIONS AND WAIVERS
25.1 A document shall be effective to vary, waive, suspend or limit any
provision of a Finance Document, or the Lender's or the Security Trustee's
rights or remedies under such a provision or the general law, only if the
document is signed, or specifically agreed to by fax or telex, by the Borrower,
the Security Trustee and the Lender and, if the document relates to a Finance
Document to which a Security Party is party, by that Security Party.
25.2 Except for a document which satisfies the requirements of Clauses 25.1,
no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Lender or the Security Trustee (or any person
acting on its behalf) shall result in the Lender or the Security Trustee (or
any person acting on its behalf being taken to have varied, waived, suspended
or limited, or being precluded (permanently or temporarily) from enforcing,
relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by the Borrower or a Security Party of an obligation
under a Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by
the general law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be
53
enforced, or such right or remedy to be exercised, within
a certain time.
26 NOTICES
26.1 Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter, fax or telex;
and references in the Finance Documents to written notices, notices in writing
and notices signed by particular persons shall be construed accordingly.
26.2 A notice shall be sent:
(a) to the Borrower: 00 Xxxxxxxxx Xxxx
Xxxxxx XX00 0XX
Fax No: 0000 000 000
with a copy to:
000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx
Xxxxxxxxx 00000
Fax No: 000 000 0000
and
0 Xxxx Xxx Xxxx
Xxxxx 0000
Xxxxxxx
Xxxxx 00000
Fax No: 000 000 0000
(b) to the Lender or the
Security Trustee: X.X. Xxx 0000 Xxxxxxx
0000 Xxxx
Fax No: 00 00 00 00
(att: International
Loans Admin.)
or to such other address as the relevant party may notify the other.
26.3 Subject to Clauses 26.4 and 26.5:
(a) a notice which is delivered personally or posted shall be
deemed to be served, and shall take effect, at the time when
it is delivered;
54
(b) a notice which is sent by telex or fax shall be deemed to be
served, and shall take effect, 2 hours after its transmission
is completed.
26.4 However, if under Clause 26.3 a notice would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time;
the notice shall (subject to Clause 26.5) be deemed to be served, and
shall take effect, at 9 a.m. on the next day which is such a business
day.
26.5 Clauses 26.3 and 26.4 do not apply if the recipient of a notice
notifies the sender within 2 hours after the time at which the notice would
otherwise be deemed to be served that the notice has been received in a form
which is illegible in a material respect.
26.6 Any notice under or in connection with a Finance Document shall be in
English.
26.7 In this Clause "notice" includes any demand, consent, authorization,
approval, instruction, waiver or other communication.
27 THE SECURITY TRUSTEE
27.1 In this Clause the "Trust Property" means:
(a) all Security Interests and all rights granted to, or held or
exercisable by, the Security Trustee under or by virtue of the
Finance Documents, except rights clearly intended for the sole
benefit or protection of the Security Trustee;
(b) all moneys which are received or recovered by or on behalf of
the Security Trustee under or by virtue of any Security
Interest or right covered by paragraph (a) above, including any
moneys
55
which are received or recovered by it as a result of
the enforcement or exercise by it of such a Security Interest
or right;
(c) all moneys and other assets which may accrue in respect of, or
be derived from, any moneys covered by paragraph (b) above; and
(d) any rights or other assets which the Security Trustee, by
notice to the Lender, states shall be deemed to form part of
the Trust Property;
except any moneys which the Security Trustee has transferred to the
Lender or (being entitled to do so) has retained in accordance with the
following provisions of this Clause.
27.2 The Security Trustee shall:
(a) hold the Trust Property on trust for the Lender and the
Security Trustee; and
(b) deal with the Trust Property;
in accordance with this Clause and the other provisions of the Finance
Documents.
27.3 Except as expressly stated to the contrary in any Finance
Document, any moneys which the Security Trustee receives or recovers and which
are Trust Property shall (without prejudice to the rights of the Security
Trustee under any Finance Document to credit any moneys received or recovered
by it to any suspense account) be transferred to the Lender for application in
accordance with Clauses 13 and 14.
27.4 However, before transferring such moneys to the Lender, the Security
Trustee may deduct any sum then due and payable under this Agreement or any
other Finance Document to the Security Trustee or any receiver, agent or other
person appointed by it and retain that sum for itself or, as the case may
require, pay it to the other person to whom it is then due and payable; for
this purpose if the Security Trustee has become entitled to require a sum to be
paid to it on demand, that sum shall be treated as due and payable, even if no
demand has yet been served.
56
27.5 In addition to its rights under or by virtue of this Agreement and the
Finance Documents, the Security Trustee shall have all of the rights conferred
on a trustee by the Trustee Xxx 0000 and any other applicable law for the time
being in force.
27.6 The duties of the Security Trustee are limited to those expressly set
out in this Agreement and the Finance Documents; and the Lender waives any
additional or more extensive fiduciary or other obligation which the Security
Trustee might otherwise have by virtue of its position or its designation as
trustee.
27.7 Subject to the provisions of the Finance Documents:
(a) the Security Trustee shall act in connection with the Finance
Documents in accordance with the written instructions of the
Lender; but
(b) in the absence of any such instructions, the Security Trustee
shall not be obliged to act.
27.8 The Security Trustee shall not have any obligation to request the
Lender to give it any instructions or to make any determination.
27.9 The Security Trustee cannot be required by the Lender:
(a) to commence, join in or defend any form of legal proceeding or
to take or participate in any other action which it considers
will or may expose it to any liability (whether for expenses or
otherwise) unless it has first received a letter of credit in
such amount and terms and from such a bank as it may require; or
(b) to take or participate in any action which the Security
Trustee considers is or may be contrary to any Finance Document
or unlawful or contrary to or inconsistent with any official
requirement or the policy of any authority which regulates or
supervises any activity of the Security Trustee or the Lender.
27.10 Any action which the Security Trustee takes or purports to take on
behalf of the Lender at a time when it had not been authorized to do so shall,
if subsequently ratified, be as valid
57
as regards the Borrower, the Security Parties and the Lender as if the Security
Trustee had been expressly authorized in advance.
27.11 The Security Trustee shall not have or incur any obligation or
responsibility to the Lender, the Borrower or any Security Party except those
expressly specified in the Finance Documents; and no term shall be implied into
any Finance Document to the effect that the Security Trustee has such an
obligation or responsibility.
27.12 The Security Trustee shall not be liable to the Borrower, any Security
Party or the Lender for any loss or expense attributable to any action taken or
omitted to be taken by the Security Trustee, or any of its officers, employees
or agents under or in connection with any Finance Document unless the loss or
expense is shown to have been caused directly and mainly by the gross and
culpable negligence or the dishonesty of the Security Trustee's own officers or
employees; and neither the Borrower, nor any Security Party nor the Lender
shall make any claim against an officer, employee or agent of the Security
Trustee in respect of such a loss or expense unless he is shown to have acted
dishonestly.
27.13 The Security Trustee shall have no responsibility to keep under review
or to report to the Lender about:
(a) the financial position or the affairs of the Borrower, any
Security Party or any other person; or
(b) the accuracy of any representation, warranty or
statement made (or deemed to be repeated), or any information
provided (whether before the date of this Agreement or
otherwise), by the Borrower or any Security Party in or in
connection with any Finance Document; or
(c) the title, value or any other matter relating to,
any asset covered or proposed to be covered by
Security Interest created by a Finance Document;
or
(d) whether any Event of Default or Potential Event
of Default has occurred.
27.14 The Security Trustee shall not be treated as having
58
knowledge, or any form of notice, of:
(a) an Event of Default or a Potential Event of Default; or
(b) any other event or matter which is relevant to any Finance
Document;
until the Event of Default or Potential Event of Default or (as the
case may require) the other event or matter concerned has been
specifically brought to the attention of the officers of the Security
Trustee who have direct responsibility for the carrying out of the
Security Trustee's functions under the Finance Documents and so brought
to their attention specifically for the purposes of the Finance
Documents.
27.15 The Security Trustee shall not be responsible to the Lender for:
(a) any breach by the Borrower or a Security Party of any Finance
Document; or
(b) the business merits of the terms of any Finance Document; or
(c) ensuring and preserving the validity or enforceability of any
Finance Document or the validity, enforceability or priority of
any Security Interest created or purportedly created by a
Finance Document.
27.16 The Security Trustee may:
(a) engage lawyers, accountants and other experts, and rely on
their advice;
(b) rely on any communication or document, including any Transfer
Certificate, which it believes to be genuine and correct and
to have been communicated, sent or signed by (or with the
authority of) the person by whom (or on whose behalf) it
purports to be communicated, sent or signed; and
59
(c) perform all or any of its functions under this Agreement and
the other Finance Documents through any office or branch of
the Security Trustee which it may from time to time select
and notify to the other parties or through any kind of
agent and, in particular, by power of attorney or otherwise
delegate the exercise of any of its powers and discretions
under the Finance Documents to any person on such terms (as to
duration, sub-delegation, remuneration, exoneration and
otherwise) as the Security Trustee may consider appropriate.
27.17 The Security Trustee shall be fully entitled, without liability to
account or disclose to the Lender, to enter into:
(a) banking, investment and/or other transactions of every kind with
the Borrower or any Security Party (including, but not limited
to, any interest or currency swap or other transaction, whether
related to this Agreement or not, and acting as syndicate
agent and/or security trustee for, and/or participating in,
other facilities to the Borrower or a Security Party), and
(b) transactions relating, or dealings in, to any securities issued
or to be issued by the Borrower or any Security Party;
as though the Security Trustee were not a trustee of the
Lender; and, in particular, the Security Trustee:
(i) shall have no obligation to make available to the
Lender any information which it acquires in connection
with any such transaction or to use such information
for the benefit of the Lender or for the purposes of
any Finance Document; and
(ii) shall be fully entitled to act or refrain from acting
in relation to any such transaction having exclusive
regard to its own best interests.
60
27.18 At the end of the Security Period, the Security Trustee shall release,
without any covenants for title or other recourse whatsoever, all the Security
Interests created by the Finance Documents, whereupon the Security Trustee
shall be discharged from all liabilities and obligations which it has under
this Agreement and the other Finance Documents.
27.19 The trusts hereby constituted are governed by English law, and the
applicable perpetuity period is 75 years commencing on the date of this
Agreement.
27.20 In this Clause "right" includes any power, discretion or remedy.
28 SUPPLEMENTAL
28.1 The rights and remedies which the Finance Documents give to the Lender
and the Security Trustee are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and
specifically states so, be taken to exclude or limit any right
or remedy conferred by any law.
28.2 If any provision of a Finance Document is or subsequently becomes void,
unenforceable or illegal, that shall not affect the validity, enforceability or
legality of the other provisions of that Finance Document or of the provisions
of any other Finance Document.
28.3 A Finance Document may be executed in any number of counterparts.
29 LAW AND JURISDICTION
29.1 This Agreement is governed by English law.
29.2 Without prejudice to Clause 29.3, the courts of England shall have
jurisdiction to settle any disputes which may arise out of or in connection
with this Agreement.
61
29.3 However, Clause 29.2 is for the exclusive benefit of the Lender, which
reserves the right to bring proceedings in respect of any matter which arises
out of or in connection with this Agreement in the courts of any country which
have or claim jurisdiction in relation to that matter.
29.4 The Borrower waives any objection on the ground of inconvenient forum
to any proceedings which relate to this Agreement being brought:
(a) in the courts of England; and
(b) in any other courts by virtue of Clause 29.3.
29.5 Nothing in this Clause 29 shall exclude or limit any right which the
Lender may have (whether under the law of any country, an international
convention or otherwise) with regard to the bringing of proceedings, the
service of process, the recognition or enforcement of a judgment or any similar
or related matter in any jurisdiction,
29.6 If the Lender commences proceedings in connection with a Finance
Document, that shall not preclude it from commencing proceedings (whether
concurrently or not) with respect to that or any other Finance Document in
another jurisdiction.
AS WITNESS the hands of the duly authorized officers or attorneys
==========
of the parties the day and year first before written.
62
SCHEDULE 1
==========
DRAWDOWN NOTICE
===============
To: Christiania Bank og Kreditkasse
X.X. Xxx 0000 Xxxxxxx
0000 Xxxx
Attention: Loans Administration [ ], 1995
DRAWDOWN NOTICE
===============
1. We refer to the loan agreement (the "Loan Agreement") dated __________
1995 and made between ourselves, as Borrower, and yourselves, as Lender
and Security Trustee, in connection with a facility of up to Pound
Sterling 4,890,000. Terms defined in the Loan Agreement have their
defined meanings when used in this Drawdown Notice.
2. We request to borrow as follows:-
(a) Amount: Pound Sterling [ ]
(b) Drawdown Date: [ ];
(c) Duration of the first Interest Period shall be
[ ] months;
(d) Payment instructions: account in our name and
numbered [ ] with [ ]
of [ ].
3. We represent and warrant that:
(a) the representations and warranties in Clause 9 of
the Loan Agreement would remain true and not
misleading if repeated on the date of this notice
with reference to the circumstances now existing;
63
(b) no Event of Default or Potential Event of Default
has occurred or will result from the borrowing of
the Loan.
[Name of Signatory]
Director
for and on behalf of
Gulf Offshore N.S. Limited
64
SCHEDULE 2
==========
CONDITION PRECEDENT DOCUMENTS
=============================
The following are the documents referred to in Clause 8.1 in relation to the
Loan.
1. A duly executed original of each Finance Document and of
each document required to be delivered by each such
Finance Document, including (but without limitation) all
notices of assignment, acknowledgments and letters of
undertaking required by the Deed of Covenant or the
Collateral General Assignment.
2. Copies of the certificate of incorporation and
constitutional documents of the Borrower and each Security
Party.
3. Copies of resolutions of the directors of the Borrower and
each Security Party authorizing the execution of each of
the Finance Documents to which the Borrower or that
Security Party is a party and, in the case of the
Borrower, authorizing named officers to give the Drawdown
Notice and other notices under this Agreement and
ratifying the execution of the MOA.
4. The original of any power of attorney under which any
Finance Document is executed on behalf of the Borrower or
a Security Party.
5. Copies of all official consents which the Borrower or any
Security Party requires to enter into, or make any payment
under, any Finance Document or the MOA.
6. The originals of any mandates or other documents required in
connection with the opening or operation of the
Earnings Account.
7. A copy of the MOA.
8. Documentary evidence that the Ship, and the Collateral
Ship:
65
(a) is definitively and permanently registered in the
name of the Borrower or GOMI (as the case may
be) under British flag, in the case of the Ship,
and Panamanian flag, in the case of the Collateral
Ship.
(b) is in the absolute and unencumbered ownership of
the Borrower or GOMI (as the case may be) save as
contemplated by the Finance Documents;
(c) maintains the class + 1A1 with Det norske Veritas
or +Al with American Bureau of Shipping (as the
case may be) free of all recommendations and
qualifications of such Classification Society;
(d) the Mortgage or the Collateral Mortgage has been
duly registered as a valid first priority ship
mortgage in accordance with the laws of Bermuda or
Panama, as the case may be; and
(e) is insured in accordance with the provisions of the
Deed of Covenant or the Collateral General
Assignment and all requirements therein in respect
of insurances have been complied with.
9. Favorable legal opinions from lawyers appointed by the
Lender on such matters concerning the laws of Bermuda,
Panama and such other relevant jurisdictions as the Lender
may require.
Each of the documents specified in paragraphs 2, 3, 5 and 7 above and every
other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of
the Borrower.
66
SCHEDULE 3
==========
TRANSFER CERTIFICATE
====================
The Transferor and the Transferee accept exclusive responsibility
================================================================
for ensuring that this Certificate and the transaction to which
===============================================================
it relates comply with all legal and regulatory requirements
============================================================
applicable to them respectively.
===============================
To: Christiania Bank og Kreditkasse for itself, as Security Trustee, and for
and on behalf of the Borrower and each Security Party as defined in the Loan
Agreement referred to below.
[ ], 1995
1. This Certificate relates to a Loan Agreement ("the
"Agreement") dated [ ], 1995 and made between (1) Gulf Offshore
N.S. Limited (the "Borrower") and (2) Christiania Bank og Kreditkasse as
Lender and Security Trustee for a loan facility of; Pound Sterling
4,890,000.
2. In this Certificate:
"the Relevant Parties" means the Borrower, each Security Party, the
Security Trustee and [the] [each] Lender;
"the Transferor" means (full name) of (lending office);
"the Transferee" means (full name) of (lending office).
Terms defined in the Loan Agreement shall, unless the contrary intention
appears, have the same meanings when used in this Certificate.
67
3. The effective date of this Certificate is ________, 19__,
provided that this Certificate shall not come into effect
unless it is signed by the Security Trustee on or before
that date.
4. The Transferor assigns to the Transferee absolutely all
rights and interests (present, future or contingent) which
the Transferor has as Lender under or by virtue of the Loan
Agreement and every other Finance Document [in relation to
[ ] per cent. of the Loan].
5. By virtue of this Transfer Certificate and Clause 27 of the
Loan Agreement, the Transferor is discharged [entirely from
its obligations under the Loan Agreement] [from [ ]
per cent. of its obligations under the Loan Agreement, which
percentage represents Pound Sterling [ ].
6. The Transferee undertakes with the Transferor and each of
the Relevant Parties that the Transferee will observe and
perform all the obligations under the Finance Documents
which Clause 27 of the Loan Agreement provides will become
binding on it upon this Certificate taking effect,
7. The Security Trustee, at the request of the Transferee
(which request is hereby made) accepts, for the Security
Trustee itself and for and on behalf of every other
Relevant Party, this Certificate as a Transfer Certificate
taking effect in accordance with Clause 27 of the Loan
Agreement.
8. The Transferor:
(a) warrants to the Transferee and each Relevant Party
(i) that the Transferor has full capacity to enter
into this transaction and has taken all corporate
action and obtained all official consents which are
in connection with this transaction; and (ii) that
this Certificate is valid and binding as regards the
Transferor;
(b) warrants to the Transferee that the Transferor is
absolutely entitled, free of encumbrances, to all
the rights and interests covered by the assignment
in paragraph 2 above;
68
(b) undertakes with the Transferee that the Transferor
will, at its own expense, execute any documents
which the Transferee reasonably requests for
perfecting in any relevant jurisdiction the
Transferee's title under this Transfer Certificate
or for a similar purpose.
9. The Transferee:
(a) confirms that it has received a copy of the Loan
Agreement;
(b) agrees that it will have no rights of recourse on
any ground against either the Transferor, the
Security Trustee or (the) (any) Lender in the event
that (i) the Finance Documents prove to be invalid
or ineffective, (ii) the Borrower or any Security
Party fails to observe or perform its obligations,
or to discharge its liabilities, under the Finance
Documents (iii) it proves impossible to realize any
asset covered by a Security Interest created by a
Finance Document, or the proceeds of such assets are
insufficient to discharge the liabilities of the
Borrower or any Security Party under the Finance
Documents;
(c) agrees that it will have no rights of recourse on
any ground against the Security Trustee or (the)
(any) Lender in the event that this Certificate
proves to be invalid or ineffective;
(d) warrants to the Transferor and each Relevant Party
(i) that it has full capacity to enter into this
transaction and has taken all corporate action and
obtained all official consents which it needs to
take or obtain in connection with this transaction;
and (ii) that this Certificate is valid and binding
as regards the Transferee; ,and
(e) confirms the accuracy of the administrative details
set out below regarding the Transferee.
10. The Transferor and the Transferee each undertake with the
Security Trustee severally, on demand, fully to indemnify
the Security Trustee in respect of any claim, proceeding,
69
liability or expense (including all legal expenses) which
it may incur in connection with this Certificate or any
matter arising out of it, except such as are shown to have
been mainly and directly caused by the gross and culpable
negligence or dishonesty of the Security Trustee's own
officers or employees.
[Name of Transferor] [Name of Transferee]
By: By:
Date: Date:
Security Agent
==============
Signed for itself and for and on behalf of itself
as Security Trustee and for every other Relevant Party
Christiania Bank og Kreditkasse
By:
Date:
Administrative Details of Transferee
====================================
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
70
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:
Note: This Transfer Certificate alone may not be sufficient to
=====
transfer a proportionate share of the Transferor's interest in the security
constituted by the Finance Documents in the Transferor's or Transferee's
jurisdiction. It is the responsibility of each Lender to ascertain whether any
other documents are required for this purpose.
71
SCHEDULE 4
==========
COMPLIANCE CERTIFICATE
======================
Christiania Bank og Kreditkasse Date _____________,1995
X.X. Xxx 0000 Xxxxxxx
0000 Xxxx
Xxxxxx
Att: E. Xxxxxxxx Aalby
COMPLIANCE CERTIFICATE
Please accept this letter as certification that as of (date)*, Gulf Offshore
N.S. Limited was in compliance with all of the covenants stipulated in Clause
11.4 of the loan agreement dated [ ] 1995 between ourselves and
Christiania Bank og Kreditkasse. With regards to the covenants in Clause 11.4:-
1. The Company had Pound Sterling [ ] in Liquid Assets
as of [ ]*;
2. The Company's Value Adjusted Equity as of [ ]* was
Pound Sterling [ ]
3. The Company's Value Adjusted Total Assets as of
[ ] was Pound Sterling [ ], (based on the
following vessel valuations):- [ ]
4. The ratio of the Company's Budgeted Operating Profit to
Budgeted Financial Expenses as of [ ]* was
[ :1],
5. The Book Equity of Gulf Offshore Marine International, Inc.
as of [ ] was USD [ ].
Regards,
Gulf Offshore N.S. Limited
* The quarter end for which compliance is being certified.
72
EXECUTION PAGE(S)
=================
SIGNED by )
/Xxxxx Xxxxxxx Xxxx/ )
for and on behalf of ) /Xxxxx Xxxx/
GULF OFFSHORE N.S. )
LIMITED in the presence of:- )
Jaiaman Xxxxxxxx
Solicitor
Xxxxxx XX0
SIGNED by )
/Xxxxxx Xxxxxxxxx/ )
for and on behalf of )
CHRISTIANIA BANK OG ) /Xxxxxx Xxxxxxxxx/
KREDITKASSE as Lender and )
Security Trustee in the )
presence of:- )
Jaiaman Xxxxxxxx
Solicitor
Xxxxxx XX0
