EXHIBIT 10.7
TABLE OF CONTENTS
CLAUSE SUBJECT PAGE
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1. PURPOSE AND DEFINITIONS ................................ 1
2. THE LENDER'S COMMITMENT ................................ 5
3. AVAILABILITY ........................................... 5
4. INTEREST ............................................... 7
5. REPAYMENT .............................................. 7
6. COMPULSORY AND VOLUNTARY PREPAYMENT .................... 7
7. COMMITMENT AND ARRANGEMENT FEES ........................ 8
8. INDEMNITY .............................................. 8
9. PAYMENTS ............................................... 11
10. APPLICATION OF MONEYS .................................. 12
11. DEFAULT ................................................ 13
12. SECURITY ............................................... 15
13. REPRESENTATIONS AND WARRANTIES ......................... 16
14. COVENANTS .............................................. 17
15. SET-OFF ................................................ 19
16. ASSIGNMENT AND PARTICIPATION ........................... 20
17. MISCELLANEOUS .......................................... 20
18. NOTICES ................................................ 20
19. PROPER LAW AND JURISDICTION ............................ 21
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THIS AGREEMENT is made the 23rd day of April, 1999 BETWEEN:
(1) THE LENDER (as hereinafter defined); and
(2) THE BORROWER (as hereinafter defined) jointly and severally.
IT IS XXXXXX AGREED as follows:-
1. PURPOSE AND DEFINITIONS
1.1 This agreement contains the terms and conditions upon which the Lender will
make available to the Borrower a secured loan facility of up to but not
exceeding fourteen million two hundred and fifty thousand United States
Dollars (USD14,250,000) of which up to nine million seven hundred and fifty
thousand United States Dollars (USD9,750,000) may comprise a guarantee
facility.
1.2 In this agreement the following words and expressions shall have the
following meanings: -
"BORROWED MONEY"
means Indebtedness incurred in respect of (i) money borrowed or raised,
(ii) any bond, note, loan stock, debenture or similar instrument, (iii)
acceptance or documentary credit facilities, (iv) deferred payments for
assets or services acquired, (v) rental payments under and any amounts
payable on termination of leases (whether in respect of ships, land,
machinery, equipment or otherwise) entered into primarily as a method of
raising finance or of financing the acquisition of the asset leased, (vi)
guarantees, bonds, stand-by letters of credit or other instruments issued
in connection with the performance of contracts, and (vii) guarantees or
other assurances against financial loss in respect of Indebtedness of any
person, firm or company failing within any of (i) to (vi) above;
"BORROWER"
means Albuferra Investments, Inc., a company incorporated under the laws
of Panama with its registered office at c/o Xxxxxxx Xxxxx & Xxxxx, Scotia
Plaza, Xx. 00 Xxxxxxx Xxxxxxxx Xxxx x Xxxxx 00, Xxxxx 0, 00 x 00, Xxxxxx,
Xxxxxxxx xx Xxxxxx;
"BUSINESS DAY"
means any day on which banks and foreign exchange markets in Stockholm,
London and New York are open for the transaction of business of the
nature contemplated in this agreement;
"DRAWDOWN DATE"
means the date on which the relevant Drawing is advanced pursuant to
clause 3 hereof;
"DRAWING"
means any one amount advanced or to be advanced pursuant to clause 3
hereof and "Drawings" means more than one of them;
"ENCUMBRANCE"
means any mortgage, charge, pledge, lien, assignment, hypothecation,
title retention, preferential right or trust arrangement and any other
security agreement or arrangement;
"EVENT OF DEFAULT"
means any of the events or circumstances specified in clause 11.1 hereof;
"GUARANTOR"
means Commodore Holdings Limited, a company incorporated under the laws
of Bermuda with its registered office at c/o Francis & Xxxxxxx, Corner
House, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx;
"INDEBTEDNESS"
means any obligation for the payment or repayment of money, whether as
principal or as surety and whether present or future, actual or
contingent;
"INSURANCE ASSIGNMENT"
means the assignment executed pursuant to clause 12.1(B) hereof;
"INTERIOR CONVERTER"
means Jokiyhtyma Oy, a company incorporated under the laws of Finland
with its registered office in Finland;
"LENDER"
means Nordbanken AB (publ), a company incorporated under the laws of
Sweden acting through its office at Xxxxx Xxxxxxxxx 00, XX-000 00
Xxxxxxxxxx, Xxxxxx;
"LOAN"
means up to but not exceeding the Maximum Sum or, where the context so
requires, the aggregate amount of all Drawings from time to time
outstanding;
"MANAGEMENT AGREEMENT"
means the agreement for the management of the Vessel made or to be made
between the Borrower and the Manager;
"MANAGER"
means New Commodore Cruise Lines Limited, a company incorporated under
the laws of Bermuda with its registered office at c/o Francis & Xxxxxxx,
Corner House, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx;
"MAXIMUM SUM"
means fourteen million two hundred and fifty thousand United States
Dollars (USD14,250,000);
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"MOA"
means the agreement for the sale and purchase of the Vessel made or to be
made between the Seller and the Borrower;
"MORTGAGE"
means the first priority statutory mortgage over the Vessel and the
collateral deed of covenants executed pursuant to clause 12.1(A) hereof;
"PERMITTED LIENS"
means liens for current crews' wages and salvage and liens incurred in
the ordinary course of trading the Vessel up to an aggregate amount at
any time not exceeding five percent (5%) of the charter-free sale value
of the Vessel;
"REFUND GUARANTEE"
means any refund guarantee to be provided by the Yard or the Interior
Converter (and to be approved in writing by the Lender) pursuant to the
relevant Refurbishment Contract in respect of any advance payment by the
Borrower thereunder and "Refund Guarantees" means more than one of them;
"REFURBISHMENT CONTRACTS"
means the two agreements made or to be made between the Borrower and the
Yard and between the Borrower and the Interior Converter respectively
(and to be approved in writing by the Lender) for the refurbishment of
the Vessel and "Refurbishment Contract" means either one of them;
"REFURBISHMENT GUARANTEE"
means any guarantee or letter of credit issued by the Lender in favour of
the Yard and/or the Interior Converter pursuant to clause 3.1(C) hereof
and "Refurbishment Guarantees" means more than one of them;
"REFURBISHMENT GUARANTEE AMOUNT"
means at any time the sum of the maximum actual and contingent
liabilities of the Lender in respect of principal, interest (other than
default interest) and commission under all the Refurbishment Guarantees
then issued;
"REPAYMENT INSTALMENTS"
means the instalments for repayment of the Loan and payment of interest
thereon specified in clause 5.1 hereof and "Repayment Instalment" means
any one of them;
"SECURITY DOCUMENTS"
means the documents executed pursuant to clause 12.1 hereof and any other
document or documents from time to time providing and/or evidencing
and/or constituting security in respect of the Loan;
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"SECURITY PARTIES"
means the Borrower, the Guarantor and the Manager and any other party to
any of the Security Documents from time to time (other than the Lender)
and "Security Party" means any one of them;
"SELLER"
means Triple Shipping Inc., a company incorporated under the laws of
Liberia with its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx;
"SUBJECT DOCUMENTS"
means this agreement, the Security Documents, the MOA, the Management
Agreement, the Refurbishment Contracts, any and all Refund Guarantees and
any and all documents executed or to be executed pursuant to any one or
more of these documents;
"TERMINATION DATE"
means 15 October 1999;
"TOTAL LOSS"
means: -
(i) actual or constructive or compromised or agreed or arranged total
loss of the Vessel; or
(ii) requisition for title or other compulsory acquisition of the Vessel
otherwise than by requisition for hire; or
(iii) capture, seizure, arrest, detention or confiscation of the Vessel by
any government or by persons acting or purporting to act on behalf
of any government unless the Vessel is released and restored to the
Borrower from such capture, seizure, arrest or detention within
thirty (30) days after the occurrence thereof;
"UNITED STATES DOLLARS" and "USD"
mean the lawful currency of the United States of America;
"VESSEL"
means the motor vessel named "SOFIA" now registered under Bahamian flag
in the ownership of the Seller which is to be registered under Bahamian
flag in the ownership of the Borrower pursuant to the MOA; and
"YARD"
means Norfolk Shipbuilding & Drydock Corporation, a company incorporated
under the laws of Virginia with its registered office at P.O. Box 2100,
000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, X.X.X.
1.3 References to any document shall be construed to mean that document as
amended and/or varied and/or supplemented from time to time with the
agreement of the relevant parties
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and (where such consent is required by the terms of this agreement or the
relevant document) with the consent of the Lender.
1.4 Clause headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this agreement.
2. THE LENDER'S COMMITMENT
2.1 In reliance upon the representations and warranties contained in clause
13 hereof and in the Security Documents and subject to the terms and
conditions of this agreement the Lender will: -
(A) make part of the Loan available to the Borrower for the purpose of
financing (in part) the purchase of the Vessel by the Borrower
pursuant to the MOA;
(B) make part of the Loan available to the Borrower for the purpose of
financing (in part) the refurbishment of the Vessel pursuant to the
Refurbishment Contracts;
(C) (in lieu of an advance pursuant to (B)) issue a Refurbishment
Guarantee for an amount equivalent to an advance pursuant to (B); and
(D) (when obliged to make payment under any Refurbishment Guarantee or on
the Termination Date, whichever is the earlier) advance the sum which
would (but for that Refurbishment Guarantee) have been advanced
pursuant to (B) for the purpose of reducing or providing cash
collateral for (as the case may be) the Refurbishment Guarantee
Amount.
3. AVAILABILITY
3.1 On and as from the date hereof the Borrower shall be entitled to draw
upon the Loan and to require the Lender to issue Refurbishment Guarantees
provided always that: -
(A) all items specified in schedule A hereto have been received by the
Lender and are in form and substance satisfactory to the Lender;
(B) no Event of Default and no event which with the giving of notice
and/or lapse of time would constitute an Event of Default has
occurred;
(C) not less than three (3) Business Days prior to the date upon which the
Borrower requires to draw upon the Loan and/or requires the Lender to
issue a Refurbishment Guarantee the Lender has received a written
utilization notice from the Borrower in the form set out in Appendix I
hereto, but no such notice shall be required in respect of any Drawing
for the purpose specified in clause 2.1(D) hereof which the Lender
shall be entitled to make in any event when obliged to make payment
under any Refurbishment Guarantee or on the Termination Date,
whichever is the earlier;
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(D) all items specified in schedule B hereto have been received by the
Lender in respect of the requirement specified in the said notice and
are in form and substance satisfactory to the Lender;
(E) no Drawing shall be made other than for one of the purposes specified
in clauses 2.1(A), (B) and (D) hereof; the maximum aggregate amount
which may be drawn for the purpose specified in clause 2.1(A) is
USD4,500,000; the maximum aggregate amount which may be drawn for the
purposes specified in clauses 2.1(B) and (D) hereof is USD9,750,000;
and the maximum aggregate amount which may be drawn for the purpose
specified in clause 2.1(B) hereof is USD9,750,000 less (i) the
Refurbishment Guarantee Amount from time to time, and (ii) the
aggregate amount of any sums due to the Lender under clause 8.5 hereof
from time to time;
(F) no Drawing shall increase the Loan to a sum which, when aggregated
with (i) the Refurbishment Guarantee Amount and (ii) any sums due to
the Lender under clause 8.5 hereof, exceeds the Maximum Sum;
(G) the first Drawing shall be for the purpose specified in clause 2.1(A)
hereof shall amount to USD4,500,000 and shall be made no later than 30
June 1999;
(H) up to seven (7) Drawings shall be permitted in aggregate for the
purposes specified in clauses 2.1(B) and (D) hereof, but no such
Drawings may be made prior to the making of the first Drawing or later
than the Termination Date;
(I) if any Drawing for the purpose specified in clause 2.1(D) hereof or
any cash collateral produced thereby (as the case may be) is
insufficient to pay all sums which the Lender is called upon to pay
under the relevant Refurbishment Guarantee, the Borrower shall
forthwith on the Lender's demand pay to the Lender the amount of the
insufficiency in accordance with clause 8.5(A) hereof;
(J) any cash collateral produced by a Drawing for the purpose specified in
clause 2.1(D) hereof shall be held by the Lender on an interest
bearing deposit account in the name of the Borrower pledged to the
Lender and applied in or towards satisfaction of the Refurbishment
Guarantee Amount as and when the Lender is obliged to pay the same;
(K) the Lender shall not be obliged to issue any Refurbishment Guarantee
unless and until the Lender has approved the terms and conditions
thereof; and
(L) no Refurbishment Guarantee shall be issued after 31 July 1999.
3.2 The Lender may in its absolute discretion allow any Drawing to be made or
issue any Refurbishment Guarantee notwithstanding that it has not received
all the items specified in schedule A hereto or all the items specified in
the relevant section of schedule B hereto and in this event the Borrower
hereby covenants to procure the delivery of all the missing items to the
Lender within thirty (30) days after the Drawdown Date of the relevant
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Drawing or the date of issue of the relevant Refurbishment Guarantee (as
the case may be).
4. INTEREST
4.1 Subject to clauses 4.2 and 6.2 hereof, the Borrower shall pay interest on
the Loan from the Drawdown Date of the first Drawing in an overall amount
equivalent to the difference between (A) the aggregate amount of the Loan
outstanding on the Termination Date and (B) the aggregate amount of all
Repayment Instalments due to be paid by the Borrower under clause 5.1
hereof.
4.2 In the event of default by the Borrower in the payment of any sum
whatsoever due to the Lender under this agreement (including interest) the
Borrower shall pay interest on that sum from the due date until payment
(after as well as before judgement) at a rate certified conclusively (save
for manifest error) by the Lender to be three percent (3%) per annum over
the cost to the Lender of funding that sum for such periods as the Lender
in its absolute discretion may think fit on the Business Day succeeding
that on which it became aware of the default and for so long as that sum
remains unpaid that rate shall be re-calculated on the same basis. Such
interest shall accrue and be payable on each day elapsing, shall be
calculated on the basis of a year of three hundred and sixty (360) days and
shall be paid on the demand of the Lender. In default of payment such
interest shall be compounded.
5. REPAYMENT
5.1 Subject to clauses 6 and 11.1 hereof the Borrower shall repay the Loan,
together with interest thereon in one hundred and eight (108) instalments
each amounting to one hundred and eighty four thousand United States
Dollars (USD184,000). The first such installment shall be paid on 15
October 1999 and the subsequent instalments shall be paid at one (1)
monthly intervals thereafter.
6. COMPULSORY AND VOLUNTARY PREPAYMENT
6.1 If for any reason whatsoever beyond the control of the Lender it shall
become unlawful or impossible for the Lender to maintain or give effect to
all or part of its obligations as contemplated by this agreement the
obligation of the Lender to make the Loan available to the Borrower shall
cease and the Borrower shall forthwith upon the demand of the Lender repay
the Loan (or such part thereof as the Lender shall specify in writing)
together with interest accrued thereon and any sums due to the Lender by
virtue of that repayment under clause 8.6 hereof.
6.2 If the Lender shall determine in good faith that it would not be
practicable or possible for the Lender to fund or continue to fund the Loan
or any relevant part thereof in the London Inter-Bank Market, then the
Lender shall inform the Borrower in writing to that effect and unless the
Lender and the Borrower shall agree acceptable alterations to the terms of
this agreement (on the basis of an alternative source of funds available to
the Lender) the obligation of the Lender to make the Loan or relevant part
thereof available to the Borrower shall cease and the Borrower shall be
obliged on receiving a written
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notice from the Lender to that effect to repay the Loan or the relevant
part thereof together with interest accrued thereon within thirty (30) days
thereafter.
6.3 From and after the Termination Date the Borrower may without penalty prepay
the whole or part of the Loan on the final day of any month. If all
Repayment Instalments due up to and including the date of the prepayment
have been duly paid, the amount of principal required to effect any
prepayment of the whole of the Loan on each such day is set out opposite
such day in the final column of schedule D hereto and in the case of any
part prepayment of the Loan the amount of principal paid shall be applied
in accordance with clause 6.3(D) hereof. Any such prepayment is also
subject to the following conditions: -
(A) the Borrower shall simultaneously pay to the Lender any sums due to
the Lender by virtue of that prepayment under clause 8.6 hereof;
(B) any part prepayment of the Loan shall amount to a whole multiple of
five hundred thousand United States Dollars (USD500,000);
(C) the Borrower shall have given the Lender not less than thirty (30)
days written notice of its intention to make such prepayment (which
once given shall be irrevocable) specifying such day and the amount of
intended prepayment and accompanied by such evidence as the Lender may
require that any governmental or other consents for such prepayment
have been obtained or will be forthcoming;
(D) any part prepayment shall be applied towards payment of the amount of
principal set out opposite the date of that prepayment in the final
column of schedule D hereto and the amount of each of the remaining
Repayment Instalments may be reduced by such sum (if any) as the
Lender may consider appropriate in its absolute discretion having
regard to the amount of interest thereafter accruing on the Loan, any
such reduction to be notified to the Borrower by the Lender in writing
as soon as practicable; and
(E) no sums prepaid hereunder may be reborrowed under this agreement.
7. COMMITMENT AND ARRANGEMENT FEES
7.1 Subject to clause 8 hereof, the Borrower shall not be obliged to pay any
commitment or arrangement fees in connection with this agreement.
8. INDEMNITY
8.1 If any change in law or regulation or in the interpretation thereof or if
compliance by the Lender with any direction request or requirement (whether
or not having the force of law) of any central bank or other authority
shall: -
(A) subject the Lender to any tax with respect to the Loan or any part
thereof and/or any Refurbishment Guarantee (other than tax on overall
net income);
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(B) change the basis of taxation to the Lender of payments of principal or
interest or any other payment due or to become due hereunder;
(C) impose or modify any reserve, liquidity or capital adequacy
requirements or require the making of any special deposits affecting
the Lender; or
(D) impose on the Lender any other condition affecting the Loan or any
part thereof and/or any Refurbishment Guarantee whether or not any
Drawing has been advanced and whether or not any Refurbishment
Guarantee has been issued
and the result is either to increase the cost to the Lender of making or
maintaining or committing to make the Loan or any part thereof and/or any
Refurbishment Guarantee or to reduce the amount of any payment received by
the Lender hereunder or to reduce the rate of return which the Lender would
have been able to obtain on its overall capital but for entering into
and/or performing this agreement and/or any Refurbishment Guarantee then
the Borrower shall forthwith upon demand by the Lender pay to the Lender
such amount as the Lender certifies to be necessary to indemnify the Lender
fully for such additional cost or reduction.
8.2 All costs and expenses whatsoever (save for legal fees in connection with
the negotiation, preparation and execution of this agreement and the
Subject Documents) incurred by the Lender in connection with any one or
more of this agreement, the Security Documents and any other documents
executed pursuant hereto or thereto (including without limitation the costs
of any physical inspections of the Vessel) shall be paid by the Borrower
forthwith upon demand by the Lender on a full indemnity basis whether or
not any Drawing is advanced and whether or not any Refurbishment Guarantee
is issued.
8.3 The Borrower shall pay forthwith upon demand by the Lender all stamp,
registration and other duties (including any such duties payable by the
Lender) imposed by any authority in respect of any one or more of this
agreement, the Security Documents and any other documents executed pursuant
hereto or thereto or otherwise in connection with the Loan and/or any
Refurbishment Guarantee.
8.4 Without prejudice to the rights of the Lender under or pursuant to clause
11 hereof the Borrower shall indemnify the Lender fully forthwith upon
demand by the Lender for any and all losses damages and/or expenses
whatsoever incurred by the Lender: -
(A) as a result of any Drawing not being advanced for any reason
whatsoever (other than default by the Lender and other than in respect
of the purpose specified in clause 2.1(D) hereof) in accordance with a
notice given pursuant to clause 3.1(C) hereof;
(B) as a result of an Event of Default;
(C) in perfecting, protecting the value of or enforcing any of its rights
or securities under any one or more of this agreement, the Security
Documents and any other documents executed pursuant hereto or thereto
or in attempting so to do; or
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(D) as a result of any payment hereunder, whether pursuant to a judgment
or otherwise, being made, obtained or enforced in a currency other
than United States Dollars.
8.5 In consideration of the Lender agreeing to issue the Refurbishment
Guarantees at the request of the Borrower, the Borrower hereby covenants
with the Lender: -
(A) to pay to the Lender upon the Lender's written demand each and every
amount which the Lender is called upon to pay to the Yard or the
Interior Converter pursuant to any Refurbishment Guarantee whether or
not such amount shall actually have been paid by the Lender thereunder
unless such amount shall forthwith be satisfied by a Drawing made for
the purpose specified in clause 2.1(D) hereof in accordance with
clause 3.1 hereof (or by cash collateral produced by such a Drawing
and/or produced pursuant to clause 8.5(C) hereof);
(B) hold the Lender harmless and indemnify the Lender and keep the Lender
indemnified upon the Lender's written demand from time to time and in
whatever currency or currencies the Lender shall specify against all
actions, proceedings, liabilities, costs, claims, demands and
expenses, losses or damages whatsoever and whensoever incurred or
sustained by the Lender under or in relation to any Refurbishment
Guarantee; and
(C) (if at any time the Lender shall determine in its absolute discretion
that the Refurbishment Guarantee Amount exceeds the amount available
for Drawings for the purpose specified in clause 2.1(D) hereof) to pay
to the Lender upon the Lender's written demand the whole of the
excess, which amount shall be held by the Lender on an interest
bearing deposit account in the name of the Borrower pledged to the
Lender and applied by the Lender in or towards satisfaction of any and
all sums due and payable under clauses 8.5(A) and/or (B) hereof on the
due dates for payment thereof, the balance of that amount (if any)
being returnable to the Borrower if and when all the Borrower's actual
and contingent liabilities under clauses 8.5(A) and/or (B) hereof have
been fully discharged PROVIDED THAT nothing contained in this clause
8.5(C) shall be deemed to effect the absolute obligations of the
Borrower under clauses 8.5(A) and (B) hereof.
8.6 In the event that the whole or part of the Loan is repaid or prepaid
pursuant to clause 6, clause 10 or clause 11 hereof the Borrower shall
indemnify the Lender fully forthwith upon demand by the Lender for any and
all losses damages and/or expenses incurred by the Lender in liquidating or
re-employing fixed deposits acquired from third parties to maintain the
Loan or the relevant part thereof (as the case may be) until the
anticipated maturity date in respect thereof.
8.7 The indemnities contained in this clause 8 shall apply irrespective of any
indulgence granted to the Borrower or any other party from time to time and
shall continue in full force and effect notwithstanding any payment in
favour of the Lender and any amount due from the Borrower under this clause
8 will be due as a separate debt and shall not be affected by judgment
being obtained for any other sums due under any one or more of
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this agreement, the Security Documents and any other documents executed
pursuant hereto or thereto.
9. PAYMENTS
9.1 All payments by the Borrower hereunder shall be made to the Lender's
account with such bank or banks as the Lender shall nominate from time to
time.
9.2 Subject to the sub-clauses of this clause 9.2 all payments by the Borrower
hereunder shall be made in full without set-off or counterclaim and free
and clear of and without deduction or withholding for or on account of any
tax of any jurisdiction.
(A) If the Borrower is required by law to make any deduction or
withholding from any payment hereunder for or on account of tax, it
shall do so and the sum due from the Borrower in respect of such
payment shall be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, the Lender receives
and retains (free of any liability in respect of any such deduction or
withholding) a net sum equal to the sum it would have received and
retained had no deduction or withholding been required to be made.
(B) If at any time the Borrower is required by law to make any deduction
or withholding from any sum, payable by it hereunder (or if thereafter
there is any change in the rates at which or the manner in which such
deductions or withholdings are calculated) the Borrower shall promptly
and fully notify the Lender accordingly.
(C) If the Borrower makes any payment hereunder in respect of which it is
required by law to make any deduction or withholding it shall pay the
full amount to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under
applicable law and shall deliver to the Lender within thirty (30) days
after they have made such payment to the applicable authority the
appropriate receipt or certificate issued by such authority or the
Borrower as the case may be evidencing the payment to such authority
of all amounts so required to be deducted or withheld from such
payment.
9.3 If any sum becomes due for payment hereunder on a day which is not a
Business Day the due date for payment shall be extended to the next
succeeding Business Day unless that next succeeding Business Day falls
within a fresh month in which event the due date for payment shall be
brought forward to the immediately preceding Business Day. In the event
that the due date for payment of any Repayment Instalment is so extended or
brought forward the due date for payment of the next following Repayment
Instalment shall not be affected thereby.
9.4 All payments hereunder shall be made in United States Dollars not later
than 11:00 a.m. (New York time) on the due dates therefor in such funds as
may be customary for the same day settlement of international banking
transactions in United States Dollars in New York City provided that
payments in respect of costs and expenses shall be made in the currencies
in which the same are incurred.
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9.5 The Lender shall open and maintain on its books a control account in the
name of the Borrower showing the advance of the Loan and the computation
and payment of interest and all other sums due hereunder. The Borrower's
obligations to repay the Loan and to pay interest thereon and to pay all
other sums due hereunder shall be evidenced by the entries from time to
time made in the control account opened and maintained under this clause
9.5 which entries will be conclusive and binding in the absence of manifest
error.
10. APPLICATION OF MONEYS
10.1 Subject to clause 10.2 hereof all moneys payable to the Lender under the
Insurance Assignment and any other moneys payable to the Lender under any
one or more of this agreement, the Security Documents and any other
documents executed pursuant hereto or thereto the application of which is
not specifically provided for by another clause hereof shall be paid to the
Lender's account with such bank or banks as the Lender may nominate from
time to time and shall be applied by the Lender as follows: -
(A) all moneys received from a Total Loss or sale of the Vessel shall be
applied as follows: -
(i) first in payment of any and all sums whatsoever due and payable
to the Lender hereunder (such sums to be paid in such order as
the Lender may in its sole discretion elect);
(ii) second in payment of Repayment Instalments in reverse order of
maturity and in payment of any sums due to the Lender by virtue
of that payment under clause 8.6 hereof; and
(iii) third in payment of any credit balance to the Borrower or to
whomsoever may be entitled thereto; and
(B) all moneys not covered by clause 10.1(A) hereof shall be applied as
follows: -
(i) first in accordance with clause 10.1(A)(i) hereof;
(ii) second (in respect only of moneys received by virtue of the
Insurance Assignment) in reimbursement to the Borrower for such
of the costs (if any) incurred by the Borrower in effecting the
repair of the damage in respect of which those moneys are
received as the Lender shall approve (such approval not to be
unreasonably withheld);
(iii) third in payment of Repayment Instalments in reverse order of
maturity and in payment of any sums due to the Lender by virtue
of that payment under clause 8.6 hereof; and
(iv) fourth in payment of any credit balance to the Borrower or to
whomsoever may be entitled thereto.
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10.2 From and after the giving of notice by the Lender to the Borrower pursuant
to clause 11.1 hereof all moneys whatsoever received or recovered by the
Lender under any one or more of this agreement, the Security Documents and
any other documents executed pursuant hereto or thereto shall be applied by
the Lender as follows:-
(A) first in payment in such order as the Lender may in its sole
discretion elect of any and all sums whatsoever due and payable to the
Lender hereunder (other than the sums (if any) declared by the Lender
to be immediately due and payable in respect of the Refurbishment
Guarantee Amount pursuant to clause 11.1 hereof), subject to any right
the Lender may have to delay any such application in order to maximise
its claim;
(B) second (unless the Refurbishment Guarantee Amount has been reduced to
nil) in payment to a deposit account in the name of the Lender of a
sum equal to the Refurbishment Guarantee Amount; and
(C) third in payment of any credit balance to the Borrower or to
whomsoever may be entitled thereto
PROVIDED THAT: -
(i) sums paid to the deposit account pursuant to clause 10.2(B)
hereof shall be held on deposit at such rates of interest as the
Lender shall determine in its absolute discretion and any
interest accruing thereon shall be credited to that deposit
account at such intervals as the Lender shall determine in its
absolute discretion;
(ii) sums paid to the deposit account pursuant to clause 10.2(B)
hereof and any interest accrued thereon shall be applied in
payment to the Yard and/or the Interior Converter of the sums
due under the relevant Refurbishment Guarantee(s) on the due
date(s) therefor in accordance with the relevant Refurbishment
Contract(s); and
(iii) nothing herein contained shall be deemed to affect the absolute
obligation of the Borrower to indemnify the Lender in accordance
with this agreement.
11. DEFAULT
11.1 The Lender may by notice in writing to the Borrower declare the Loan and
guarantee facility made available under this agreement to be cancelled and
the Loan to be immediately repayable with accrued interest thereon in
accordance with the figures set out in schedule D hereto but adjusted for
any prior Repayment Instalment which has not been duly paid (plus any sums
due to the Lender by virtue of that repayment under clause 8.6 hereof) and
(unless the Refurbishment Guarantee Amount has been reduced to nil) an
amount equal to the Refurbishment Guarantee Amount as certified by the
Lender (which certificate shall be conclusive save for manifest error) to
be immediately due and payable
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to the Lender and any security held by the Lender shall become immediately
enforceable if any of the following events occurs: -
(A) failure by the Borrower to pay within three (3) days after the due
date for payment thereof any sum whatsoever due for payment by it
under this agreement;
(B) any one or more of the Security Parties making default in the
observance or performance of any other obligation covenant or
undertaking contained in any one or more of this agreement, the
Security Documents and any other documents executed pursuant hereto or
thereto and (if the same is in the opinion of the Lender capable of
remedy) the continuation of that default unremedied for a period of
fifteen (15) days after receipt by such one or more of the Security
Parties of a written notice from the Lender requiring the same to be
remedied;
(C) any of the representations and warranties made or deemed to have been
made in any one or more of this agreement, the Security Documents and
any other documents executed pursuant hereto or thereto being
materially inaccurate or misleading when made or becoming materially
inaccurate or misleading at any time hereafter were the same to be
repeated in relation to the facts subsisting at that time (whether or
not any such repetition actually occurs);
(D) any event of default occurring under any one or more of the Security
Documents;
(E) the fulfilment of any one or more of the material obligations
covenants and undertakings contained in any one or more of this
agreement, the Security Documents and any other documents executed
pursuant hereto or thereto or the exercise of any of the rights vested
in the Lender hereunder or thereunder becoming either unlawful under
any applicable law or unauthorised by any authority having
jurisdiction or otherwise impossible;
(F) a bona fide petition being presented or an order being made or an
effective resolution being passed for the commencement of any
proceedings for the liquidation winding-up or re-organisation of any
one or more of the Security Parties except for the purpose of and
followed by an amalgamation or reconstruction the terms of which shall
have been previously approved in writing by the Lender;
(G) a distress or execution being levied or enforced upon any part of the
assets of the Borrower which in the Lender's opinion would have a
material adverse effect on any one or more of the Security Parties and
not being satisfied removed or discharged within fourteen (14) days;
(H) the holder of any Encumbrance taking possession of or a liquidator,
administrator, receiver, administrative receiver, trustee or similar
officer being appointed in respect of the whole or a substantial part
of the assets of the Borrower;
(I) any one or more of the Security Parties being unable or admitting its
inability to pay its or their lawful debts as they mature or convening
a meeting of or preparing
14
to enter into any arrangement or composition with or making a general
assignment for the benefit of its or their creditors or being
adjudicated bankrupt or insolvent;
(J) any other Borrowed Money of the Borrower becoming due or becoming
capable of being declared due prior to its stated date of maturity by
reason of default on the part of any one or more of the Security
Parties;
(K) any one or more of the Security Parties ceasing to carry on or
suspending or threatening to cease to carry on or to suspend its or
their business or a substantial part of the assets or business of the
Borrower being seized confiscated or expropriated;
(L) a Total Loss occurring and either (i) the Lender not being satisfied
at any time in its absolute discretion that the Total Loss is
adequately covered by insurance and that the relevant insurance
proceeds will be paid to the Lender or (ii) any insurance claim in
respect thereof being rejected by the underwriters at any time or
(iii) the Lender failing to receive the insurance proceeds in respect
thereof within one hundred and eighty (180) days thereafter;
(M) any one or more of the Subject Documents being repudiated or
terminated without the prior written consent of the Lender;
(N) a material adverse change occurring in the business, assets or
financial condition of any one or more of the Security Parties which
may reasonably be considered to affect its or their ability to comply
with all or any of its or their respective obligations under any one
or more of the Subject Documents; or
(O) any of the final conditions precedent specified in schedule C hereto
not being received by the Lender in form and substance satisfactory to
the Lender on or before the Termination Date.
12. SECURITY
12.1 As security for the Loan, interest thereon and all other sums due and to
become due hereunder the Borrower shall provide the Lender with the
following documents in form and substance satisfactory to the Lender: -
(A) duly registered first priority statutory mortgage over the Vessel and
a collateral deed of covenants duly executed by the Borrower;
(B) first priority assignment duly executed by the Borrower of all
insurances whatsoever in respect of the Vessel and loss of its
earnings and all compensation in respect of the requisition for title
or other compulsory acquisition of the Vessel (with the exception of
requisition hire);
(C) guarantee and indemnity duly executed by the Guarantor;
15
(D) first priority assignments duly executed by the Borrower of the
benefit of any and all Refund Guarantees;
(E) first priority Swedish law pledges over any and all accounts opened
pursuant to clauses 3.1(J) and/or 8.5(C) hereof duly executed by the
Borrower; and
(F) letter of subordination duly executed by the Manager subordinating its
interests under the Management Agreement to those of the Lender under
this agreement.
13. REPRESENTATIONS AND WARRANTIES
13.1 The Borrower hereby represents and warrants that: -
(A) each of the Security Parties is a duly incorporated company validly
existing and in good standing under the laws of its country of
incorporation and all the shares in the Borrower are beneficially
owned by the Guarantor;
(B) each of the Security Parties has full power and authority to execute
deliver and perform such of the Subject Documents to which it is a
party;
(C) each of the Security Parties has taken all necessary corporate or
other action required to authorise the execution delivery and
performance of such of the Subject Documents to which it is a party;
(D) all consents licences approvals or authorisations whatsoever required
to make the Subject Documents legal valid enforceable and admissible
in evidence have been obtained and are in full force and effect;
(E) from and after execution and delivery thereof each of the Subject
Documents will constitute legal valid and binding obligations of the
parties thereto (other than the Lender) enforceable in accordance with
its terms and will not contravene any applicable law or regulation or
any contractual constitutional or other restriction binding on any of
the parties thereto (other than the Lender);
(F) no material litigation or administrative proceedings of or before any
board of arbitration, Court or Governmental authority or agency is
pending or (to the Borrower's knowledge) threatened the result of
which would or might be to have a material adverse effect on the
business, assets or financial condition of any one or more of the
Security Parties;
(G) the copies of any of the Subject Documents delivered or to be
delivered to the Lender hereunder constitute the full agreement
between the parties thereto with respect to the subject matter thereof
and none of the parties thereto is in default thereunder;
(H) all financial information and other documentation submitted to the
Lender by or on behalf of the Borrower in connection herewith is
accurate and correct in all material respects and not misleading;
16
(I) each Security Party and its business and assets (including, without
limitation, all computer systems, all systems and equipment containing
embedded microchips (including leased systems and equipment) and any
other systems, equipment or parts of the business or assets whatsoever
of that Security Party whose proper functioning or operation is
capable of being affected by the incorrect processing, storing,
calculation or recognition of dates, together with all software and
data in connection with any of the foregoing) shall at all times after
30 June 1999 comply with the requirements of Year 2000 Conformity as
defined in "A DEFINITION OF YEAR 2000 CONFORMITY REQUIREMENTS" issued
by the British Standards Institution (BSI DISC PD2000-1:1998) or such
later reviewed, revised or amended version thereof as may be published
by the British Standards Institution from time to time (in which case
the later version shall be the relevant one for the purposes of this
clause); and
(J) no Event of Default has occurred or is continuing and no event which
with the giving of notice and/or lapse of time would constitute an
Event of Default has occurred or is continuing.
14. COVENANTS
14.1 The Borrower hereby covenants that from the date hereof until the
Borrower has no remaining obligations, actual or contingent, under this
agreement: -
(A) the Borrower will file all requisite tax returns and will pay all tax
as shown to be due and payable on such returns or any of the
assessments made against it (other than those being contested in good
faith);
(B) the Borrower will carry on and conduct its business in a proper and
efficient manner and will duly pay all outgoings as and when they fall
due and in particular without limiting the generality of the foregoing
will duly observe and perform all the terms and conditions of any
contract of employment of the Vessel to be observed and performed by
it;
(C) the Borrower will prepare or cause to be prepared accounts at least
once in every period of 12 consecutive months and will furnish the
Lender with audited copies of those accounts no later than one hundred
and eighty (180) days after the end of each financial year; the first
such accounts shall relate to the period ending on 30 September 1999;
those accounts shall include profit and loss accounts, balance sheets
and cash flow analyses certified and audited by Xxxxx Xxxxxxxx or an
accountant of similar standing acceptable to the Lender;
(D) the Borrower shall promptly furnish to the Lender all such accounts
and financial information concerning any one or more of the Security
Parties and the Vessel as the Lender may from time to time reasonably
require including without limiting the generality of the foregoing
cash flow analyses and details of the operating costs of the Vessel;
17
(E) the Vessel and the Lender's interest as mortgagee thereof shall be
insured with such underwriters insurance offices and clubs for such
amounts for such risks in such form and upon such conditions as are
satisfactory to the Lender from time to time;
(F) the Borrower will not without the prior written consent of the
Lender: -
(i) create or allow to subsist any Encumbrance over any of its
assets or any part thereof save for Permitted Liens and those
created by any of the Security Documents;
(ii) incur any liability in respect of Borrowed Money except for
Borrowed Money not secured on the Vessel or any share therein
or its insurances and not having a higher value in terms of
right of payment than the Loan hereunder;
(iii) make loans or advances to others (except for loans or advances
made in the ordinary course of business in connection with the
chartering and/or operation and/or repair of the Vessel);
(iv) except in connection with the chartering and/or operation
and/or repair of the Vessel incur any other liability to a
third party which in the opinion of the Lender is of a
substantial nature;
(v) consolidate with any other company or merge into any company;
(vi) engage in any business other than the ownership operation
chartering and management of the Vessel;
(vii) guarantee endorse or otherwise become or remain liable in
respect of the obligations of any person firm or corporation;
(viii) pay any dividends or other distributions or issue any new
shares, or transfer any shares;
(ix) sell or otherwise dispose of the Vessel or any share therein
(the Lender's consent not to be unreasonably withheld);
(x) appoint any manager of the Vessel other than the Manager (the
Xxxxxx's consent not to be unreasonably withheld);
(xi) change the class, flag or management of the Vessel (the
Lender's consent not to be unreasonably withheld); or
(xii) make or allow any alteration to or waiver of the terms of any
one or more of the Subject Documents;
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(G) the Borrower will promptly inform the Lender if any Event of Default
or any event which with the giving of notice and/or lapse of time
would constitute an Event of Default occurs or if any event occurs
which may materially adversely affect its ability to perform any of
its obligations under any one or more of this agreement, the Security
Documents and any other documents executed pursuant hereto or thereto;
(H) the Borrower will permit the Lender or procure that the Lender be
permitted by surveyors or other persons appointed by it in that behalf
to board the Vessel both before any Drawdown Date and at all
reasonable times thereafter without in any way disturbing the
refurbishment of the Vessel for the purpose of inspecting and
reporting to the Lender on the refurbishment works being carried out
on the Vessel by the Yard and/or the Interior Converter under the
Refurbishment Contracts and the Borrower will afford or procure the
affording of all proper facilities for such inspections and send
copies of any periodic reports on the refurbishment works to the
Lender;
(I) the Borrower will take all steps within its power to ensure that the
Yard and the Interior Converter observe and perform all the conditions
and obligations imposed on them by the Refurbishment Contracts and
that the Yard and the Interior Converter proceed with the
refurbishment of the Vessel with due diligence and dispatch; and
(J) the Borrower will from time to time at the request of the Lender
execute and deliver to the Lender or procure the execution and
delivery to the Lender of all such documents as the Lender shall deem
desirable in its absolute discretion for giving full effect to this
agreement and for perfecting, protecting the value of or enforcing any
rights or securities granted to the Lender under any one or more of
this agreement, the Security Documents and any other documents
executed pursuant hereto or thereto.
15. SET-OFF
15.1 The Lender is hereby authorised to combine any and all accounts held by the
Borrower with the Lender at any of the Lender's offices and to apply
(without any prior notice) any credit balance to which the Borrower is then
beneficially entitled on any such account (whether or not that credit
balance is then due to the Borrower) in or towards satisfaction of any sums
then due and payable by the Borrower hereunder. For that purpose the Lender
is hereby authorised to use all or part of that credit balance to buy such
other currency or currencies as may be required to enable it to effect that
application. The Lender shall not be obliged to exercise any of its rights
under this clause, which shall be without prejudice and in addition to any
right of set off, combination of accounts, lien or other rights to which it
at any time otherwise is entitled (whether by operation of law, contract or
otherwise).
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16. ASSIGNMENT AND PARTICIPATION
16.1 This agreement shall be binding upon and inure to the benefit of the
Lender and the Borrower and their respective successors and assigns.
16.2 The Borrower may not assign its rights or obligations hereunder without
the prior written consent of the Lender.
16.3 The Lender may at any time assign transfer or grant participations in all
or a proportion of its rights and obligations hereunder to any other bank
or financial institution and for this purpose: -
(A) the Lender shall be at liberty to disclose on a confidential basis to
any other bank or financial institution which has taken or may take
such an assignment transfer or participation all such information
concerning any one or more of the Security Parties, the Vessel and the
Subject Documents as the Lender deems appropriate; and
(B) the Borrower shall upon demand by and at the expense of the Lender
execute all such documents and do all such acts and things as may be
necessary to give effect to any such assignment transfer or
participation.
17. MISCELLANEOUS
17.1 Time shall be of the essence of this agreement but no failure or delay on
the part of the Lender to exercise any power or right hereunder shall
operate as a waiver of such power or right nor shall any single or partial
exercise of any power or right hereunder preclude any other or further
exercise thereof or the exercise of any other power or right hereunder. The
powers and rights provided to the Lender in this agreement are cumulative
and shall not exclude any powers or rights provided to the Lender by law.
17.2 In the event of any of the provisions contained in any one or more of this
agreement, the Security Documents and any other documents executed pursuant
hereto or thereto being invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the remaining
provisions herein or therein contained shall not in any way be affected or
impaired thereby.
17.3 The Lender shall not be liable for any failure to meet its obligations
hereunder resulting from any cause whatsoever beyond its control.
18. NOTICES
18.1 Any notice or other correspondence in connection herewith required to be
sent or given by the Borrower to the Lender shall be sent to the Lender in
the English language at Ostra Xxxxxxxxx 00, XX-000 00 Xxxxxxxxxx, Xxxxxx
(telex no. 12399 (NBBANK S) facsimile no. x00 00 000 0000) or to such other
address or addresses as may from time to time be notified by the Lender to
the Borrower in writing for such purpose and shall be deemed to
20
have been validly given and received on the date of dispatch if sent by
telex and five (5) days after having been posted if sent by prepaid first
class or airmail post.
18.2 Any notice or other correspondence in connection herewith required to be
sent or given by the Lender to the Borrower shall be sent to the Borrower
in the English language at c/o Commodore Holdings Limited, 0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000-X, Xxxxxxxxx, X0 00000, X.X.X., Attention Chief
Financial Officer (facsimile no. + 000 000 0000) with copies to Xxxxxxxx X
Xxxxxxx, P.A., Xxxxx and Xxxxxx, Miami Center - Suite 3000, 000 X. Xxxxxxxx
Xxxxxxxxx, Xxxxx, X0 00000, U.S.A. (facsimile no. + 000 000 0000) or to
such other address or addresses as the Borrower may from time to time
notify to the Lender in writing and shall be deemed to have been validly
given and received on the date of dispatch if sent by telex and five (5)
days after having been posted if sent by prepaid first class or airmail
post.
19. PROPER LAW AND JURISDICTION
19.1 This agreement shall be governed by and construed in accordance with the
Laws of England and for the exclusive benefit of the Lender the Borrower
hereby irrevocably submits to the jurisdiction of the High Courts of
Justice in England. Such submission shall not limit the right of the Lender
to commence any proceedings relating to this agreement (in addition or
alternatively) in any other jurisdiction which the Lender deems fit. The
Borrower hereby irrevocably authorises and appoints Consult Marine, 00
Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxxxx X0 0XX as its agent in
England for the acceptance of service of legal proceedings on it hereunder.
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