CREDIT FACILITY AGREEMENT
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Exhibit
10.7
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as
Owner
DEUTSCHE
BANK AG, LONDON BRANCH
as
Bookrunner and Joint Mandated Lead Arranger
DEXIA
CRÉDIT LOCAL, NEW YORK BRANCH
as
Joint Mandated Lead Arranger
VARIOUS
FINANCIAL INSTITUTIONS
as
Lenders
DEUTSCHE
BANK AG, LONDON BRANCH
and
DEXIA
CRÉDIT LOCAL, NEW YORK BRANCH
as
Swap Banks
DEUTSCHE
BANK LUXEMBOURG S.A.
as
Facility Agent
and
DEUTSCHE
BANK AG FILIALE DEUTSCHLANDGESCHÄFT
as
Security Trustee
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XXXXX
& XXXXX LLP
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| Clause | Page | |||
| 1. | Interpretation |
1
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| 2. | Facilities |
29
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| 3. |
Conditions
Precedent
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30
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| 4. |
Utilisation
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31
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| 5. |
Repayment
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35
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| 6. |
Prepayment
and Cancellation
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35
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| 7. | Interest |
40
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| 8. | Terms |
41
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9.
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Market
Disruption
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42
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10.
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Taxes
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43
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11.
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Increased
Costs
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45
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12.
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Accounts
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46
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13.
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Payments
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52
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14.
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Representations
and Warranties
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54
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15.
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Information
Covenants
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61
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16.
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General
Covenants
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66
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17.
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Insurances
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80
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18.
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Default
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85
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19.
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Security
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90
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20.
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The
Administrative Parties
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91
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21.
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Evidence
and Calculations
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96
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22.
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Fees
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96
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23.
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Indemnities
and Break Costs
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97
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24.
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Expenses
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100
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25.
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Waiver
of Consequential Damages
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101
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26.
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Amendments
and Waivers
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101
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27.
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Changes
to the Parties
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103
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28.
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Disclosure
of Information
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105
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29.
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Set-Off
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106
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30.
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Pro
Rata Sharing
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106
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31.
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Severability
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107
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| 32. | Counterparts |
107
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33.
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Notices
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107
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34.
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Language
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109
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35.
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Governing
Law
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109
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36.
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Enforcement
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109
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| Schedule | Page | |||
| 1. | Original Lenders | 111 | ||
| 2. | Conditions Precedent | 112 | ||
| Part 1 Incidentail Costs Loan | 112 | |||
| Part 2 Instalment Loan 1 | 115 | |||
| Part 3 Instalment Loan 2 | 116 | |||
| Part 4 Instalment Loan 3 | 117 | |||
| Part 5 Delivery Loan | 118 | |||
| Part 6 Incidental Vessel Costs Loan | 121 | |||
| 3. | Form of Request | 122 | ||
| 4. | Form of Transfer Certificate | 124 | ||
| 5. | Loan Repayment Schedule | 126 | ||
| 6. | Calculation Certificate | 127 | ||
| 7. | Incidental Vessel Costs | 128 | ||
| 8. | Calculation of the Mandatory Cost | 129 | ||
Appendix
| 1. | Form of Delivery General Assignment | 131 | ||
| 2. |
Form
of Mortgage
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132 | ||
| 3. | Form of Charter Assignment | 133 | ||
| 4. | Form of Swap Agreement Assignment | 134 | ||
| 5. | Form of DPP | 135 | ||
| 6. | Form of General Assignment | 136 | ||
| 7. | Form of Share Charge | 137 | ||
| 8. | Form of Accounts Charge Agreement | 138 | ||
| 9. | Form of Equity Account Charge | 139 | ||
| 10. | Form of Management Agreement Assignment | 140 | ||
| 11. | Form of Floating Charge | 141 | ||
| 12. |
Approved
Budget
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142 | ||
| Signatories | 143 | |||
THIS AGREEMENT is dated 18
July 2008
BETWEEN:
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(1)
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DRILLSHIP KITHIRA OWNERS
INC. a corporation incorporated in the Xxxxxxxx Islands with
registered address at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Xxxxxxxx Xxxxxxx XX 00000 as borrower (the Owner);
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(2)
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DEUTSCHE BANK AG, LONDON BRANCH
as bookrunner and joint mandated lead arranger and bookrunner (in
this capacity the Bookrunner and Joint Mandated
Lead Arranger);
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(3)
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DEXIA CRÉDIT LOCAL, NEW YORK
BRANCH as joint mandated lead arranger (in this capacity the Joint Mandated Lead
Arranger);
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(4)
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THE FINANCIAL INSTITUTIONS
listed in Schedule 1 (Original Lenders) as original lenders (the
Original
Lenders);
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(5)
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DEUTSCHE BANK AG, LONDON BRANCH
as swap bank (in this capacity a Swap
Bank);
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(6)
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DEXIA CRÉDIT LOCAL, NEW YORK
BRANCH as swap bank (in this capacity a Swap
Bank);
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(7)
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DEUTSCHE BANK LUXEMBOURG
S.A. as facility agent (in this capacity the Facility Agent);
and
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(8)
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DEUTSCHE BANK AG FILIALE
DEUTSCHLANDGESCHÄFT as security trustee (in this capacity the Security
Trustee).
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IT IS AGREED as
follows:
1. INTERPRETATION
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1.1
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Definitions
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In this
Agreement:
Account Bank means Deutsche
Bank AG (acting through its London branch) or any other bank or financial
institution which replaces the Account Bank in accordance with clause 13 of the
DPP.
Account Bank Mandate means, in
relation to any Account (other than the Equity Account), the resolutions,
instructions and signature authorities relating to such Accounts as will be
agreed by the Account Bank, the Owner and the Security Trustee on or prior to
the Utilisation Date for the Incidental Costs Loan.
Accounts means together the
Debt Service Reserve Account, the Proceeds Account, the Debt Service Account,
the CAPEX Account, the Equity Account and the Operating Expenses
Account.
Accounts Charge Agreement
means the charge document in the form attached at Appendix 8 (Form of
Accounts Charge Agreement) entered into or to be entered into on or prior to the
Utilisation Date for the Incidental Costs Loan by the Owner in favour of the
Security Trustee in respect of the Accounts (other than the Equity
Account).
Act means the Law of Property
Xxx 0000.
1
Administrative Party means the
Facility Agent or the Security Trustee.
Affiliate means a Subsidiary
or a Holding Company of a person or any other Subsidiary of that Holding
Company.
Agreement means this credit
facility agreement, including any schedules or appendices hereto, as amended
from time to time.
Annual Budget means a budget
itemising:
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(a)
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during
the Pre-Completion Period, the Contract Price, the Incidental Costs, any
other costs approved by the Lenders and any other costs and expenses
incurred or to be incurred in relation to the construction of the Vessel
and containing sufficient information and details to enable the Equity
Collateral to be calculated; and
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(b)
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during
the Post-Completion Period:
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(i)
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the
anticipated Earnings;
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(ii)
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the
anticipated Operating Expenses; and
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(iii)
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the
anticipated CAPEX Expenses,
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in each
case of the Owner for a financial year of the Owner agreed by the board of
directors of the Owner (based on the good faith estimates of the officers of the
Owner and the Manager) and approved by the Facility Agent in accordance with
Clause 15.3 (Annual Budget and reports).
Applicable Law means any or
all applicable law (whether civil, criminal or administrative), common law,
statute, statutory instrument, treaty, convention, regulation, directive,
by-law, demand, decree, ordinance, injunction, resolution, order, judgment,
rule, permit, licence or restriction (in each case having the force of law) and
codes of practice or conduct, circulars and guidance notes generally accepted
and applied by the global off-shore oil-rig industry, in each case of any
government, quasi-government, supranational, federal, state or local government,
statutory or regulatory body, court, agency or association relating to all laws,
rules, directives and regulations, national or international, public or private
in any applicable jurisdiction from time to time.
Applicable Margin means, in
respect of the KEXIM Loans or, as the case may be, the Commercial
Loans:
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(a)
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during
the Pre-Completion Period, the Pre-Completion Margin;
or
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(b)
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during
the Post-Completion Period, the Post-Completion
Margin,
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as the
case may be.
Approved Brokers means X.X.
Xxxxxx Offshore, ODS Petrodata, H. Clarksons & Co Ltd. and Fearnley Offshore
AS, or such other brokers as may be approved by the Facility Agent and the Owner
in writing.
Approved Budget means an
Annual Budget approved by the Facility Agent in accordance with Clause 15.3
(Annual Budget and reports), the first such Annual Budget (covering the
Pre-Completion Period) being attached as Appendix 12.
2
Approved Incidental Vessel
Costs means the costs of any of the types set out in Schedule 7 up to the
amounts for such costs specified in the budget for the project of constructing
the Vessel approved by the Facility Agent.
Availability Period
means:
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(a)
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for
the Incidental Costs Loan, the Incidental Costs Loan Availability
Period;
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(b)
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for
the Instalment Loan 1, the Instalment Loan 1 Availability
Period;
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(c)
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for
the Instalment Loan 2, the Instalment Loan 2 Availability
Period;
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(d)
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for
the Instalment Loan 3, the Instalment Loan 3 Availability
Period;
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(e)
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for
the Delivery Loan, the period from and including the Delivery Date to and
including the earlier of:
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| (i) | the Final Completion Date; and |
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(ii)
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the
Longstop Date;
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(f)
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for
the Undrawn Amount Loan, the period from and including the date falling
ten (10) Business Days after the Final Completion Date to and including
the date falling thirty (30) Business Days after the Final Completion
Date; and
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(g)
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for
an Incidental Vessel Costs Loan, the period from and including the date of
this Agreement to and including the Final Completion
Date.
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Balancing Equity Contribution
means the amount (if positive) at that time equal to:
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(a)
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the
aggregate of all costs payable or reasonably expected to be payable by the
Owner to the Builder under the Shipbuilding Contract;
less
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(b)
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the
aggregate of the Expected Contract Price and any Balancing Equity
Contributions already paid by the Owner into the Proceeds Account in
accordance with Clause 12.2 (Proceeds
Account).
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Basel Accord means the accord
on minimum capital requirements for internationally active banks promulgated in
1988 by the Basel Committee on Banking Supervision as amended prior to the date
of this Agreement.
Basel II means the revision to
the Basel Accord as contemplated by the revised framework entitled
“International Convergence of Capital Measurement and Capital Standards: a
Revised Framework” published by the Basel Committee on Banking Supervision on 26
June 2004, as such revision may be implemented in the United Kingdom, the EEA
and the EU (including, for the avoidance of doubt, by way of changes to the EU
Capital Adequacy Directive).
Break Costs has the meaning
given to such term in Clause 23.4(b) (Break Costs) or, in respect of any
Swap Bank, Clause 23.4(d) (Break Costs).
3
Builder means Samsung Heavy
Industries Co., Ltd., a corporation incorporated in the Republic of Korea with
registered address at 34th Floor, Samsung Life Insurance Xxxxxx Xxxxx 0000-00,
Xxxxxx-Xxxx, Xxxxxx-Xx, Xxxxx, Xxxxx 137-857.
Business Day means a day
(other than a Saturday or a Sunday) on which banks are open for general business
in London, Luxembourg, Athens, Seoul, Oslo and New York.
Calculation Certificate means
the calculation certificate referred to in Clause 15.11 (Calculation
Certificate) in the form set out in Schedule 6 (Calculation
Certificate).
Calculation Period
means:
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(a)
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the
period from (and including) the Final Completion Date of the Vessel to
(and excluding) the first Repayment Date;
and
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(b)
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each
subsequent period from (and including) a Repayment Date to (and excluding)
the next Repayment Date or, as the case may be, the Final Maturity
Date.
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CAPEX Account means the bank
account opened in the name of the Owner with the Account Bank and designated
“Kithira CAPEX Account”.
CAPEX Expenses means capital
expenses incurred by the Owner in respect of the continued maintenance and
operation of the Vessel, including modifications required to be made to the
Vessel by the Classification Society or as required by Applicable
Law.
Charter Assignment means the security
agreement in the form attached at Appendix 3 (Form of Charter Assignment) dated
on or about the date of a Drilling Charter from the Owner to the Security
Trustee in respect of:
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(a)
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its
rights under that Drilling Charter;
and
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(b)
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its
rights under any applicable Charterer Parent
Guarantee.
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Charter Termination Event
means:
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(a)
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any
material breach by the Charterer of the terms of a Drilling Charter or, as
applicable, by the Charterer Parent of the terms of a Charter Parent
Guarantee which material breach is not cured by the date which falls 20
days after the date on which the Facility Agent gives written notice to
the Owner of the breach and such breach is not remedied, or otherwise
compensated for, in each case, to the satisfaction of the Majority Lenders
within such period or if the matter has been referred to arbitration
within that 20 day period, upon the earlier of a settlement being reached
in respect of such arbitration and 15 days after the receipt of the final
arbitration award; or
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(b)
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the
termination of a Drilling Charter by the Owner or the
Charterer.
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Charterer means any approved
charterer of the Vessel under and in accordance with Clause 16.22 (Charters) or
any replacement of such charterer in accordance with Clause 16.22(c)
(Charters).
Charterer Direct Agreement
means a direct agreement dated on or about the date of a Drilling Charter and to
be entered into between the Charterer, the Owner and the Security Trustee, in
each case in form and substance satisfactory to the Facility Agent (acting on
the instructions of the Majority Lenders).
Charterer Parent means any
person who as contemplated by Clause 16.22 (Charters) provides a guarantee to
the Owner in respect of a Charterer’s obligations under a Drilling
Charter.
Charterer Parent Guarantee
means a guarantee, if any, from the Charterer Parent in form and substance
satisfactory to the Facility Agent (acting on the instructions of the Majority
Lenders) in favour of the Owner in respect of the Charterer’s obligations under
a Drilling Charter.
Classification Society means
American Bureau of Shipping or such other classification society approved in
writing by the Facility Agent (acting on the instructions of the Majority
Lenders).
Commercial Lenders means the
lenders detailed in Schedule 1 as Commercial Lenders together with any New
Lenders in respect of a Commercial Loan.
Commercial Loan means that
portion of a Loan under the Facility (and identified as such in any Request)
advanced to the Owner by the Commercial Lenders.
4
Commitment means:
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(a)
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for
an Original Lender, the amount set opposite its name in Schedule 1
(Original Lenders) under the heading “Commitments” and the amount of any
other Commitment it acquires; and
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(b)
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for
any other Lender, the amount of any other Commitment it
acquires,
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to the
extent not cancelled, transferred or reduced under this Agreement.
Construction Insurances means
the construction insurances to be procured by the Builder under the terms of
Article XVII of the Shipbuilding Contract.
Contract Price means the lower
of:
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(a)
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the
Expected Contract Price; and
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(b)
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the
total amount actually paid to the Builder by or on behalf of the Owner
under the Shipbuilding Contract, as adjusted in accordance with the
provisions of the Shipbuilding
Contract.
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Date of Total Loss means, in
respect of the Vessel, the date of Total Loss of the Vessel which date shall be
deemed to have occurred:
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(a)
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in
the case of an actual total loss, on the actual date and at the time the
Vessel was lost or, if such date is not known, on the date on which the
Vessel was last reported;
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(b)
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in
the case of a constructive total loss, upon the date and at the time
notice of abandonment is given to the Insurers for the time being
(provided a claim for total loss is admitted by such Insurers) or, if such
Insurers do not forthwith admit such a claim, at the date and at the time
at which either a total loss is subsequently admitted by the Insurers or a
total loss is subsequently adjudged by a competent court of law or
arbitration tribunal to have
occurred;
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(c)
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in
the case of a compromised, agreed or arranged total loss, on the date upon
which a binding agreement as to such compromised, agreed or arranged total
loss has been entered into by the
Insurers;
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(d)
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in
the case of requisition for title or other compulsory acquisition, on the
date upon which the relevant requisition for title or other compulsory
acquisition occurs; or
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(e)
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in
the case of 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, government authority or any other person or
entity which deprives the Owner of the Vessel or, as the case may be, the
Charterer of the use of the Vessel for more than 60 days, upon the expiry
of the period of 60 days after the date upon which the relevant capture,
seizure, arrest, detention or confiscation
occurred.
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Debt Service Account means the
bank account opened in the name of the Owner with the Account Bank and
designated “Kithira Debt Service Account”.
5
Debt Service means, in
relation to any Calculation Period, an amount equal to the aggregate
of:
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(a)
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Financing
Costs accruing; and
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(b)
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Financing
Principal payable (other than as a result of a prepayment
obligation),
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in that
period less any amounts accruing for payment to the Owner in that period under a
Swap Agreement.
Debt Service Cover Ratio
means, on any Repayment Date, the ratio of Net Cash Flow to Debt Service for the
Calculation Period ending on that Repayment Date.
Debt Service Reserve Account
means the bank account in the name of the Owner with the Account Bank and
designated “Kithira Debt Service Reserve Account”.
Deed of Covenants means the
deed of covenants to be entered into between the Owner and the Security Trustee
collateral to the Mortgage.
Default means:
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(a)
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an
Event of Default; or
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(b)
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an
event or circumstance which would be (with the expiry of a grace period,
the giving of notice or the making of any determination under the Finance
Documents or any combination of them) an Event of
Default.
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Delivery Date means the date
of actual delivery of the Vessel to the Owner under the terms of the
Shipbuilding Contract.
Delivery General Assignment
means the assignment of the Requisition Compensation and the Obligatory
Insurances together with all benefits under the contracts, policies and entries
under the Obligatory Insurances and all claims in respect of them in
substantially the form of Appendix 1 (Form of Delivery General Assignment)
together with any and all notices and acknowledgements entered into in
connection therewith.
Delivery Loan means the Loan
to be advanced under this Agreement on the Final Completion Date in relation to
the final Instalment.
Deposit Bank means initially
Deutsche Bank AG, London Branch or, as the case may be, any other bank or
financial institution substituting or replacing it pursuant to Clause 12.11 of
this Agreement or, as the case may be, clause 3.3 of the DPP.
Distribution means the payment
by the Owner by way of any payment, repayment, redemption or dividend, capital
reduction, distribution or the like to any of its shareholders.
Dollars or US$ means the lawful currency
for the time being of the United States of America.
DPP means the deed of proceeds
and priorities in the form attached at Appendix 5 (Form of DPP) to be entered
into on or prior to the Incidental Costs Loan Utilisation
Date between (inter
alios) the Facility Agent, the Security Trustee, the Owner, the Sponsor
and the Swap Banks.
6
Drilling Charter has the
meaning given to it in Clause 16.22(a).
Drilling Charter Cut-off Date
means the earlier of 31 January 2010 and the Instalment Loan 2 Utilisation
Date.
Earnings means all present and
future moneys and claims which are earned by or become payable to or for the
account of the Owner in connection with the operation or ownership of the Vessel
and including but not limited to:
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(a)
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freights,
passage and hire moneys (howsoever earned), including, for the avoidance
of doubt, charterhire and charterhire performance bonuses payable under
any Drilling Charter;
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(b)
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Liquidated
Damages Payments;
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(c)
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remuneration
for salvage and towage services;
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(d)
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demurrage
and detention moneys;
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(e)
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all
moneys and claims in respect of the requisition for hire of the
Vessel;
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(f)
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payments
received in respect of off-hire insurance;
and
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(g)
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damages
for breach or payments for termination of a Drilling Charter or any other
contract for the employment of the
Vessel.
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Earnings Deposit Date shall
have the meaning given to that term in Clause 12.3 (Transfers to the Operating
Expenses Account).
Eksportfinans means
Eksportfinans ASA located at Xxxxxxxx 0000 Xxxx, 0000, Xxxx,
Xxxxxx.
Eksportfinans CIRR means 3.93
per cent. per annum.
Eksportfinans Lenders means
the lenders described in Schedule 1 as Eksportfinans Lenders together with any
New Lenders in respect of an Eksportfinans Loan.
Eksportfinans Loan means that
portion of a Loan under the Facility (and identified as such in any Request)
advanced to the Owner by the Eksportfinans Lenders.
Environment
means:
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(a)
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any
land including, without limitation, surface land and sub-surface strata,
sea bed or river bed under any water (as referred to below) and any
natural or man-made structures;
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(b)
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water
including, without limitation, coastal and inland waters, surface waters,
ground waters and water in drains and
sewers;
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7
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(c)
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air
including, without limitation, air within buildings and other natural or
man-made structures above or below ground;
and
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(d)
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flora,
fauna and ecological systems.
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Environmental Affiliate means
the Owner, the Sponsor and the Manager together with their respective officers,
directors and employees and, during the Post-Completion Period, all of those
persons for whom the Owner, the Sponsor or the Manager is responsible under any
Applicable Law in respect of any activities undertaken in relation to the
Vessel.
Environmental Approvals means
any permit, licence, approval, consent, certificate, registration, ruling,
variance, exemption or other authorisation required under applicable
Environmental Laws.
Environmental Claim means any
claim by any person or persons or any governmental, judicial or regulatory
authority which arises out of any breach, contravention or violation of (or
liability under) Environmental Law, the existence of any liability arising from
such breach, contravention or violation, or the presence of or Release of any
Hazardous Material. In this context, claim means: a claim for
damages, compensation, fines, penalties or any other payment of any kind whether
or not similar to the foregoing; an order or direction to take, or not to take,
certain action or to desist from or suspend certain action by any governmental,
judicial or regulatory authority; and any form of enforcement or regulatory
action, but shall exclude a frivolous or vexatious claim which is being
contested in good faith and with due diligence and which is discharged or struck
out within 14 days.
Environmental Laws means any
or all Applicable Law relating to or concerning:
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(a)
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pollution
or contamination of the Environment, including any remediation of any
pollution or contamination on the restoration or repair of any damage to
the Environment;
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(b)
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the
protection of the Environment and human health or safety or any living
organisms which inhabit the Environment or any ecological
system;
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(c)
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the
generation, manufacture, processing, distribution, use (including abuse),
treatment, storage, deposit, disposal, transport or handling of Hazardous
Materials;
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(d)
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the
Release or other form of transmission into the Environment of noise,
vibration, dust, fumes, gas, odours, smoke, steam, effluvia, heat, light,
radiation (of any kind), infection, electricity or any Hazardous Material
and any matter or thing capable of constituting a nuisance or an
actionable tort or breach of statutory duty of any kind in respect of such
matters; and
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(e)
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the
provision and maintenance of bonds, guarantees or other forms of financial
assurance required by any Governmental Entity in connection with
activities that could have an adverse effect on the
Environment.
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Equity Account means the bank
account opened in the name of the Owner with the Equity Account Bank and
designated “Kithira Equity Account” for the purposes of the holding of the
Equity Collateral.
8
Equity Account Bank means EFG
Eurobank Ergasias S.A. or any other bank or financial institution approved by
the Facility Agent (acting on the instructions of the Majority
Lenders).
Equity Account Charge means
the charge document in the form attached at Appendix 9 (Form of Equity Account
Charge) entered into or to be entered into on or prior to the Incidental Costs
Loan Utilisation Date by the Owner in favour of the Security Trustee in respect
of the Equity Account.
Equity Collateral means the
cash security paid or to be paid by the Owner, or, as the case may be, the
Sponsor pursuant to Clause 12.2(a)(iii).
Equity Contribution means in
respect of each Utilisation Date the amount required to be paid in respect of
Vessel Costs not funded by the Loan to be made on such date.
Event of Default means an
event or circumstance specified as such in Clause 18 (Default) of this
Agreement.
Excess Risks
means:
|
|
(a)
|
the
proportion of claims for general average, salvage and salvage charges
which are not recoverable as a result of the value at which the Vessel is
assessed for the purpose of such claims exceeding her hull and machinery
insured value; and
|
|
|
(b)
|
collision
liabilities not recoverable in full under the hull and machinery insurance
by reason of those liabilities exceeding such proportion of the insured
value of the Vessel as is covered by the hull and machinery
insurance.
|
Expected Contract Price means
US$691,462,966 being the expected amount as at the date of this Agreement
payable by the Owner to the Builder under and in accordance with the terms of
the Shipbuilding Contract.
Facility means the term loan
facility made available under this Agreement.
Facility Office means, in
respect of a Lender, the office through which that Lender will perform its
obligations under this Agreement from time to time subject to Clause 27.5 (Costs
resulting from change of Lender or Facility Office).
Fee Letter means any letter
entered into by reference to this Agreement between one or more Administrative
Parties, the Account Bank and/or the Mandated Lead Arranger and/or any Lender
and the Owner (or Affiliate of the Owner or the Sponsor) setting out the amount
of certain fees relating to the Facility.
Final Completion Date means
the later of:
|
|
(a)
|
the
date of actual delivery of the Vessel by the Owner to the Charterer under
the Drilling Charter and unconditional acceptance by the Charterer under
the terms thereof; and
|
|
|
(b)
|
the
date of confirmation to the Facility Agent from the Technical Adviser that
the Vessel’s design and performance fulfils the technical specifications
required under the Shipbuilding Contract and the Drilling
Charter.
|
9
|
|
Final Maturity Date
means 31 December, 2020.
|
Finance Document
means:
|
|
(a)
|
this
Agreement;
|
|
|
(b)
|
each
Security Document;
|
|
|
(c)
|
the
DPP;
|
|
|
(d)
|
the
GIEK Security Trustee Letter;
|
|
|
(e)
|
each
Swap Agreement;
|
|
|
(f)
|
each
Fee Letter;
|
|
|
(g)
|
each
Transfer Certificate;
|
|
|
(h)
|
the
Account Bank Mandate; and
|
|
|
(i)
|
any
other document designated as such by the Facility Agent and the
Owner.
|
Finance Party means a Lender,
a Swap Bank or an Administrative Party.
Financial Indebtedness means
any indebtedness for or in respect of:
|
|
(a)
|
moneys
borrowed;
|
|
|
(b)
|
any
amount raised by acceptance under any acceptance credit agreement
(including any dematerialised
equivalent);
|
|
|
(c)
|
any
amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or other similar
instrument;
|
|
|
(d)
|
any
redeemable preference share;
|
|
|
(e)
|
the
amount of any liability in respect of a lease or hire purchase contract
which would, in accordance with IFRS, be treated as a finance or capital
lease;
|
|
|
(f)
|
receivables
sold or discounted (otherwise than on a non-recourse
basis);
|
|
|
(g)
|
the
acquisition cost of any asset or service to the extent payable after its
acquisition or possession by the party liable where the advance or
deferred payment is arranged primarily as a method of raising finance or
of financing the acquisition of that asset or
service;
|
|
|
(h)
|
any
derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, except for non-payment of an amount, the then
xxxx to market value of the derivative transaction will be used to
calculate its amount);
|
10
|
|
(i)
|
any
amount raised under any other transaction (including any forward sale or
purchase agreement) which has the commercial effect of a borrowing other
than trade credits incurred in the ordinary course of business with credit
terms of no longer than 90 days;
|
|
|
(j)
|
any
counter-indemnity obligation in respect of any guarantee, indemnity, bond,
letter of credit or any other instrument issued by a bank or financial
institution; or
|
|
|
(k)
|
the
amount of any liability in respect of any guarantee, indemnity or similar
assurance against financial loss of any person in respect of any item
referred to in the above
paragraphs.
|
Financing Costs means any of
the following payable by the Owner:
|
|
(a)
|
interest,
fees and any other costs or expenses payable under the Finance
Documents;
|
|
|
(b)
|
any
Swap Costs; and
|
|
|
(c)
|
any
Tax in respect of any of the above.
|
Financing Principal means the
amount of principal payable by the Owner in respect of the Loans from time to
time.
Five Year Drilling Charter
means a Drilling Charter entered into in respect of the Vessel for a
minimum term (excluding any optional extensions) of five (5) years from the
Final Completion Date.
Fixed Rate means the fixed
rate of interest payable by the Owner to a Swap Bank under and in accordance
with the term, of a Swap Agreement.
Floating Charge means the
charge document in the form attached at Appendix 11 (Form of Floating Charge)
entered into or to be entered into on or prior to the Utilisation Date for the
Incidental Costs Loan by the Owner in favour of the Security Trustee over all
and any assets of the Owner.
Force Majeure Event means an
event of force majeure as defined in or contemplated by Article III of the
Shipbuilding Contract or any event of force majeure as defined or contemplated
by the Drilling Charter.
General Assignment means the
assignment of the Shipbuilding Contract, the Construction Insurances, the
Earnings and the Refund Guarantee, in the form attached at Appendix 6 (Form of
General Assignment) and entered into or to be entered into on or prior to the
Incidental Costs Loan Utilisation Date, granted by the Owner in favour of the
Security Trustee together with any and all notices and acknowledgements entered
into in connection therewith.
GIEK means Garanti Instituttet
for Eksportkreditt of Dronning Mauds, gate 15, X.X. Xxx 0000 Xxxx 0000, Xxxx,
Xxxxxx.
GIEK Conditions means “GIEK’s
Export Guarantees – General Conditions – Lenders Guarantee” and the conditions
set out in the GIEK Guarantee.
11
GIEK Guarantee means the
buyer’s credit guarantee, including the GIEK Conditions, to be issued by GIEK in
favour of the Eksportfinans Lenders covering the Eksportfinans
Loans.
GIEK Security Trustee Letter
means the letter in the form attached at schedule 4 to the DPP.
Government Entity means, in
respect of any country:
|
|
(a)
|
any
natural government, political subdivision thereof, or local jurisdiction
therein; and
|
|
|
(b)
|
any
instrumentality, board, commission, court or agency thereof, however
constituted.
|
Gross Revenue means, for any
Calculation Period, the aggregate Earnings received in such period in respect of
the Vessel.
Hazardous Material means any
element or substance, whether natural or artificial, and whether consisting of
gas, liquid, solid or vapour, whether on its own or in any combination with any
other element or substance or radiation, which is listed, identified, defined or
determined by any Environmental Law or other Applicable Law as hazardous,
harmful, a contamination or waste and/or capable of being or becoming harmful to
mankind or any living organism or damaging to the Environment, including,
without limitation, oil (as defined in the United States Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
the Oil Pollution Act of 1990, as amended).
Hedged Portion means, from
time to time, the principal amount of any outstanding Loans the interest on
which has been hedged by the Owner with a Swap Bank under and in accordance with
the terms of any Swap Agreement.
Holding Company means, in
relation to a company or corporation, any company or corporation of which it is
a Subsidiary.
IFRS means the International
Financial Reporting Standards issued by the board of the International
Accounting Standard Committee from time to time.
Incidental Costs means the
Incidental Vessel Costs and the Incidental Loan Costs.
Incidental Costs Loan means
the Loan, if any, to be advanced under the terms of this Agreement during the
Incidental Costs Loan Availability Period in relation to payment of Incidental
Loan Costs (other than interest and Commitment fees) and Incidental Vessel Costs
in the maximum principal amount specified in Clause 4.2(b).
Incidental Costs Loan Availability
Period means the period from and including the date of this Agreement to
and including the earlier of (i) the Delivery Date and (ii) the Longstop
Date.
Incidental Loan Costs
means:
|
|
(a)
|
each
of the fees referred to in Clause 22 (Fees) and payable under the terms of
the Fee Letters during the Pre-Completion
Period;
|
12
|
|
(b)
|
any
and all costs and expenses which are payable by the Owner to the Secured
Parties pursuant to Clause 24.1 (Initial costs) within a period of three
(3) months from the date of this Agreement;
and
|
|
|
(c)
|
interest
in the Pre-Completion Period calculated and payable in accordance with
Clause 7.1(a).
|
Incidental Vessel Costs means,
during the Pre-Completion Period:
|
|
(a)
|
reasonable
and properly incurred costs paid by the Owner in connection with the
Vessel in excess of the Contract Price, in respect of those items detailed
in Schedule 7 (Incidental Vessel Costs), for which supporting invoices or
receipts have been provided to the Security
Trustee;
|
|
|
(b)
|
the
Initial Debt Service Reserve Contribution;
and
|
|
|
(c)
|
any
interest accrued and payable to the Eksportfinans Lenders in respect of
the Eksportfinans Loans drawn under this
Facility.
|
Incidental Vessel Costs Loan
means any Loan to be advanced under the terms of this Agreement in
relation to Incidental Vessel Costs.
Increased Cost
means:
|
|
(a)
|
an
additional or increased cost;
|
|
|
(b)
|
a
reduction in the rate of return from a Facility or on a Finance Party’s
(or its Affiliate’s) overall capital;
or
|
|
|
(c)
|
a
reduction of an amount due and payable under any Finance
Document,
|
which is
incurred or suffered by a Finance Party or any of its Affiliates but only to the
extent attributable to that Finance Party having entered into any Finance
Document or funding or performing its obligations under any Finance
Document.
Initial Debt Service Reserve
Contribution means the payment to be made by the Owner or the Sponsor to
the Debt Service Reserve Account in accordance with Clause 12.8(a) (Payments to
the Debt Service Reserve Account prior to the Utilisation Date of the Delivery
Loan) of this Agreement.
Initial Equity Contribution
means US$99,150,000 to be contributed by the Sponsor to the Owner by way of
equity and to be paid to the Builder under the terms of the Shipbuilding
Contract on or prior to the Incidental Costs Loan Utilisation Date in
satisfaction of the Instalments referred to in Article II paragraphs
4(a)(i) to 4(a)(iii) inclusive of the Shipbuilding Contract.
Instalment means an amount due
and payable by the Owner under the terms of the Shipbuilding
Contract.
Instalment Loan has the
meaning given to it in Clause 4.1(c).
13
Instalment Loan 1 means the
first Instalment Loan, if any, to be advanced under the terms of this Agreement
during the Instalment Loan 1 Availability Period in relation to the Instalment
referred to in Article II paragraph 4(b) of the Shipbuilding
Contract.
Instalment Loan 2 means the
second Instalment Loan, if any, to be advanced under the terms of this Agreement
during the Instalment Loan 2 Availability Period in relation to the Instalment
referred to in Article II paragraph 4(c) of the Shipbuilding
Contract.
Instalment Loan 3 means the
third Instalment Loan, if any, to be advanced under the terms of this Agreement
during the Instalment Loan 3 Availability Period in relation to the Instalment
referred to in Article II paragraph 4(d) of the Shipbuilding
Contract.
Instalment Loan 1 Availability
Period means the period from and including the date of this Agreement to
and including the earlier of (i) the Delivery Date and (ii) the Longstop
Date.
Instalment Loan 2 Availability Period
means the period from but excluding the Utilisation Date of the
Instalment Loan 1 to and including the earlier of (i) the Delivery Date and (ii)
the Longstop Date.
Instalment Loan 3 Availability Period
means the period from but excluding the Utilisation Date of the
immediately preceding Loan (if any) to and including the earlier of (i) the
Delivery Date and (ii) the Longstop Date.
Insurers means the
underwriters or insurance companies with whom any Obligatory Insurances are
effected and the managers of any protection and indemnity or war risks
association in which the Vessel may at any time be entered.
Insurance Market Value means
the fair market value of the Vessel, being the average of valuations of the
Vessel obtained from the Approved Brokers with or without physical inspection of
the Vessel (as the Security Trustee may reasonably require) on the basis of a
sale for prompt delivery for cash at arm’s length on normal commercial terms as
between a willing buyer and a willing seller, on an “as is, where is” basis,
free of any existing charter or other contract of employment and or pool
arrangement.
ISM Code means the
International Safety Management Code (including the guidelines on its
implementation) adopted by the International Maritime Organization Assembly as
Resolutions A.741(18) and A.788(19), as the same may have been or may be amended
or supplemented from time to time. The terms “safety management
system”, “Safety Management Certificate”, “Document of Compliance” and “major
non-conformity” shall have the same meanings as are given to them in the ISM
Code.
ISPS Code means the
International Ship and Port Facility Security Code adopted by the International
Maritime Organization Assembly as the same may have been or may be amended or
supplemented from time to time.
KEXIM means the Export Import
Bank of Korea.
14
KEXIM Guarantee means the
guarantee agreement to be issued by KEXIM in favour of the KEXIM Lenders (other
than KEXIM) covering the KEXIM Loan (other than that portion advanced by KEXIM
itself).
KEXIM Lenders means the
lenders detailed in Schedule 1 as KEXIM Lenders together with any New Lenders in
respect of a KEXIM Loan.
KEXIM Loan means that portion
of a Loan under the Facility (and identified as such in any Request) advanced to
the Owner by the KEXIM Lenders.
Korea means the Republic of
Korea.
Lender means:
|
|
(a)
|
an
Original Lender; or
|
|
|
(b)
|
any
person which becomes a Party in accordance with Clause 27.2 (Assignments
and transfers by Lenders),
|
and Lenders means all of
them.
Leverage Ratio means, as at
any date of determination, the ratio of the latest Market Value of the Vessel
(plus the value attributed to any additional security provided pursuant to
Clause 16.33 (Leverage Ratio) as determined by the Facility Agent from time to
time) to the aggregate principal amount outstanding under the
Facility.
LIBOR means for a Term of any
Loan or overdue amount:
|
|
(a)
|
the
applicable Screen Rate; or
|
|
|
(b)
|
if
no Screen Rate is available for the relevant currency or for any Term of
that Loan or overdue amount, the arithmetic mean (rounded upward to four
decimal places) of the rates, as supplied to the Security Trustee at its
request, quoted by the Reference Banks to leading banks in the London
interbank market,
|
as of
11.00 a.m. on the second London Business Day before the start of the Term for
the offering of deposits in Dollars for a period comparable to that
Term.
Liquidated Damages Payment
means the amount of any liquidated damages payable to the Owner by the Builder
pursuant to Article III of the Shipbuilding Contract.
Loan means, unless otherwise
stated in this Agreement, the principal amount of each borrowing under this
Agreement or the principal amount outstanding of that borrowing.
London Business Day means a
day (other than a Saturday or a Sunday) on which banks are open for business in
London.
Longstop Date has the meaning
given to that term in Clause 6.2(d) (Mandatory prepayment).
15
Losses means each and every
liability, loss, charge, claim, demand, action, proceeding, damage, judgment,
order or other sanction, enforcement, penalty, fine, fee, commission, interest,
lien, salvage, general average, cost and expense of whatsoever nature suffered
or incurred by or imposed on any of the Finance Parties.
LTC Ratio means the ratio of
all of the Loans to the aggregate of all of the Loans and the Sponsor Equity, as
in the formula:
|
Σ
Loans
|
|||
|
Σ Loans +
Sponsor Equity
|
|||
Maiden Voyage Costs means any
costs of the Vessel incurred in respect of its maiden voyage from the place of
delivery under the Shipbuilding Contract to the first location provided for in a
Drilling Charter, including costs associated with positioning the Vessel for
delivery under such Drilling Charter.
Majority Lenders means
Lenders:
|
|
(a)
|
whose
share in the outstanding Loans and whose undrawn Commitments then
aggregate not less than 80% of the aggregate of all the outstanding Loans
and the undrawn Commitments of all the Lenders and who include at least
(but without limitation) one (1) Commercial Lender whose share in the
outstanding Loans and whose undrawn Commitments in connection with the
Loans then aggregate more than 1 % of the aggregate of all the outstanding
Loans and the undrawn Commitments of the Lenders;
or
|
|
|
(b)
|
if
there is no Loan then outstanding, whose undrawn Commitments then
aggregate not less than 80% of the Total Commitments and who include at
least (but without limitation) one (1) Commercial Lender whose undrawn
Commitments in connection with the Loans then aggregate more than 1 % of
the aggregate of all the undrawn Commitments of the Lenders;
or
|
| (c) |
if
there is no Loan then outstanding and the Total Commitments have been
reduced to zero, whose
Commitments aggregated not less than 80% of the Total Commitments
immediately before the reduction and who include at least (but without
limitation) one (1) Commercial Lender whose undrawn Commitments in
connection with the Loans aggregated more than 1 % of the aggregate of all
the outstanding Loans and the undrawn Commitments of the
Lenders,
|
PROVIDED
that for such purpose, and subject always to the further provisos below (i) each
Lender which has a separate participation in the Commercial Loans and/or the
Kexim Loans and/or the Eksportfinans Loans may vote its separate participation
in each of such class of Loans as if it were a separate Lender and (ii) each
Lender may split its vote in relation to each such separate participation in
such proportions, as it, in its absolute discretion, determines, as
if each such proportion were held by a separate Lender AND PROVIDED FURTHER THAT
the voting rights of the KEXIM Lenders shall be exercised by KEXIM as if all
such voting rights belonged to KEXIM.
16
Management Agreement means the
management agreement in form and substance satisfactory to the Facility Agent
(acting on the instructions of the Majority Lenders) to be entered into between
the Manager and the Owner prior to the Utilisation Date for the Instalment Loan
1 for the monitoring, organisation and supervision by the Manager in relation to
the project during the Pre-Completion Period and for the operation and servicing
of the Vessel during the Post-Completion Period.
Management Agreement
Assignment means the assignment of the Management Agreement in the form
attached at Appendix 10 (Form of Management Agreement Assignment) and to be
entered into on or prior to the Utilisation Date for the Instalment Loan 1,
granted by the Owner in favour of the Security Trustee together with any and all
notices and acknowledgments entered into in connection therewith.
Manager means Ocean Rig ASA
(whether acting alone or through Cardiff Marine Inc. as provider of certain
administrative services) or such other person in each case approved by the
Charterer from time to time and the Facility Agent (acting on the instructions
of the Majority Lenders).
Mandatory Cost means the
percentage rate per annum calculated by the Facility Agent under Schedule 8
(Calculation of the Mandatory Cost).
Mandatory Prepayment Event
means any of the events referred to in Clause 6 (Prepayment and Cancellation) as
a result of which the Owner is obliged to prepay any one or more of the Loans or
any Lender’s participation in the Loans.
Market Value means at any time
the aggregate of:
|
|
(a)
|
the
net present value of the expected Net Cash Flow to be derived from each
existing Drilling Charter as calculated by the Facility Agent in its sole
discretion on the basis of a discount rate of 6 per cent. per annum and
information then available to it and on the basis
that:
|
|
|
(i)
|
during
the first year of each Drilling Charter the Operating Expenses shall be
US$150,000 per day and utilization rate of 95 per cent. for the Vessel;
and
|
|
|
(ii)
|
thereafter
the Operating Expenses and the utilization rate of the Vessel shall be the
Operating Expenses actually incurred and utilization rate actually
achieved during the previous twelve month period of the relevant Drilling
Charter; and
|
|
|
(b)
|
the
forecasted fair market value of the Vessel derived from a valuation of the
Vessel obtained from one Approved Broker with or without physical
inspection of the Vessel (as the Security Trustee may reasonably require)
on the basis of a sale for prompt delivery for cash at arm’s length on
normal commercial terms as between a willing buyer and a willing seller,
on an “as is, where is” basis, as at the latest expiry date of the then
existing Drilling Charters.
|
Material Adverse Effect means
a material adverse effect on:
17
(a) the
ability of the Owner or the Sponsor to perform its obligations under the
Transaction Documents;
|
|
(b)
|
the
validity or enforceability of, or the effectiveness or ranking of any
Security Interest granted or purported to be granted pursuant to any
Finance Document; or
|
|
|
(c)
|
any
right or remedy of a Finance Party in respect of a Finance
Document.
|
Maximum Eksportfinans Loan
Amount means the lesser
of (a) 44.4 per cent. of the Total Commitments and
(b) US$250,000,000.
Maximum Facility Amount means
the lower of (i) US$562,500,000 and (ii) an amount equal to 70% of the Vessel
Cost.
Maximum Commercial Loan Amount
means the lesser of (a) 20.0 per cent. of the Total Commitments and (b)
US$112,500,000.
Maximum KEXIM Loan Amount
means the lesser of (a) 35.6 per cent. of the Total Commitments and (b)
US$200,000,000.
Xxxxx’x means Xxxxx’x Investor
Services Inc. and any successor thereto.
Mortgage means the first
preferred Maltese ship mortgage (and the Deed of Covenants collateral thereto)
to be given by the Owner in favour of the Security Trustee on or prior to the
Delivery Loan in the form attached at Appendix 2 (Form of
Mortgage).
Net Cash Flow means, for any
Calculation Period:
|
|
(a)
|
Gross
Revenues received; minus
|
|
|
(b)
|
Operating
Expenses and CAPEX Expenses
payable.
|
Obligatory Insurances means
all contracts and policies of insurance (other than the Contractor Insurances)
and all entries in clubs and/or associations which are from time to time
required to be effected and maintained in accordance with Clause 17.1 (Scope of
Obligatory Insurances) in respect of the Vessel.
OECD means the Organisation
for Economic Co-operation and Development.
Operating Expenses Account
means the bank account opened in the name of the Owner with the Account Bank and
designated “Kithira Operating Expenses Account”.
Operating Expenses means
expenses incurred by the Owner in connection with the transportation, operation,
employment, maintenance, repair, running and insurance of the Vessel, including
maintaining the ownership and legal fees, rentals, wages or fees which the Owner
may be required to pay pursuant to the Management Agreement, the cost of
maintaining Obligatory Insurances and other insurances maintained for the Vessel
and payment of Tax properly payable by the Owner.
18
Operational Software means, at
any time, any software which is then being used in connection with the
operation, navigation or maintenance of the Vessel.
Other Shipbuilding Contract
means the turn key building contract between the Builder and the Other
Owner dated 17th
September, 2007 pursuant to which the Builder agreed to build and deliver the
Other Vessel to the Other Owner.
Other Owner means Drillship
Hydra Owners Inc.
Other Vessel means the
drillship being constructed by the Builder for the Other Owner with Hull Number
1837.
Owner’s Shipbuilding Contract
Guarantee means the performance guarantee entered or to be entered into
in the form as set out in Exhibit 5 to the Shipbuilding Contract securing the
obligations of the Owner to the Builder under the Shipbuilding
Contract.
Parent means Kithira
Shareholders Inc., a corporation incorporated in the Xxxxxxxx Islands and the
sole shareholder of the Owner whose registered office is at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960.
Parent Shareholder means
Drillships Investment Inc., a corporation incorporated in the Xxxxxxxx Islands
and the sole shareholder of the Parent whose registered office is at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx
XX00000.
Party means a party to this
Agreement.
Permitted Liens means, in
respect of any of the Security Assets:
|
|
(a)
|
Security
Interests created by the Security
Documents;
|
|
|
(b)
|
liens
for unpaid crew’s wages including wages of the master and stevedores
employed by the Vessel, outstanding in the ordinary course of business for
not more than one month after the due date for
payment;
|
|
|
(c)
|
any
Security Interest constituted by or securing any netting or set-off
arrangement entered into in the normal course of the Owner’s banking
arrangements in respect of any bank accounts opened by it and which have
not been secured in favour of the Finance Parties pursuant to the Security
Documents;
|
|
|
(d)
|
liens
for salvage;
|
|
|
(e)
|
liens
for classification or scheduled dry-docking or for necessary repairs to
the Vessel whose aggregate cost does not exceed US$10,000,000 at any one
time in respect of the Vessel;
|
|
|
(f)
|
liens
for collision;
|
|
|
(g)
|
liens
for master’s disbursements incurred in the ordinary course of
business;
|
19
|
|
(h)
|
statutory
and common law liens of carriers, warehousemen, mechanics, suppliers,
materials men, repairers or other similar liens, including maritime liens,
in each case arising in the ordinary course of business, due and
outstanding for not more than one month whose aggregate value does not
exceed US$10,000,000; and
|
|
|
(i)
|
any
lien created or permitted to subsist with the prior written consent of the
Security Trustee (acting on instructions of the Majority
Lenders),
|
provided,
in the case of paragraphs (b) to (h) inclusive, that the amounts which give rise
to such liens are paid when due or within any of the time periods stated above
or within any applicable grace period or, if not paid when due, are being
disputed in good faith by appropriate proceedings (and for the payment of which
adequate reserves or security are at the relevant time maintained or provided or
for which indemnity or liability insurance cover for at least the full amount in
dispute (less any applicable deductible) has been obtained by the Owner from
underwriters or insurance companies that have been approved by the Facility
Agent, (acting on the instructions of the Majority Lenders)), provided further
that such proceedings, whether by payment of adequate security into Court or
otherwise, do not give rise to a material risk of the Vessel or any interest
therein being seized, sold, forfeited or otherwise lost or of criminal liability
on any Finance Party.
Post-Completion Eksportfinans
Interest Rate means the aggregate of the Eksportfinans CIRR and 1.61% per
annum (being the post-completion GIEK-premium).
Post-Completion Margin means
1.75 % per annum.
Post-Completion Period means
the period from and including the Final Completion Date until and including the
Final Maturity Date.
Potential Mandatory Prepayment
Event means any event which would be (with the expiry of a grace period,
the giving of notice or the making of any determination under the Finance
Documents or any combination of them) a Mandatory Prepayment Event.
Pre-Completion Eksportfinans Interest
Rate means the aggregate of the Eksportfinans CIRR and 1.86% (being the
pre-completion GIEK-premium).
Pre-Completion Margin means
2.00 % per annum.
Pre-Completion Period means
the period from and including the date on which the Incidental Costs Loan is
advanced under this Agreement to but excluding the Final Completion
Date.
Pre-Delivery Period means the
period from and including the date on which the Incidental Costs Loan is
advanced under this Agreement to but excluding the Delivery Date.
Primary Transfers has the
meaning given to that term in Clause 12.2(f) (Proceeds Account).
Proceeds Account means the
bank account in the name of the Owner with the Account Bank and designated
“Kithira Proceeds Account”.
Project Parties means each
of:
|
|
(a)
|
the
Owner and the Sponsor; and
|
20
|
|
(b)
|
from
time to time, any of the Builder, the Manager, any Charterer Parent and/or
Charterer (but only to the extent, in any such case, that the same has or
may in the future have, outstanding liabilities owing to the Owner, the
Sponsor or any Finance Party under any Finance Document or Related
Contract to which it is a party).
|
Pro Rata Share means, in
respect of a Lender:
|
|
(a)
|
for
the purpose of determining a Lender’s share in a utilisation of a
Facility, the proportion which its Commitment under that Facility bears to
all the Commitments under that Facility;
and
|
|
|
(b)
|
for
any other purpose on a particular
date:
|
|
|
(i)
|
the
proportion which a Lender’s share of the Loans (if any) bears to all the
Loans;
|
|
|
(ii)
|
if
there is no Loan outstanding on that date, the proportion which its
Commitment bears to the Total Commitments on that date;
or
|
|
|
(iii)
|
if
the Total Commitments have been cancelled otherwise, the proportion which
its Commitments bore to the Total Commitments immediately before being
cancelled.
|
Protocol of Delivery and
Acceptance has the meaning given to such term in the Shipbuilding
Contract.
Rate Fixing Day means the date
falling two London Business Days before the start of a Term for a Loan or such
other day as the Facility Agent determines is generally treated as the rate
fixing day by market practice in the relevant interbank market.
Receiver means an
administrative receiver, receiver and manager or receiver in each case appointed
under a Security Document.
Reference Banks means the
Facility Agent and any other bank or financial institution appointed as such for
the purpose of this Agreement by the Facility Agent in consultation with the
Owner in accordance with Clause 27.6 (Changes to the Reference
Banks).
Refund Guarantee means the
refund guarantee issued by the Refund Guarantor in favour of the
Owner.
Refund Guarantor means the
Export-Import Bank of Korea.
Related Contracts means any or
all of the following (as the context requires):
|
|
(a)
|
the
Refund Guarantee;
|
|
|
(b)
|
the
Shipbuilding Contract;
|
|
|
(c)
|
the
Other Shipbuilding Contract;
|
21
|
|
(d)
|
the
Obligatory Insurances;
|
|
|
(e)
|
each
Drilling Charter;
|
|
|
(f)
|
any
Charterer Parent Guarantee;
|
|
|
(g)
|
the
Management Agreement; and
|
|
|
(h)
|
the
Sister Shipbuilding Contract.
|
Release means an emission,
spill, release or discharge into the Environment, including any “release”
falling within the definition ascribed to such term pursuant to the United
States Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
Repayment Date means, subject
to the provisions of Clause 5 (Repayment), each of the 18 dates which fall at
semi-annual intervals as detailed in the Repayment Schedule, the first such date
falling six months after the Final Completion Date and the final such date
falling on the Final Maturity Date.
Repayment Instalment means
each scheduled instalment which is payable in accordance with the Repayment
Schedule.
Repayment Schedule means the
schedule of repayment dates as detailed in Schedule 5 (Loan Repayment Schedule),
to be replaced as required in accordance with Clause 5 (Repayment) and Clause
6.9(b) (Partial prepayment of Loans).
Repeating Representations
means at any time the representations and warranties which are then made
or deemed to be repeated under Clause 14.30 (Times for making
representations).
Request means a request made
by the Owner for a Loan, substantially in the form of Schedule 3 (Form of
Request).
Required DSRA Balance means at
any time the aggregate of:
|
|
(a)
|
(i)
|
until
the date falling immediately prior to the first anniversary of the
Utilisation Date in respect of the Delivery Loan, the amount available to
be transferred from the Proceeds Account pursuant to Clause 12.8 (Payments
to the Debt Service Reserve Account prior to the Utilisation Date of the
Delivery Loan) until such time as the balance thereof is the amount
referred to in (ii) below; and
|
|
|
(ii)
|
thereafter,
the aggregate amount required to pay the next scheduled principal and
interest instalment under this Agreement on or before the next Repayment
Date (with scheduled interest in respect of any Hedged Portion being
deemed to be payable at the applicable Fixed Rate);
and
|
|
|
(b)
|
the
amount from time to time deposited pursuant to Clause 16.33(b)(ii)
(Leverage Ratio).
|
Required Insurance Amount
means, on an agreed value basis, the higher of (a) 125 % of
the aggregate of the outstanding Loans and (b) the Insurance Market Value of the
Vessel.
22
Requisition Compensation means
all moneys or other compensation payable by reason of requisition for title to,
or other compulsory acquisition of, the Vessel including requisition for
hire.
Retention Period means each
period commencing, in the case of the first such period, on (and including) the
Final Completion Date and ending on (but excluding) the first Repayment Date, in
the case of each other such period, on (and including) a Repayment Date and
ending on (but excluding) the next Repayment Date or, in the case of the final
such period, the Final Maturity Date.
Required Prepayment Percentage
means the sum expressed as a percentage of the following formula
(provided that if such sum is a negative figure, the sum shall be construed as
zero):
(A x 0.6) -
B x 100
C
where:
|
|
A
|
is
the aggregate of B and C;
|
|
|
B
|
is
the amount of all of the Loans (as defined in the Sister Loan Agreement)
outstanding under the Sister Loan Agreement;
and
|
|
|
C
|
is
the amount of all of the Loans outstanding under this
Agreement.
|
S&P means Standard &
Poor’s Ratings Group and any successor thereto.
Scheduled Delivery Date means
31 July 2011.
Scheduled Instalment Amount means:
|
|
(a)
|
for
the Instalment payable on the Instalment Loan 1 Utilisation Date, the
lower of 15.45% of the Expected Contract Price and
US$106,789,466;
|
|
|
(b)
|
for
the Instalment payable on the Instalment Loan 2 Utilisation Date, the
lower of 15.05% of the Expected Contract Price and
US$104,040,750;
|
|
|
(c)
|
for
the Instalment payable on the Instalment Loan 3 Utilisation Date, the
lower of 15.05% of the Expected Contract Price and
US$104,040,750;
|
|
|
(d)
|
for
the Instalment payable on the Delivery Loan Utilisation Date, the lower of
40.125% of the Expected Contract Price and
US$277,442,000.
|
Screen Rate means the British
Bankers Association Interest Settlement Rate for the relevant currency and Term
displayed on the BBA Page LIBOR 01. If the relevant page is replaced or the
service ceases to be available, the Facility Agent may specify another page or
service displaying the appropriate rate after consultation with the Owner and
the Lenders.
Secured Liabilities means all
present and future obligations and liabilities (actual or contingent) of the
Owner, the Parent, the Parent Shareholder, the Sister Owner, the Sister Parent,
or the Sponsor
to the Secured Parties or any of them under or in connection with any Finance
Document or any Sister Finance Document.
23
Secured Party means a Finance
Party and any Sister Finance Party or GIEK.
Security Agreements
means:
|
|
(a)
|
the
Mortgage;
|
|
|
(b)
|
the
General Assignment;
|
|
|
(c)
|
the
Share Charge;
|
|
|
(d)
|
the
Sponsor Construction and Post-Delivery
Guarantee;
|
|
|
(e)
|
the
Swap Agreement Assignment;
|
|
|
(f)
|
the
Delivery General Assignment;
|
|
|
(g)
|
the
Accounts Charge Agreement;
|
|
|
(h)
|
the
Equity Account Charge;
|
|
|
(i)
|
the
Charter Assignment;
|
|
|
(j)
|
the
Charterer Direct Agreement;
|
|
|
(k)
|
the
Management Agreement Assignment;
|
|
|
(l)
|
the
Floating Charge; and
|
|
|
(m)
|
any
other document designated as such in writing by the Owner and the Facility
Agent.
|
Security Assets means any
asset which is the subject of a Security Interest created by a Security
Document.
Security Document
means:
|
|
(a)
|
each
Security Agreement; and
|
|
|
(b)
|
any
other document evidencing or creating security over any asset of the Owner
to secure any obligation of the Owner to the Finance Parties or any of
them under the Finance Documents.
|
Security Interest means any
mortgage, pledge, lien, charge, assignment, hypothecation or security interest
or any other agreement or arrangement having a similar effect.
Security Period means the
period beginning on the date of the relevant Security Document and ending on the
date on which all the Secured Liabilities have been unconditionally and
irrevocably paid, performed and discharged in full.
24
Share Charge means the charge
in respect of the issued share capital of each of the Owner, the Parent and the
Parent Shareholder in the form attached at Appendix 7 (Form of Share Charge)
entered into or to be entered into on or prior to the Incidental Costs Loan
Utilisation Date and granted by each of the Parent, the Parent Shareholder and
the Sponsor, respectively, in favour of the Security Trustee.
Shipbuilding Contract means
the turn key building contract between the Builder and the Owner dated as of 24
January 2008 (as may further be amended or supplemented from time to time)
pursuant to which the Builder agreed to build and deliver the Vessel to the
Owner.
Sister Drilling Charter has
the meaning given to the term “Drilling Charter” in the Sister Loan
Agreement.
Sister Event of Default has
the meaning given to the term “Event of Default” in the Sister Loan
Agreement.
Sister Finance Documents has
the meaning given to the term “Finance Documents” in the Sister Loan
Agreement.
Sister Finance Party has the
meaning given to the term “Finance Party” in the Sister Loan
Agreement.
Sister Five Year Drilling
Charter has the meaning given to the term “Five Year Drilling Charter” in
the Sister Loan Agreement.
Sister Loan Agreement means
the credit facility agreement entered into on or about the date hereof between
the Sister Owner, the Original Lenders as lenders, the Security Trustee as
security trustee and the Facility Agent as facility agent in respect of the
Sister Vessel.
Sister Owner means Drillship
Skopelos Owners Inc., a company incorporated in the Xxxxxxxx Islands having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Xxxxxxxx Islands.
Sister Parent has the meaning
given to the term “Parent” in the Sister Loan Agreement.
Sister Refund Guarantee means
the refund guarantee issued by the Refund Guarantor in favour of the Sister
Owner.
Sister Security Trustee has
the meaning given to the term “Security Trustee” in the Sister Loan
Agreement.
Sister Shipbuilding Contract
means the turn key building contract between the Builder and the Sister Owner
dated as of 24 January 2008 pursuant to which the Builder agreed to build and
deliver the Sister Vessel to the Sister Owner.
Sister Three Year Drilling
Charter has the meaning given to the term “Three Year Drilling Charter”
in the Sister Loan Agreement.
Sister Vessel means the
drillship being constructed by the Builder with Hull Number 1866 pursuant to the
Sister Shipbuilding Contract.
25
Software Licences means, at
any time, all licences granted to the Owner in respect of the Operational
Software.
Software Records means, at any
time, records in respect of:
|
|
(a)
|
the
Operational Software;
|
|
|
(b)
|
the
identity of the then current suppliers of the Operational
Software;
|
|
|
(c)
|
all
upgrades carried out in respect of the Operational Software or changes to
the Software Licences; and
|
|
|
(d)
|
all
Software Licences.
|
Sponsor means Dryships Inc., a
corporation incorporated in the Xxxxxxxx Islands whose registered office is at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx
XX00000.
Sponsor Equity means the
aggregate of any Balancing Equity Contribution, the Initial Equity Contribution,
the Equity Collateral and the Equity Contributions.
Sponsor Construction and
Post-Delivery Guarantee means the guarantee and indemnity from the
Sponsor dated on or about the date hereof in favour of, and in form and
substance satisfactory to, the Security Trustee pursuant to which the Sponsor
guarantees and indemnifies the Finance Parties in respect of the obligations of
the Owner to pay:
|
|
(a)
|
the
Initial Equity Contribution, each Equity Contribution (including any bonus
payments to the Builder if the Vessel is delivered early), the Equity
Collateral, amounts to be paid into the Debt Service Reserve Account and
each Balancing Equity Contribution at the relevant time;
and
|
|
|
(b)
|
during
the Post-Completion Period, up to
U.S.$214,000,000.
|
Subsidiary means:
|
|
(a)
|
a
subsidiary within the meaning of section 736 of the Companies Xxx 0000;
and
|
|
|
(b)
|
unless
the context otherwise requires, a subsidiary undertaking within the
meaning of section 258 of the Companies Xxx
0000.
|
Swap Agreement means any ISDA
Master Agreement, schedule (including any credit support annexed thereto) and
confirmation entered into between a Swap Bank and the Owner or any other hedging
arrangement entered into between a Swap Bank and the Owner prior to the
Utilisation Date for the Incidental Costs Loan in connection with at least 75
per cent. of the interest expected to be payable under this Agreement in respect
of the KEXIM Loans and the Commercial Loans, as estimated by the Swap
Banks.
Swap Agreement Assignment
means the assignment of any Swap Agreement, in the form attached at Appendix 4
(Form of Swap Agreement Assignment) entered or to be entered into on or before
the Utilisation Date for the Incidental Costs Loan.
26
Swap Bank means Deutsche Bank
AG acting through its London branch (or any Affiliate thereof), and Dexia Credit
Local, New York Branch, and from time to time, any person party to the DPP in
its capacity as a swap bank.
Swap Costs means any amount
payable by the Owner under a Swap Agreement except for any Swap Termination
Payment.
Swap Limit means
US$40,000,000.
Swap Termination Payment means
any sums payable or owing by the Owner to a Swap Bank under or in connection
with an Event of Default (as that term is defined in the relevant Swap
Agreement) or Termination Event (as that term is defined in the relevant Swap
Agreement) or the occurrence of an Early Termination Date (as that term is
defined in the relevant Swap Agreement) pursuant to a Swap Agreement whether or
not matured and whether or not liquidated.
Tax means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
related penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).
Tax Deduction means a
deduction or withholding for or on account of Tax made from a payment under a
Finance Document.
Tax Payment means a payment
made by the Owner to a Lender in any way relating to a Tax Deduction or under
any indemnity given by the Owner in respect of Tax under any Finance
Document.
Technical Adviser means Det
Norske Veritas or any replacement marine surveyor, valuer or other technical
adviser appointed by the Facility Agent on behalf of the Lenders, in
consultation with the Owner, to review project progress on the Shipbuilding
Contracts and Drilling Charter and to report to the Lenders
thereon.
Technical Proposal means the
technical due diligence proposal dated 30 June 2008 and issued by the Technical
Adviser.
Technical Records means all
technical data, manuals, logbooks and other records (whether kept or to be kept
in compliance with any Applicable Law or any requirement of any Government
Entity or the Drilling Charter) relating to the Vessel.
Term means each period
determined under Clause 8 (Terms) by reference to which interest payable on a
Loan is calculated.
Three Year Drilling Charter
means a Drilling Charter entered into for a minimum term (excluding any optional
extensions) of three (3) years, but less than five (5) years, from the Final
Completion Date.
Total Commitments means the
aggregate of the Commitments of all the Lenders.
Total Loss means, in relation
to the Vessel:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Vessel;
|
27
|
|
(b)
|
requisition
for title or other compulsory acquisition of the Vessel otherwise than by
requisition for hire; and
|
|
|
(c)
|
capture,
seizure, arrest, detention or confiscation of the Vessel by any Government
Entity or by persons acting or purporting to act on behalf of any
government or any other person or entity which deprives the Owner of the
Vessel or, as the case may be, the Charterer of the use of the Vessel for
more than 60 days after that
occurrence.
|
Transaction Authorisation
means any authorisation, permit, licence, consent or approval required by
any person or customary for any person to hold in connection with the entry
into, performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents, excluding authorisations agreed not
to be delivered under the Transaction Documents.
Transaction Documents means
the Finance Documents and Related Contracts.
Transfer Certificate means a
certificate, substantially in the form of Schedule 4 (Form of Transfer
Certificate), with such amendments as the Security Trustee and the Owner may
approve or reasonably require or any other form agreed between the Security
Trustee and the Owner.
Undrawn Amount means an
amount, determined as at the Final Completion Date, equal to the Maximum
Facility Amount less the aggregate of the Loans outstanding as at the Final
Completion Date following the advance of the Delivery Loan.
Undrawn Amount Loan means any
Loan to be advanced under the terms of this Agreement in relation to the Undrawn
Amount.
Utilisation Date means each
date on which a Facility or any part thereof is utilised.
Vessel means the drillship
being constructed in accordance with the Shipbuilding Contract with Hull Number
1865, including all the topside, equipment, buyer’s supplies, parts, material
and items constructed, manufactured or assembled under the Shipbuilding Contract
incorporated in or attached to it.
Vessel Cost means the total of
(a) the Contract Price, (b) the Incidental Costs, and (c) any other costs agreed
by all of the Lenders.
Workscope means the workscope
of the Technical Adviser as set out in the Technical Proposal.
|
1.2
|
Construction
|
|
|
(a)
|
In
this Agreement, unless the contrary intention appears, a reference
to:
|
|
|
(i)
|
an
amendment includes
a supplement, novation, restatement or re-enactment and amended will be
construed accordingly;
|
|
|
(ii)
|
assets includes present
and future properties, revenues and rights of every
description;
|
28
|
|
(iii)
|
an
authorisation
includes an authorisation, consent, approval, resolution, licence,
exemption, filing, registration or
notarisation;
|
|
|
(iv)
|
disposal means a sale,
transfer, grant, lease or other disposal, whether voluntary or
involuntary, and dispose will be
construed accordingly;
|
|
|
(v)
|
indebtedness includes
any obligation (whether incurred as principal or as surety) for the
payment or repayment of money;
|
|
|
(vi)
|
a
person includes
any individual, company, corporation, unincorporated association or body
(including a partnership, trust, joint venture or consortium), government,
state, agency, organisation or other entity whether or not having separate
legal personality and shall include its successors, permitted assignees
and permitted transferees;
|
|
|
(vii)
|
a
regulation
includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law but, if not having the force of
law, being of a type with which any person to which it applies is
accustomed to comply) of any governmental, inter-governmental or
supranational body, agency, department or regulatory, self-regulatory or
other authority or organisation;
|
|
|
(viii)
|
know your customer
requirements are the identification checks that a Finance Party
requests in order to meet its obligations under any Applicable Law to
identify a person who is (or is to become) its
customer;
|
|
|
(ix)
|
a
currency is a
reference to the lawful currency for the time being of the relevant
country;
|
|
|
(x)
|
a
Default being
outstanding or
continuing means that it has not been cured, remedied or
waived;
|
|
|
(xi)
|
a
provision of law is a reference to
that provision as extended, applied, amended or re-enacted and includes
any subordinate legislation;
|
|
|
(xii)
|
a
Clause, a Subclause, an Appendix or a Schedule is a reference to
a clause, subclause, appendix of, or a schedule to, this
Agreement;
|
|
|
(xiii)
|
a
Party or any other person includes its successors in title, permitted
assigns and permitted transferees;
|
|
|
(xiv)
|
a
Finance Document, Sister Finance Document, other document or security
includes (without prejudice to any prohibition on amendments) any
amendment to that Finance Document, Sister Finance Document or other
document or security, including any change in the purpose of, any
extension of or any increase in the amount of a facility or any additional
facility;
|
|
|
(xv)
|
a
time of day is a reference to London time;
and
|
29
|
|
(xvi)
|
words
importing the plural shall include the singular and vice
versa.
|
|
|
(b)
|
Unless
the contrary intention appears, a reference to a month or months is a reference to
a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month or the calendar
month in which it is to end, except
that:
|
|
|
(i)
|
if
the numerically corresponding day is not a Business Day, the period will
end on the next Business Day in that month (if there is one) or the
preceding Business Day (if there is
not);
|
|
|
(ii)
|
if
there is no numerically corresponding day in that month, that period will
end on the last Business Day in that month;
and
|
|
|
(iii)
|
notwithstanding
subparagraph (i) above, a period which commences on the last Business Day
of a month will end on the last Business Day in the next month or the
calendar month in which it is to end, as
appropriate.
|
|
|
(c)
|
Unless
expressly provided to the contrary in a Finance Document, a person (other
than any Secured Party or Affiliate of such Secured Party) who is not a
party to a Finance Document may not enforce any of its terms under the
Contracts (Rights of Third Parties) Xxx 0000 and notwithstanding any term
of any Finance Document, no consent of any third party is required for any
amendment (including any release or compromise of any liability) or
termination of that Finance
Document.
|
|
|
(d)
|
Unless
the contrary intention appears or unless the context otherwise
permits:
|
|
|
(i)
|
a
reference to a Party will not include that Party if it has ceased to be a
party under this Agreement;
|
|
|
(ii)
|
a
word or expression used in any other Finance Document or in any notice
given in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement;
and
|
|
|
(iii)
|
any
obligation of the Owner under the Finance Documents which is not a payment
obligation remains in force in accordance with its terms for so long as
any payment obligation of the Owner is or may be outstanding under the
Finance Documents.
|
|
|
(e)
|
If,
following the occurrence of an Event of Default which is continuing, any
Finance Party acting reasonably considers that an amount paid to it under
a Finance Document is capable of being avoided or otherwise set aside on
the liquidation or administration of the payer or otherwise, then that
amount shall not be considered to have been irrevocably paid for the
purposes of that Finance Document.
|
|
|
(f)
|
The
headings in this Agreement do not affect its
interpretation.
|
|
|
(g)
|
Where
the Owner requests any amendment, waiver or grace period in respect of any
provision of the Transaction Documents which would conflict with any
provision of the GIEK
Guarantee or require consent from GIEK under the GIEK Guarantee, the
Eksportfinans Lenders may request the Facility Agent to ask GIEK for a
response to such request and the Facility Agent shall not be obliged to
respond to the Owner until it receives a response from
GIEK.
|
30
|
|
(h)
|
Where
the Owner requests any amendment, waiver or grace period in respect of any
provision of the Transaction Documents which would conflict with any
provision of the KEXIM Guarantee or require consent from KEXIM, the KEXIM
Lenders may request the Facility Agent to ask KEXIM for a response to such
request and the Facility Agent shall not be obliged to respond to the
Owner until it receives a response from
KEXIM.
|
|
2.
|
FACILITIES
|
|
2.1
|
Loan
Facility
|
|
|
(a)
|
Subject
to the terms of this Agreement, the Lenders make available to the Owner a
term loan facility in a maximum aggregate amount equal to the Maximum
Facility Amount.
|
|
|
(b)
|
The
Facility shall be capable of being drawn up to the Maximum Facility Amount
on the dates described in Clause 4.2(a) (Completion of
Requests).
|
|
2.2
|
Purpose
|
Each Loan
may be used only in or towards:
|
|
(a)
|
financing
the cost of construction of the Vessel pursuant to the Shipbuilding
Contract;
|
|
|
(b)
|
financing
such other items and costs as are included in the Vessel Cost;
and
|
|
|
(c)
|
payment
of amounts as described in Clause 4.1(e) (Giving of
Requests).
|
|
2.3
|
No
obligation to monitor
|
No
Finance Party is obliged to monitor or verify the utilisation of any
Loan.
|
2.4
|
Nature
of a Finance Party’s rights and
obligations
|
|
|
(a)
|
Unless
otherwise agreed in writing by all the Finance
Parties:
|
|
|
(i)
|
the
obligations of a Finance Party under the Finance Documents are
several;
|
|
|
(ii)
|
failure
by a Finance Party to perform its obligations does not affect the
obligations of any other Party under the Finance
Documents;
|
|
|
(iii)
|
no
Finance Party is responsible for the obligations of any other Finance
Party under the Finance Documents;
|
|
|
(iv)
|
the
rights of a Finance Party under the Finance Documents are separate and
independent rights;
|
31
|
|
(v)
|
a
Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce those rights;
and
|
|
|
(vi)
|
a
debt arising under the Finance Documents to a Finance Party is a separate
and independent debt.
|
|
|
(b)
|
If
at any time a Finance Party fails to pay when due its share of any Loan
amount when required to do so, the Mandated Lead Arranger agrees that it
shall consult with the Owner for a reasonable period of time and act in
good faith to assist the Owner in resolving the matter, but at all times
without any liability on the part of the Mandated Lead
Arranger.
|
|
|
(c)
|
Each
Swap Bank is a Party to this Agreement only in order to take the benefit
of the rights given to the Finance Parties by this
Agreement.
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
Conditions
precedent documents
|
|
|
(a)
|
A
Request in respect of any Loan may not be given until the Facility Agent
has notified the Owner and the Lenders that it has received all of the
documents and evidence set out in Schedule 2 (Conditions Precedent) in
respect of the Loan the subject of that Request in form and substance
satisfactory to the Facility Agent (acting on the instructions of all of
the Lenders) or that it expects to receive outstanding documents or
evidence on or before the Utilisation Date of such Loan or, in the case of
evidence on the payment of the Equity Contribution, Balancing Equity
Contribution or Equity Collateral, on or before the date which falls one
(1) Business Day after the date of service of the relevant Request to the
Facility Agent (provided that it will be a condition precedent to the
obligations of each Lender to advance such Loan that, as at the relevant
Utilisation Date (or, in the case of evidence of the payment of the Equity
Contribution, Balancing Equity Contribution or Equity Collateral, as at
the date which falls one (1) Business Day after the date the Request is
served), such outstanding documents or evidence have been received by the
Facility Agent in form and substance satisfactory to the Facility Agent
(acting on the instructions of all of the Lenders)). The
Facility Agent must give this notification to the Owner and the Lenders
promptly upon being so satisfied.
|
|
|
(b)
|
That
part of the Delivery Loan which relates to all or part of the Instalment
payable on the Delivery Date shall, if the Delivery Date has not at such
time occurred, be deposited by the Facility Agent into the account of [the
Refund Guarantor]1 (the Escrow Account) with its
correspondent bank in New York three Business Days prior to the proposed
Delivery Date, subject to the following irrevocable instructions
(addressed to [the Refund Guarantor] with a copy to the correspondent
bank):
|
“We have
today credited to the account of [“The Export-Import Bank of Korea”] (account
number [●] with [●] ([here inset international recognition codes]) the amount of
[insert here the amount of final Loan to be used in respect of the Delivery Date
Instalment] United States Dollars (US$[●]) (the Deposit). This
payment is made in connection with the delivery instalment which will become
payable by Drillship Kithira Owners Inc. (the Buyer) to Samsung Heavy
Industries Co., Ltd.
(the Builder) under the
terms of the shipbuilding contract dated 24th January 2008 relating to Hull no.
1865 (the Ship). You are
irrevocably instructed to order the release of the Deposit to either (a) the
Builder upon your receipt of both (i) a copy of the Protocol of Delivery and
Acceptance relating to the Ship signed by the Builder and the Buyer and (ii) a
written confirmation from the Facility Agent that the Deposit may be released to
the Builder or (b) us (for credit to account number [●] to [●] ([here insert
international recognition codes]) upon your receipt of written instructions from
both us and the Buyer to do so. If, by noon (Korean time) on the date
which falls [5] days after the proposed Delivery Date, you have not ordered the
release of the Deposit to the Builder in accordance with (a) above or to us in
accordance with (b) above you shall (unless otherwise instructed by us)
immediately instruct the return of the Deposit to us (for credit to the account
referred to above) on and for value on the date which falls [5] days after the
proposed Delivery Date.”]
1 Samsung
to confirm – see Article II paragraph 5(c) of the Shipbuilding
Contract.
32
|
|
(c)
|
If
the Delivery Date has not occurred at the time the Request for the
Delivery Loan is served, the Owner undertakes with the Finance Parties not
to sign a Protocol of Delivery and Acceptance in respect of the Vessel
unless the Facility Agent has confirmed that the conditions precedent
referred to the Clause 3.1(a) in respect of the Delivery Loan above have
been or will, simultaneously with such signing, be
satisfied.
|
|
3.2
|
Further
conditions precedent
|
The
obligations of each Lender to advance any Loan are subject to the further
conditions precedent that on both the date of the Request and the Utilisation
Date for that Loan:
|
|
(a)
|
the
Repeating Representations are correct in all material
respects;
|
|
|
(b)
|
no
Default or Mandatory Prepayment Event or Potential Mandatory Prepayment
Event is outstanding or would result from the
Loan;
|
|
|
(c)
|
the
Facility Agent has received an officer’s certificate from the Owner
confirming that:
|
|
|
(i)
|
save
as permitted by the Finance Documents, there have been no material
amendments or variations agreed to the Related Contracts existing at such
time that have not been agreed by the Facility Agent in accordance with
the terms of this Agreement;
|
|
|
(ii)
|
no
Related Contracts have been rescinded or terminated by any party to
them;
|
|
|
(iii)
|
no
action has been taken by (a) the Owner (b) the Sponsor or (c) by any other
party which might in any way render any Related Contract inoperative or
unenforceable, in whole or in any part;
and
|
|
|
(iv)
|
none
of the events mentioned in Clauses 18.6 (Insolvency), 18.7 (Insolvency
proceedings), 18.8 (Creditors’ process), 18.9 (Cessation of business), or
18.10 (Failure to pay final judgment) has occurred, to the best of the
Owner’s knowledge and belief (acting with the proper due diligence), in
respect of any of the Refund Guarantor, the Builder, the Manager, the
Charterer Parent (if applicable) or the Charterer (if applicable);
and
|
33
|
|
(d)
|
the
Facility Agent has received such other documents which, based on legal
advice received from the relevant advisers referred to in this Agreement
are necessary to evidence the legality, validity and enforceability of the
obligations of the parties to any Finance Document being delivered on such
Utilisation Date.
|
|
3.3
|
Waiver
of conditions precedent
|
The
conditions precedent in this Clause 3 are solely for the benefit of the Lenders,
and may be waived on their behalf in whole or in part and with or without
conditions by the Facility Agent (acting on the instructions of all of the
Lenders).
|
4.
|
UTILISATION
|
|
4.1
|
Giving
of Requests
|
|
|
(a)
|
The
Owner may borrow a Loan by giving to the Facility Agent a duly completed
Request.
|
|
|
(b)
|
Unless
the Facility Agent otherwise agrees, the latest time for receipt by the
Facility Agent of a duly completed Request is 11.00 a.m. three Business
Days prior to the date of the proposed borrowing and, in respect of the
Delivery Loan, ten Business Days prior to the date of the proposed
borrowing. The Owner undertakes that any advance notices
regarding expected payment dates of Instalments shall be promptly
delivered to the Facility Agent at the same time as such notices are
received by the Owner, Manager or Sponsor, as the case may be, from the
Builder. The Facility Agent shall provide copies of such advance notices
promptly to KEXIM upon receipt of the same from the Owner and to the other
Lenders upon request.
|
|
|
(c)
|
The
Owner may, subject to Clauses 4.1(d) and 4.1(e), submit up to only four
Requests, one in respect of each of the Instalment Loan 1, the Instalment
Loan 2, the Instalment Loan 3, and the Delivery Loan (each an Instalment
Loan).
|
|
|
(d)
|
Notwithstanding
Clause 4.1(c), the Owner may submit one Request for the Incidental Costs
Loan and Requests for Incidental Vessel Costs Loans in accordance with the
provisions of Clause 4.2 (Completion of
Requests).
|
|
|
(e)
|
Notwithstanding
Clause 4.1(c), if on the Final Completion Date there is an Undrawn Amount,
the Owner may, if the Facility Agent (acting on the instructions of all
the Lenders who shall have full discretion in connection with such
instructions) so agrees, and on such terms and subject to such conditions
as the Facility Agent may, acting on such instructions, require, submit a
Request for an amount not exceeding the Undrawn Amount to be used to
reimburse the Owner for amounts of Vessel Costs paid by it and not already
financed hereunder or such other purposes as the Lenders may
agree.
|
|
|
(f)
|
Each
Request is irrevocable.
|
|
4.2
|
Completion
of Requests
|
A Request
will not be regarded as having been duly completed unless:
34
(a) the
Utilisation Date is a Business Day falling within the relevant Availability
Period for that Loan and:
|
|
(i)
|
for
an Instalment Loan (other than the Delivery Loan), is the date on which
the corresponding Instalment is payable under the terms of the
Shipbuilding Contract;
|
|
|
(ii)
|
for
the Delivery Loan, is the Final Completion Date;
or
|
|
|
(iii)
|
for
an Incidental Vessel Costs Loan:
|
|
|
(A)
|
for
the first Incidental Vessel Costs Loan, is a date on or after the date of
this Agreement; and
|
|
|
(B)
|
for
any other Incidental Vessel Costs Loan, is a date falling at least three
(3) months after the previous Incidental Vessel Costs Loan Utilisation
Date;
|
|
|
(b)
|
the
requested Incidental Costs Loan is in an amount not exceeding the
aggregate amount of:
|
|
|
(i)
|
the
Incidental Loan Costs incurred in the period up to and including the
Utilisation Date of the Incidental Costs
Loan;
|
|
|
(ii)
|
the
aggregate amount of the Approved Incidental Vessel Costs payable in the
period up to and including the Utilisation Date of the Incidental Costs
Loan and supported by invoices or receipts;
and
|
|
|
(iii)
|
the
aggregate estimated amount of Approved Incidental Vessel Costs which will
become payable in the period up to and including the Utilisation Date of
the Instalment Loan 1, supported by evidence satisfactory to the Facility
Agent (acting in its sole
discretion);
|
|
|
(c)
|
the
requested Loan (other than the requested Incidental Costs Loan) is in an
amount not exceeding:
|
|
|
(i)
|
if
a Drilling Charter and a Sister Drilling Charter has been entered into ten
(10) Business Days prior to the relevant Utilisation Date
and:
|
|
|
(A)
|
the
Drilling Charter is a Five Year Drilling Charter and the Sister Drilling
Charter is a Sister Five Year Drilling Charter;
or
|
|
|
(B)
|
the
Drilling Charter is a Five Year Drilling Charter and the Sister Drilling
Charter is a Sister Three Year Drilling Charter;
or
|
|
|
(C)
|
the
Drilling Charter is a Three Year Drilling Charter and the Sister Drilling
Charter is a Sister Five Year Drilling
Charter,
|
a
percentage of the Scheduled Instalment Amount or, as applicable the Approved
Incidental Vessel Costs (in each case determined by the Facility Agent) to be
derived
from an iterative process in a manner that the expected LTC Ratio at the
Utilisation Date following the advance of the Loan equals zero point seven
(0.7); or
35
|
|
(ii)
|
if
the conditions in Clause 4.2(c)(i) have not been met, a percentage of the
Scheduled Instalment Amount or, as applicable the Approved Incidental
Vessel Costs (in each case determined by the Facility Agent) to be derived
from an iterative process in a manner that the expected LTC Ratio at the
Utilisation Date following the advance of the Loan equals zero point four
(0.4),
|
together
with the Incidental Loan Costs to be capitalised or, as the case may be,
reimbursed on that Utilisation Date in accordance with Clause 4.4;
and
|
|
(d)
|
the
amount requested for any Loan when aggregated
with:
|
|
|
(i)
|
existing
Loans advanced by the Lenders;
|
|
|
(ii)
|
the
amounts to be drawn down under any other Request issued for drawdown on
the proposed Utilisation Date; and
|
|
|
(e)
|
all
amounts capitalised pursuant to Clause 4.4 (Capitalisation of Incidental
Loan Costs),
|
does not
exceed the Maximum Facility Amount; and
|
|
(f)
|
subject
to Clause 4.3, the amount of the Loan requested is apportioned pro rata to
the Eksportfinans Loan, the KEXIM Loan and the Commercial Loan by
reference to the proportion of the Total Commitments borne by the
Commitments of the Eksportfinans Lenders, the KEXIM Lenders and Commercial
Lenders respectively at the relevant
time.
|
Only one
Loan may be requested in a Request.
|
4.3
|
Advance
of Loan
|
|
|
(a)
|
The
Facility Agent must promptly notify each Lender of the details of the
requested Loan and the amount of its share in that Loan (as calculated by
the Facility Agent in accordance with this Clause
4.3).
|
|
|
(b)
|
No
Eksportfinans Lender is obliged to participate in the Incidental Costs
Loan or any Incidental Vessel Costs
Loan.
|
|
|
(c)
|
The
amount of each Lender’s share of each requested Instalment Loan will be
its Pro Rata Share on the proposed Utilisation Date but adjusted so that
the total amount lent by the Eksportfinans Lenders in respect of such Loan
is equal to the aggregate which would have been, and would be, lent by the
Eksportfinans Lenders, if:
|
|
|
(i)
|
they
had participated to the extent of their Pro Rata Share in the Incidental
Costs Loan and each Incidental Vessel Costs Loan drawn on or prior to the
Utilisation Date of the relevant Instalment Loan;
and
|
36
|
|
(ii)
|
they
were to participate to the extent of their Pro Rata Share in the relevant
Instalment Loan,
|
and
taking into account the amount actually lent by the Eksportfinans Lenders in
respect of any Instalment Loans for already drawn.
|
|
(d)
|
The
Facility Agent shall calculate the amount to be lent by each of the
Lenders in connection with each Instalment Loan and shall notify each of
the Lenders of such amount as soon as practicable after receipt by the
Facility Agent of the Request relating to that Instalment
Loan.
|
|
|
(e)
|
No
Lender is obliged to participate in a Loan if, as a
result:
|
|
|
(i)
|
its
share in the Loans under the Facility would exceed its
Commitment;
|
|
|
(ii)
|
the
Loans would exceed the Total
Commitments;
|
|
|
(iii)
|
in
respect of the Eksportfinans Lenders, the aggregate of the Eksportfinans
Loans would exceed the Maximum Eksportfinans Loan
Amount;
|
|
|
(iv)
|
in
respect of the KEXIM Lenders, the aggregate of the KEXIM Loans would
exceed the Maximum KEXIM Loan Amount;
or
|
|
|
(v)
|
in
respect of the Commercial Lenders, the aggregate of the Commercial Loans
would exceed the Maximum Commercial Loan
Amount;
|
|
|
(f)
|
If
the conditions set out in this Agreement have been met, each Lender must
ensure that its share in the requested Loan will be available to the
Facility Agent for the Owner through its Facility Office by
10.00 a.m. on the relevant Utilisation
Date.
|
|
4.4
|
Capitalisation
of Incidental Loan Costs
|
|
|
(a)
|
During
the Pre-Completion Period the Commitment fee payable in accordance with
Clause 22.1 (Commitment fee), and interest calculated and payable in
accordance with Clause 7.1(a) (other than any such Commitment fees or
interest included in the Incidental Costs Loan or interest payable to the
Eksportfinans Lenders under this Agreement) shall accrue and shall, on the
last day of each Term during the Pre-Completion Period, be capitalised and
added to the principal amount of the Loans
outstanding.
|
|
|
(b)
|
The
amount of any Incidental Loan Costs to be capitalised may not in any
circumstances exceed, when aggregated with the Loans already made and
amounts of Incidental Loan Costs already capitalised under the relevant
Loan, the Maximum Facility Amount or cause the applicable LTC Ratio set
out in Clause 4.2(c)(i) or 4.2(c)(ii) to be breached. Any Incidental Loan
Costs due and payable which cannot be capitalised in accordance with this
Clause 4.4 must be paid by the Owner on the due
date.
|
|
5.
|
REPAYMENT
|
|
|
(a)
|
The
Owner must repay the Loans to the Facility Agent on each Repayment Date in
accordance with the Repayment
Schedule.
|
37
|
|
(b)
|
The
Facility Agent shall notify the Owner and the Lenders of any change in the
amount or the timing of any Repayment Instalment as soon as practicable
prior to or, as the case may be, after the Final Completion
Date. In the event of any such notification, the Facility Agent
shall replace the Repayment Schedule attached at Schedule 5 (Loan
Repayment Schedule) with a new Repayment Schedule reflecting the correct
Repayment Instalments and the correct Repayment Dates and promptly provide
a copy thereof to the Owner and the
Lenders.
|
|
|
(c)
|
The
Loans shall be repaid in full on the Final Maturity
Date.
|
|
|
(d)
|
Any
amounts repaid under this Clause 5 may not be
re-borrowed.
|
|
6.
|
PREPAYMENT
AND CANCELLATION
|
|
6.1
|
Mandatory
prepayment – illegality
|
|
|
(a)
|
If
it becomes, or to the knowledge of any Lender is to become, unlawful or
otherwise prohibited (whether temporarily or permanently) in any
jurisdiction for a Lender to perform any of its obligations as
contemplated by a Finance Document or to fund or maintain its share in one
or more of the Loans, or to exercise any of its material rights under the
Finance Documents, that Lender shall notify the Facility Agent and the
Owner (any such event being a Lender
Event).
|
|
|
(b)
|
After
notification under paragraph (a) above (and subject always to satisfactory
alternate arrangements being put into place in accordance with paragraph
(d) below):
|
|
|
(i)
|
the
Owner must repay or prepay the share of that Lender in the relevant Loan
or Loans on the date specified in paragraph (c) below;
and
|
|
|
(ii)
|
the
Commitments of that Lender will be immediately
cancelled.
|
|
|
(c)
|
The
date for prepayment of a Lender’s share in a Loan will
be:
|
|
|
(i)
|
the
last day of the current Term of that Loan;
or
|
|
|
(ii)
|
if
earlier, the date specified by that Lender in the notice delivered to the
Owner under paragraph (a) above (being no earlier than the last day of any
applicable grace period permitted by Applicable
Law).
|
|
|
(d)
|
If,
prior to the occurrence of a Lender Event, a Lender receives notice or
becomes aware that a Lender Event will occur, that Lender and the Owner
shall enter into discussions in good faith for a period of twenty (20)
days (or such shorter period, if any, as may be available prior to the
Lender Event taking effect) (the Lender Consultation
Period) with a view to agreeing how the effects of the Lender Event
can be avoided or mitigated so that alternative legal, valid and binding
obligations, in form and substance satisfactory to that Lender and the
Owner, are put in place. If that Lender and the Owner cannot
agree and complete such arrangements prior to the end of the Lender
Consultation Period, the Owner shall be obliged to immediately prepay the
share of that Lender in the Loan on the date specified in paragraph (c)
above.
|
38
|
6.2
|
Mandatory
prepayment – Total Loss, sale and Related
Contracts
|
The Owner
shall be obliged to prepay the whole of the Loans then outstanding (and each
Lender’s Commitments shall be immediately cancelled) in the following
circumstances and at the following times:
|
|
(a)
|
if
there is a Total Loss (whether before or after the Delivery Date), on the
earlier of:
|
|
|
(i)
|
the
date falling 90 days after the Date of Total Loss;
and
|
|
|
(ii)
|
the
date of receipt by the Owner or the Security Trustee of the proceeds of
insurance relating to such Total
Loss;
|
|
|
(b)
|
if
the Owner fails to deliver the Vessel to the Charterer in accordance with
the terms of a Drilling Charter (other than in circumstances where there
is a Charter Termination Event), on the date of such
failure;
|
|
|
(c)
|
if
either the Builder or the Owner is in breach of any of its material
obligations under the Shipbuilding Contract, or either the Manager or the
Owner is in breach of any of its material obligations under any other
Related Contract, on the date falling 20 days after the date on which the
Facility Agent gives written notice to the Owner that the Majority Lenders
have so determined and such breach is not remedied or otherwise
compensated for, in each case, to the satisfaction of the Majority Lenders
within such period, or if the matter has been referred to arbitration
within that 20-day period, upon the earlier of a settlement being reached
in respect of such arbitration and 5 days after the receipt of the final
arbitration award;
|
|
|
(d)
|
if
the Vessel has not been delivered by the Builder and accepted
unconditionally by the Charterer under the relevant Drilling Charter by
the date falling 210 days after the Scheduled Delivery Date (the Longstop Date), on the
Business Day immediately succeeding the Longstop
Date;
|
|
|
(e)
|
if
a material part of the assets of the Charterer or, if applicable, the
Charterer Parent are seized, expropriated, or compulsorily acquired,
nationalised, confiscated or requisitioned by any Government Entity or by
persons purporting to act on behalf of any Government Entity, subject,
however, to the provisions of Clause 16.23 (Breach or Termination of
Drilling Charter or Management
Agreement);
|
|
|
(f)
|
if
a Charter Termination Event occurs, on the date of the occurrence of such
Charter Termination Event, subject, however, to the provisions of Clause
16.23 (Breach or Termination of Drilling Charter or Management
Agreement);
|
|
|
(g)
|
if
the Vessel is sold, on or before the date on which the sale is
completed;
|
|
|
(h)
|
if
the Shipbuilding Contract is terminated in circumstances where the Refund
Guarantee is payable upon the earlier
of:
|
|
|
(i)
|
the
date of receipt of the moneys under the Refund Guarantee;
and
|
39
|
|
(ii)
|
20
days after the date of termination or if the matter has been referred to
arbitration within that 20-day period, upon the earlier of a settlement
being reached in respect of such arbitration and 5 days after the receipt
of the final arbitration award;
|
|
|
(i)
|
if
the Shipbuilding Contract is terminated in circumstances other than those
referred to in paragraph (c), on the date of its
termination;
|
|
|
(j)
|
if
either:
|
|
|
(A)
|
the
Owner ceases to be a Subsidiary of the Sponsor;
or
|
|
|
(B)
|
the
Sponsor ceases to have direct or indirect control of the Owner or to own
directly or indirectly more than 50% of the voting capital or similar
right of ownership of the Owner (and control for this purpose
means the power to direct the management and the policies of the Owner
whether through the ownership of voting capital, by contract or
otherwise),
|
in either
case without the prior written consent of the Facility Agent (acting on the
instructions of all the Lenders). The Facility Agent agrees that it will consult
with the Owner in good faith (taking into account, inter alia, the security and
credit position of the Finance Parties) should the Owner or the Sponsor approach
the Facility Agent with a proposal to effect an initial public offering of the
Owner (but without an obligation on the part of any of the Finance Parties to
consent to any such proposed initial public offering); or
|
|
(k)
|
if
either:
|
|
|
(i)
|
on
the Drilling Charter Cut-off Date neither a Five Year Drilling Charter nor
a Sister Five Year Drilling Charter has been entered
into;
|
|
|
(ii)
|
on
the Drilling Charter Cut-off Date,
either:
|
|
|
(A)
|
a
Five Year Drilling Charter has been entered into but no Sister Drilling
Charter for a minimum term (excluding any optional extensions) of 3 years
from the Final Completion Date has been entered into;
or
|
|
|
(B)
|
a
Sister Five Year Drilling Charter has been entered into, but no Drilling
Charter for a minimum term (excluding any optional extensions) of 3 years
from the Final Completion Date has been entered
into.
|
|
6.3
|
Mandatory
prepayment amount – Sister Vessel
|
The Owner
shall be obliged to prepay the Required Prepayment Percentage of each of the
Loans then outstanding (and each Lender’s Commitment shall be immediately pro rata cancelled) in the
following circumstances and at the following times:
|
|
(a)
|
if
the Sister Vessel is sold, on or before the date on which the sale is
completed; or
|
40
|
|
(b)
|
if
the Sponsor ceases, for whatever reason, to own or retain the legal and
beneficial interest in at least 50% of the shares of the Sister
Owner.
|
|
6.4
|
Mandatory
Prepayment – Invalidity of Finance Documents or Related
Contracts
|
|
|
(a)
|
Without
prejudice to the provisions of Clause 6.1 (Mandatory prepayment –
illegality), if the Facility Agent or the Owner become aware that any of
the following (an Invalidity Event) has
occurred or is likely to occur:
|
|
|
(i)
|
any
Finance Document or Related Contract or any material provision of any such
document ceasing to be valid in any way which, in the case of a Finance
Document, is material and, in the case of a Related Contract, in any way
which has a Material Adverse Effect or is alleged by the Owner to be
ineffective in accordance with its terms for any
reason;
|
|
|
(ii)
|
any
Security Document creating a Security Interest in favour of the Security
Trustee (on trust for the Finance Parties) ceasing to provide a perfected
first priority security interest in favour of the Security Trustee (on
trust for the Finance Parties) (subject to any Permitted Liens having
priority in law); or
|
|
|
(iii)
|
the
Owner repudiates a Finance
Document,
|
then the
Facility Agent or the Owner, as the case may be, shall as soon as practicable
after becoming aware thereof give each other notice of the same (an Invalidity Notice) and,
subject to paragraph (b) below, following receipt of an Invalidity Notice the
Owner shall immediately prepay the outstanding Loans together with accrued
interest and all other amounts accrued under the Finance Documents, and the
Commitments of the Lenders shall be immediately cancelled.
|
|
(b)
|
If,
prior to the occurrence of an Invalidity Event, the Facility Agent or the
Owner receives an Invalidity Notice, the Facility Agent (acting on the
instructions of the Majority Lenders) and the Owner shall enter into
discussions in good faith for a period of 20 days or such shorter period,
if any, as may be available prior to the Invalidity Event taking effect
(the Consultation
Period) with a view to agreeing how the effects of the Invalidity
Event can be avoided so that alternative legal, valid and binding
obligations, in form and substance satisfactory to the Facility Agent
(acting on the instructions of the Majority Lenders) are provided in
replacement of the affected Finance Document or Related
Contract. In conducting such discussions and reaching a
conclusion, the Lenders shall act in good faith but otherwise in their
absolute discretion. If the Facility Agent (acting on the
instructions of the Majority Lenders) and the Owner cannot agree on and
complete such arrangements prior to the earlier of the end of the
Consultation Period and the date upon which the relevant Invalidity Event
becomes effective, the Owner shall be obliged to immediately prepay all
outstanding Loans together with accrued interest and all other amounts
accrued under the Finance Documents, and the Commitments of the Lenders
shall be immediately cancelled.
|
|
6.5
|
Voluntary
prepayment
|
|
|
(a)
|
The
Owner may, at any time after the Final Completion Date and giving not less
than 30 days’ prior written notice to the Facility Agent, prepay a Loan in
whole or in part on the last
day of the relevant Term so long as it simultaneously (or if not then
permitted on the earliest permitted date) prepays a pro rata amount of the
principal outstanding under the Sister Loan
Agreement.
|
41
|
|
(b)
|
A
prepayment must be in a minimum amount of US$10,000,000 and, in excess of
that, in multiples of US$1,000,000.
|
|
6.6
|
Automatic
cancellation
|
The
relevant Commitments of each Lender will be automatically cancelled at the close
of business on the last day of the relevant Availability Period.
|
6.7
|
Voluntary
cancellation
|
|
|
(a)
|
The
Owner may, by giving not less than five Business Days’ prior notice to the
Facility Agent, cancel the unutilised amount of the Total Commitments in
whole or in part so long as it cancels a pro rata amount of commitments
under the Sister Loan Agreement.
|
|
|
(b)
|
Partial
cancellation of the Total Commitments must be in a minimum amount of
US$10,000,000 and, in excess of that, in multiples of
US$1,000,000.
|
|
|
(c)
|
Any
cancellation in part will be applied against the relevant Commitment of
each Lender pro
rata and in respect of the Facility, across the Eksportfinans Loan,
the KEXIM Loan and the Commercial Loan pro
rata.
|
|
6.8
|
Voluntary
prepayment and cancellation
|
|
|
(a)
|
If
the Owner is, or will be, required to pay to a Lender a Tax Payment or an
Increased Cost, the Owner may, while the requirement continues, give
notice to the Facility Agent requesting prepayment and cancellation in
respect of that Lender.
|
|
|
(b)
|
After
notification under paragraph (a)
above:
|
|
|
(i)
|
the
Owner must repay or prepay that Lender’s share in each Loan made to it on
the date specified in paragraph (c) below;
and
|
|
|
(ii)
|
the
Commitment of that Lender will be immediately
cancelled.
|
|
|
(c)
|
The
date for prepayment of a Lender’s share in a Loan will be the last day of
the current Term for the relevant Loan or any earlier date agreed between
the Owner, the Facility Agent and that
Lender.
|
|
6.9
|
Partial
prepayment of Loans
|
|
|
(a)
|
Except
where this Clause 6 expressly provides otherwise, any partial prepayment
of a Loan will be applied against the Repayment Instalments in the inverse
order of their maturity and shall be applied pro rata in respect of
the amounts outstanding to the Eksportfinans Lenders, the KEXIM Lenders
and the Commercial Lenders.
|
42
|
|
(b)
|
Upon
any such partial prepayment, the Facility Agent shall, if applicable,
replace the Repayment Schedule attached at Schedule 5 (Loan Repayment
Schedule) with a new Repayment Schedule(s) reflecting the correct
Repayment Instalments and promptly provide a copy thereof to the
Owner.
|
|
|
(c)
|
No
amount of a Loan prepaid (in full or in part) under this Agreement may
subsequently be re-borrowed.
|
|
6.10
|
Miscellaneous
provisions
|
|
|
(a)
|
Any
notice of prepayment and/or cancellation under this Agreement is
irrevocable and must specify the relevant date(s) and the affected Loans
and Commitments.
|
|
|
(b)
|
All
prepayments under this Agreement must be made with accrued interest on the
amount prepaid.
|
|
|
(c)
|
All
prepayments (whether voluntary or mandatory) under this Agreement shall be
subject to Break Costs (if any). Each Lender claiming Break
Costs shall, as soon as reasonably practicable after demand by the
Facility Agent, provide a certificate confirming the amount of its Break
Costs for any Term in which they accrue. The Facility Agent
agrees to provide a copy of such certificate to the Owner upon request by
the Owner.
|
|
|
(d)
|
No
prepayment or cancellation is allowed except in accordance with the
express terms of this Agreement.
|
|
7.
|
INTEREST
|
|
7.1
|
Calculation
of interest
|
|
|
(a)
|
The
rate of interest on each Commercial Loan for each Term during the
Pre-Completion Period and the Post-Completion Period is the percentage
rate per annum equal to the aggregate
of:
|
|
|
(i)
|
the
Applicable Margin at such time;
|
|
|
(ii)
|
LIBOR;
and
|
|
|
(iii)
|
the
Mandatory Cost, if any.
|
|
|
(b)
|
The
rate of interest on each Eksportfinans Loan for each Term during the
Pre-Completion Period and the Post-Completion Period shall be the
aggregate of:
|
|
|
(i)
|
the
applicable Pre-Completion Eksportfinans Interest Rate or, as the case may
be, the applicable Post-Completion Eksportfinans Interest Rate;
and
|
|
|
(ii)
|
the
Mandatory Cost, if applicable.
|
|
|
(c)
|
The
rate of interest on each KEXIM Loan for each Term during the
Pre-Completion Period and the Post-Completion Period shall be the
aggregate of:
|
43
| (i) | LIBOR; and |
|
|
(ii)
|
the
Applicable Margin at such time.
|
|
|
(d)
|
Interest
shall be calculated:
|
|
|
(i)
|
subject
to paragraph (ii) below, by reference to the actual number of days elapsed
and on the basis of a year of 360 days in respect of any Loan;
and
|
|
|
(ii)
|
on
a 30/360 day basis in respect of any Eksportfinans
Loan.
|
|
|
(e)
|
Interest
shall accrue from and including the first day of each Term to but
excluding the last day of such
Term.
|
|
7.2
|
Payment
of interest
|
Except
where it is provided to the contrary in this Agreement, the Owner must pay
accrued interest on each Loan on the last day of each Term.
|
7.3
|
Interest
on overdue amounts
|
|
|
(a)
|
If
the Owner fails to pay any amount payable by it under the Finance
Documents, it must immediately on demand by the Facility Agent pay
interest on the overdue amount from its due date up to the date of actual
payment, both before, on and after
judgment.
|
|
|
(b)
|
Interest
on an overdue amount is payable at a rate determined by the Facility Agent
to be the aggregate of 3% per annum above the rate which would have been
payable if the overdue amount had, during the period of non-payment,
constituted a Loan. For this purpose, the Facility Agent may
(acting reasonably) select successive Terms of any duration of up to six
months.
|
|
|
(c)
|
Notwithstanding
paragraph (b) above, if the overdue amount is a principal amount of a Loan
and becomes due and payable before the last day of its current Term,
then:
|
|
|
(i)
|
the
first Term for that overdue amount will be the unexpired portion of that
Term; and
|
|
|
(ii)
|
the
rate of interest on the overdue amount for that first Term will be 3% per
annum above the rate then payable on that
Loan.
|
After the
expiry of the first Term for that overdue amount, the rate on the overdue amount
will be calculated in accordance with paragraph (b) above.
|
|
(d)
|
Interest
(if unpaid) on an overdue amount will be compounded with that overdue
amount at the end of each of its Terms but will remain immediately due and
payable.
|
|
7.4
|
Notification
of rates of interest
|
The
Facility Agent must promptly notify each relevant Party of the determination of
a rate of interest under this Agreement.
44
8. TERMS
|
8.1
|
Term
|
|
|
(a)
|
Each
Loan has successive Terms.
|
|
|
(b)
|
The
first term for a Loan will start on the Utilisation Date for that Loan and
each subsequent Term for a Loan will start on the expiry of the preceding
Term for that Loan.
|
|
|
(c)
|
Subject
to the following provisions of this Clause 8 the duration of each Term
shall be three (3) months during the Pre-Completion Period, provided
always that the first Term for the Incidental Costs Loan shall expire on
31st October 2008 or if earlier, at the next Repayment
Date.
|
|
|
(d)
|
Subject
to the following provisions of this Clause 8 the duration of each Term
shall be six (6) months during the Post-Completion Period, provided always
that the first Term after the Final Completion Date shall expire on the
first Repayment Date set out in the Repayment Schedule, being 30th March
2012.
|
|
8.2
|
Consolidation
– Loans
|
A Term
for a Loan will end on the same day as the current Term for any other
Loan. On the last day of those Terms, those Loans will be
consolidated and treated as one Loan.
|
8.3
|
End
of Term on Final Completion Date
|
If a Term
in relation to a Loan advanced during the Pre-Completion Period would otherwise
overrun the Final Completion Date, it will be shortened so that it ends on the
Final Completion Date. Each subsequent Term will be ascertained in
accordance with Clause 8.1(c) (Term).
|
8.4
|
No
overrunning the Final Maturity Date
|
If a Term
would otherwise overrun the Final Maturity Date, it will be shortened so that it
ends on the Final Maturity Date.
|
8.5
|
Other
adjustments
|
The
Facility Agent (with the prior consent of the Majority Lenders) and the Owner
may enter into such other arrangements as they may agree for the adjustment of
Terms and the consolidation and/or splitting of Loans.
|
9.
|
MARKET
DISRUPTION
|
|
9.1
|
Failure
of a Reference Bank to supply a
rate
|
If LIBOR
is to be calculated by reference to the Reference Banks but if a Reference Bank
does not supply a rate by 11.00 a.m. on the second London Business Day before
the first day of the relevant Term, the applicable LIBOR will, subject as
provided below, be calculated on the basis of the rates of the remaining
Reference Banks.
45
9.2 Market
disruption
|
|
(a)
|
In
this Clause 9, each of the following events is a market disruption event:
|
|
|
(i)
|
LIBOR
is to be calculated by reference to the Reference Banks but no Reference
Bank supplies a rate to the Facility Agent by 11.00 a.m. on the second
London Business Day before the first day of the relevant Term;
or
|
|
|
(ii)
|
the
Facility Agent receives by close of business on the second London Business
Day before the first day of the relevant Term notification from any Lender
or Lenders whose shares in the relevant Loan exceed 30% of that Loan that
the cost to them of obtaining matching deposits in the relevant interbank
market is in excess of LIBOR for the relevant
Term.
|
|
|
(b)
|
The
Facility Agent must promptly notify the Owner and the Lenders of a market
disruption event.
|
|
|
(c)
|
After
notification under paragraph (b) above, the rate of interest on each
Lender’s share in the affected Loan for the relevant Term will be the
aggregate of the relevant:
|
|
|
(i)
|
Applicable
Margin at such time;
|
|
|
(ii)
|
rate
notified to the Facility Agent by that Lender as soon as practicable, and
in any event before interest is due to be paid in respect of that Term, to
be that which expresses as a percentage rate per annum the cost to that
Lender of funding the Loan from whatever source it may reasonably select;
and
|
|
|
(iii)
|
Mandatory
Cost, if applicable, to that Lender’s participation in the
Loan.
|
|
9.3
|
Alternative
basis of interest or funding
|
|
|
(a)
|
If
a market disruption event occurs and the Facility Agent or the Owner so
require, the Owner and the Facility Agent must enter into negotiations for
a period of not more than 20 days with a view to agreeing to an
alternative basis for determining the rate of interest and/or funding for
the affected Loan and any relevant future
Loan.
|
|
|
(b)
|
Any
alternative basis agreed between the Owner and the Facility Agent will be,
with the prior written consent of all the Lenders, binding on all the
Parties.
|
|
|
(c)
|
During
the negotiation period referred to in paragraph (a) above and thereafter
unless an agreement for such alternative basis is reached between the
Parties, the provisions of Clause 9.2 shall
apply.
|
|
10.
|
TAXES
|
|
10.1
|
Tax
gross-up
|
|
|
(a)
|
The
Owner must make all payments to be made by it under the Finance Documents
without any Tax Deduction unless a Tax Deduction is required by Applicable
Law.
|
46
|
|
(b)
|
Where
the introduction of, or any change in, or any change in the
interpretation, administration or application of, any Applicable Law or
compliance with any law or regulation made after the date of this
Agreement requires the Owner, or as the case may be, the Facility Agent,
to make a Tax Deduction, as soon as the Owner or a Lender becomes aware of
the same, it must promptly notify the Facility Agent. The
Facility Agent must then promptly notify the affected
Parties.
|
|
|
(c)
|
Following
any notification referred to in paragraph (b) above, the amount of the
payment due from the Owner will be increased or, as the case may be, the
Owner shall make an additional payment, so that the amount (after making
the Tax Deduction) received by the recipient is equal to the payment which
would have been due if no Tax Deduction had been
required.
|
|
|
(d)
|
If
the Owner is required to make a Tax Deduction, it must make the Tax
Deduction and must make any payment required in connection with that Tax
Deduction within the time allowed by the Applicable
Law.
|
|
|
(e)
|
Within
30 days of making either a Tax Deduction or a payment required in
connection with a Tax Deduction or, if later, promptly following receipt
of the same, the Owner must deliver to the Facility Agent for the relevant
Finance Party documents or other information (or certified copies thereof)
evidencing satisfactorily to that Finance Party that the Tax Deduction has
been made or (as applicable) the appropriate payment has been paid to the
relevant taxing authority.
|
|
10.2
|
Tax
indemnity
|
|
|
(a)
|
Except
as provided below, the Owner must (within three Business Days of demand by
the Facility Agent) indemnify a Finance Party by paying to such Finance
Party an amount equal to any loss or liability which that Finance Party
determines will be or has been suffered by that Finance Party for or on
account of Tax in relation to a payment received or receivable (or any
payment deemed to be received or receivable) under a Finance
Document.
|
|
|
(b)
|
Paragraph
(a) above does not apply:
|
|
|
(i)
|
to
any Tax assessed on a Finance Party under the laws of the jurisdiction in
which:
|
|
|
(A)
|
that
Finance Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party has a Facility Office and is
treated as resident for tax purposes;
or
|
|
|
(B)
|
that
Finance Party’s Facility Office is located in respect of amounts received
or receivable in that jurisdiction,
|
if that
Tax is imposed on or calculated by reference to the net income received or
receivable by that Finance Party. However, any payment deemed to be
received or receivable, including any amount treated as income but not actually
received by the Finance
Party, such as a Tax Deduction, will not be treated as net income received or
receivable for this purpose; or
47
|
|
(ii)
|
to
the extent a loss or liability is compensated by an increased payment
under Clause 10.1(c) (Tax
gross-up).
|
|
|
(c)
|
A
Finance Party making, or intending to make, a claim under paragraph (a)
above must promptly notify the Facility Agent of the event which will
give, or has given, rise to the claim. The Facility Agent
shall, in turn, notify the Owner.
|
|
|
(d)
|
A
Finance Party shall, on receiving a payment from the Owner under this
Clause 10.2, notify the Facility
Agent.
|
|
10.3
|
Confidentiality
of Tax affairs
|
If a
Lender intends to make a claim pursuant to Clause 10.2 (Tax indemnity) it shall,
as soon as reasonably practicable after becoming aware that it may be entitled
to make a claim under Clause 10.2 (Tax indemnity), notify the Owner of the
event by reason of which it is entitled to do so, provided that nothing herein
shall require that Lender to disclose any confidential information relating to
the organisation of its affairs.
|
10.4
|
Stamp
taxes
|
The Owner
must pay and within five Business Days of demand indemnify each Finance Party
against any cost, loss or liability that Finance Party incurs in relation to all
stamp duty, registration and other Taxes payable in respect of any Finance
Document, except for any such Tax payable in connection with entering into a
Transfer Certificate.
|
10.5
|
Value
added taxes
|
|
|
(a)
|
All
amounts set out, or expressed to be payable under a Finance Document by
any Party to a Finance Party which (in whole or in part) constitute the
consideration for VAT purposes shall be deemed to be exclusive of any VAT
which is chargeable on such supply, and accordingly, subject to
paragraph (b) below, if VAT is chargeable on any supply made by any
Finance Party to any Party under a Finance Document, that Party must pay
to the Finance Party (in addition to and at the same time as paying the
consideration) an amount equal to the amount of the VAT (and such Finance
Party must promptly provide an appropriate VAT invoice to such
Party).
|
|
|
(b)
|
If
VAT is chargeable on any supply made by any Finance Party (the Supplier) to any other
Finance Party (the Recipient) under a
Finance Document, and any Party (the Relevant Party) is
required by the terms of any Finance Document to pay an amount equal to
the consideration for such supply to the Supplier (rather than being
required to reimburse the Recipient in respect of that consideration),
such Party must also pay to the Supplier (in addition to and at the same
time as paying such amount) an amount equal to the amount of such VAT. The
Recipient must promptly pay to the Relevant Party an amount equal to any
credit or repayment from the relevant tax authority which it reasonably
determines relates to the VAT chargeable on that
supply.
|
48
|
|
(c)
|
Where
a Finance Document requires any Party to reimburse a Finance Party for any
costs or expenses, that Party must also at the same time pay and indemnify
the Finance Party against all VAT incurred by the Finance Party in respect
of the costs or expenses to the extent that the Finance Party reasonably
determines that neither it nor any other member of any group of which it
is a member for VAT purposes is entitled to credit or repayment from the
relevant tax authority in respect of the
VAT.
|
|
11.
|
INCREASED
COSTS
|
|
11.1
|
Increased
Costs
|
Except as
provided below in this Clause 11, the Owner must, within five Business Days of
demand by the Facility Agent, pay to a Finance Party the amount of any Increased
Cost incurred by that Finance Party or any of its Affiliates as a result
of:
|
|
(a)
|
the
introduction of, or any change in, or any change in the interpretation,
administration or application of, any Applicable Law (including, for the
avoidance of doubt, the implementation of matters set out in Basel II or
any other revisions to the Basel Accord);
or
|
|
|
(b)
|
compliance
with any Applicable Law made after the date of this
Agreement.
|
|
11.2
|
Exceptions
|
The Owner
need not make any payment for an Increased Cost to the extent that the Increased
Cost is:
|
|
(a)
|
compensated
for under another Clause or would have been but for an exception to that
Clause;
|
|
|
(b)
|
attributable
to the relevant Finance Party or any of its Affiliates wilfully failing to
comply with any law or regulation;
|
|
|
(c)
|
attributable
to a Tax Deduction required by Applicable Law to be made by the Owner;
or
|
|
|
(d)
|
compensated
for by the payment of Mandatory
Cost.
|
|
11.3
|
Claims
|
|
|
(a)
|
If
a Finance Party intends to make a claim for an Increased Cost it must
notify the Facility Agent of the circumstances giving rise to and the
amount of the claim, following which the Facility Agent will promptly
notify the Owner.
|
|
|
(b)
|
Each
Finance Party must, as soon as practicable after a demand by the Facility
Agent, provide a certificate confirming the amount of its Increased
Cost.
|
|
11.4
|
Mitigation
|
|
|
(a)
|
Each
Finance Party must, in consultation with the Owner, use all reasonable
endeavours to mitigate any circumstances which arise and which result or
would result in any amount being
payable under or pursuant to, or cancelled pursuant to, any of Clause 10
(Taxes) or Clause 11 (Increased Costs) including (but not limited to)
transferring its rights and obligations under the Finance Documents to
another Affiliate or Facility Office and, in respect of any Increased Cost
arising as a result of the implementation of the matters set out in Basel
II or any other revisions to the Basel Accord, each Finance Party must
apply its rights under Clause 11.1(a) (Increased Costs) on a
non-discriminatory basis.
|
49
|
|
(b)
|
The
Owner must indemnify that Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of any step taken by
it under paragraph (a) above.
|
|
|
(c)
|
A
Finance Party is not obliged to take any step under this Clause 11.4 if,
in the opinion of that Finance Party (acting reasonably), to do so would
be prejudicial to it.
|
|
|
(d)
|
Paragraph
(a) does not in any way limit the obligations of the Owner under the
Finance Documents.
|
|
12.
|
ACCOUNTS
|
|
12.1
|
Maintenance
of accounts
|
|
|
(a)
|
The
Owner shall maintain the Accounts (other than the Equity Account) with the
Account Bank until the Final Maturity Date, in each case free of Security
Interests and rights of set-off other than as created by or pursuant to
the Security Documents or in favour of the Account
Bank.
|
|
|
(b)
|
The
Owner shall maintain the Equity Account with the Equity Account Bank until
the Final Completion Date, in each case free of Security Interests and
rights of set-off other than as created by or pursuant to the Security
Documents.
|
|
12.2
|
Proceeds
Account and Equity Account
|
|
|
(a)
|
The
Owner shall pay, or procure that there is
paid:
|
|
|
(i)
|
no
later than one (1) Business Day after the date of service of each Request
to the Facility Agent in the Pre-Completion Period, into the Proceeds
Account, an amount equal to:
|
|
|
(A)
|
any
Balancing Equity Contribution; and
|
|
|
(B)
|
the
relevant Equity Contribution, in each case in respect of the Utilisation
Date to which such Request relates;
and
|
|
|
(ii)
|
the
amount of each Loan into the Proceeds Account or if the Owner so requests
in a Request in respect of an Instalment Loan, to an account of the
Builder specified in the Request;
and
|
|
|
(iii)
|
into
the Equity Account:
|
50
|
(A)
|
no later than one (1) Business Day after the date of service of the Request in respect of the Incidental Costs Loan, an aggregate amount equal to US$9,000,000; |
|
|
(B)
|
no
later than one (1) Business Day after the date of service of the Request
in respect of Instalment Loan 1, an aggregate amount equal to
US$90,000,000; and
|
|
|
(C)
|
on
or prior to the Drilling Charter Cut-off Date, an aggregate amount equal
to all anticipated Equity Contributions to be made until the Final
Completion Date in accordance with the relevant Approved
Budget.
|
|
|
(b)
|
If
an Event of Default occurs, the Owner shall pay, or procure that there is
paid, into the Equity Account an aggregate amount equal to all of the
Equity Collateral that has not yet been
paid.
|
|
|
(c)
|
Subject
to the Owner’s right to make withdrawals from the Equity Account in
accordance with the provisions of this Agreement, the Owner shall ensure
that the balance in the Equity Account at all times meet the requirements
set out in this Clause 12.2.
|
|
|
(d)
|
The
balance of the Equity Account shall at all times prior to the Drilling
Charter Cut-off Date be at least equal to the Loans drawn under this
Agreement as at the relevant time. If the balance of the Equity Account
falls at any time below the amount of the Loans drawn, the Owner shall
immediately pay, or procure that there is paid into the Equity Account
such amount as shall restore the credit balance of the Equity Account to
an amount equal to the aggregate amount of the Loans drawn under this
Agreement as at that time.
|
|
|
(e)
|
During
the Pre-Completion Period and on the Final Completion Date the Owner shall
procure that there is forthwith credited to the Proceeds Account any other
amount payable or paid to the Owner (including any Liquidated Damages
Payments paid by the Builder under the terms of the Shipbuilding
Contract). Provided that no Event of Default or Mandatory
Prepayment Event has occurred and is continuing, the Owner shall be
entitled to instruct the Account Bank or, as the case may be, the Equity
Account Bank to transfer (and irrevocably authorises the Security Trustee
to instruct the Account Bank or, as the case may be, the Equity Account
Bank to transfer):
|
|
|
(i)
|
on
or immediately before each Utilisation Date, from the Equity Account into
the Proceeds Account, an amount equal to the relevant Equity Contribution
in respect of such Utilisation Date;
and
|
|
|
(ii)
|
on
each Utilisation Date, after the proceeds of the relevant Loan have been
credited, sufficient amounts from the Proceeds Account to (A) any account
specified by the Builder to be applied to make Instalment payments, and
(B) the account nominated by the Facility Agent, to be applied to part of
the Incidental Costs Loan as does not relate to Incidental Vessel Costs,
and (C) any account specified by the Owner to be applied towards such
other items and costs as are included in the Vessel
Cost,
|
in each
case in accordance with the terms of this Agreement.
51
| (f) |
During
the Post-Completion Period, the Owner shall procure that there is
forthwith credited to the Proceeds Account all Earnings and any
Requisition Compensation. The Owner shall procure that the
following transfers will then be made in the following
order:
|
|
|
(i)
|
first, to the Operating
Expenses Account a transfer in accordance with Clause 12.3 (Transfers to
the Operating Expenses Account);
|
|
|
(ii)
|
secondly, to the Debt
Service Account a transfer in accordance with Clause 12.4 (Transfers to
Debt Service Account);
|
|
|
(iii)
|
thirdly, to the extent
required, a transfer to the Debt Service Reserve Account in accordance
with Clause 12.9(b) (Payments to the Debt Service Reserve Account on or
after the Utilisation Date of the Delivery Loan);
and
|
|
|
(iv)
|
fourthly, to the extent
required, a transfer to the CAPEX Account in accordance with
Clause 12.10(Transfers to the CAPEX
Account),
|
together
the Primary
Transfers.
|
|
(g)
|
Once
the Primary Transfers have been made, any surplus funds standing to the
credit of the Proceeds Account (if at least US$5,000,000) shall be applied
by the Security Trustee in partial prepayment of the Loans and Clauses 6.9
and 6.10 shall apply.
|
|
|
(h)
|
Provided
no Default or Mandatory Prepayment Event is at such time continuing, the
Owner and the Finance Parties may, notwithstanding the provisions of this
Clause 12 vary the order and application of the Primary Transfers by
agreement in writing, in each case acting
reasonably.
|
|
12.3
|
Transfers
to the Operating Expenses Account
|
Upon
payment of any Earnings or Requisition Compensation into the Proceeds Account
(such date of receipt of payment being an Earnings Deposit Date) the
Owner shall instruct the Account Bank to transfer from the Proceeds Account (and
irrevocably authorises the Security Trustee to instruct the Account Bank to
transfer from the Proceeds Account) to the Operating Expenses Account an amount
equal to the amount allocated for Operating Expenses in the Annual Budget for
the period from that Earnings Deposit Date to the next scheduled Earnings
Deposit Date, and the Owner shall be permitted to withdraw such amount from the
Operating Expenses Account to pay the same to the Manager under and in
accordance with the terms of the Management Agreement and to others for use in
connection with the operating expenses of the Vessel and operation and
management of the Owner incurred in the ordinary course of
business.
|
12.4
|
Transfers
to Debt Service Account
|
Following
the transfer to the Operating Expenses Account in accordance with Clause 12.3
(Transfers to the Operating Expenses Account), the Owner shall procure that
there is transferred from the Proceeds Account (and irrevocably instructs the
Security Trustee to instruct the Account Bank to transfer from the Proceeds
Account) to the Debt Service Account an amount in Dollars calculated in
accordance with the following formula:
52
a= A x
n
N
where:
|
|
a
|
=
|
the
relevant amount of the Earnings and/or, as the case may be, Requisition
Compensation to be transferred to the Debt Service Account out of the
Proceeds Account;
|
|
|
A
|
=
|
the
aggregate amount required to repay the next scheduled principal and
interest instalment (provided that for the purposes of this Clause 12.4,
scheduled interest in respect of any Hedged Portion shall be deemed to be
payable at the applicable Fixed
Rate);
|
| N | = | the number of days in a Retention Period; and |
|
|
n
|
=
|
the
actual number of days elapsed from (and including) the immediately
preceding Earnings Deposit Date in the Retention Period or the first day
of the Retention Period (where there is no preceding Earnings Deposit Date
in a Retention Period) up to (but excluding) the Earnings Deposit
Date,
|
PROVIDED
ALWAYS that on the last Earnings Deposit Date for a Retention Period if there
remains a shortfall under the formula set out in this Clause 12.4 on the last
day of a Retention Period, there shall be transferred to the Debt Service
Account out of the Proceeds Account an amount (taking into account the existing
balance of the Debt Service Account) equal to the amount required to repay the
principal and interest in full which is due on the next Repayment
Date.
|
12.5
|
Additional
payments to the Debt Service
Accounts
|
If, for
any reason, the amount standing to the credit of the Proceeds Account is
insufficient to make any transfer to the Debt Service Account required by Clause
12.4 (Transfers to Debt Service Account), the Owner shall immediately (and in
any event within three Business Days of the relevant Earnings Deposit Date) pay
the shortfall directly into the Debt Service Account.
|
12.6
|
Application
of Debt Service Accounts
|
|
|
(a)
|
On
each Repayment Date:
|
|
|
(i)
|
to
the extent that the Owner is required to make a periodic payment to a Swap
Bank under a Swap Agreement, the Owner shall procure that (and irrevocably
authorises the Security Trustee to instruct the Account Bank to transfer
from the Debt Service Account) an amount equal to the aggregate of any
such periodic payments is transferred forthwith from the Debt Service
Account to the relevant Swap Bank in accordance with the DPP;
and
|
|
|
(ii)
|
to
the extent that a Swap Bank is required to make a periodic payment to the
Owner under a Swap Agreement then the Owner shall request that the Swap
Bank
pays such periodic payment directly into the Debt Service Account when
due.
|
53
|
|
(b)
|
The
Owner shall procure that there is transferred from the Debt Service
Account (and irrevocably authorises the Security Trustee to instruct the
Account Bank to transfer from the Debt Service Account) to the Facility
Agent after any payment to a Swap Bank as described in paragraph (a)(i)
above:
|
|
|
(i)
|
on
each Repayment Date, the amount of the Repayment Instalment then due in
Dollars; and
|
|
|
(ii)
|
on
the last day of each Term, the amount of interest then due in
Dollars,
|
provided
that following the transfer to the Facility Agent in accordance with this
Clause 12.6(b), the Owner shall be entitled to request the Security Trustee
to authorise the transfer of any remaining funds standing to the credit of the
Debt Service Account back to the Proceeds Account.
|
12.7
|
Owner’s
obligations not affected
|
If for
any reason the amount standing to the credit of the Debt Service Account shall
be insufficient to pay any Repayment Instalment or to make any payment of
interest when due, the Owner’s obligation to pay that Repayment Instalment or to
make that payment of interest shall not be affected.
|
12.8
|
Payments
to the Debt Service Reserve Account prior to the Utilisation Date of the
Delivery Loan
|
|
|
(a)
|
The
Owner shall pay, or procure that there is paid to the Debt Service Reserve
Account on or prior to the Drilling Charter Cut-off Date an amount equal
to US$25,000,000.
|
|
|
(b)
|
At
any time, and from time to time, prior to the Final Completion Date, the
Owner shall be entitled, with the prior approval of the Facility Agent
(acting on the instructions of the Majority Lenders), to withdraw all or
part of the moneys standing to the credit of the Debt Service Reserve
Account in order to meet any costs and expenses the Owner may incur which
have not been contemplated in the Approved
Budget.
|
|
|
(c)
|
Any
balance standing to the credit of the Debt Service Reserve Account on the
Utilisation Date of the Delivery Loan, shall be utilised towards the
funding of the Required DSRA
Balance.
|
|
12.9
|
Payments
to the Debt Service Reserve Account on or after the Utilisation Date of
the Delivery Loan
|
|
|
(a)
|
The
Owner shall ensure, from the Utilisation Date of the Delivery Loan and at
all times thereafter until the Final Maturity Date, that the amount
standing to the credit of the Debt Service Reserve Account is equal to the
Required DSRA Balance.
|
|
|
(b)
|
On
each Earnings Deposit Date, following the transfers referred to in Clauses
12.3 and 12.4 above, the Owner shall procure that there is transferred
from the Proceeds Account (and irrevocably authorises the Security Trustee
to instruct the Account Bank to transfer from the Proceeds Account) to the
Debt Service Reserve Account an amount to ensure that
the balance of the Debt Service Reserve Account at such time is an amount
at least equal to the Required DSRA
Balance.
|
54
|
|
(c)
|
The
Security Trustee shall be entitled to withdraw sums of money standing to
the credit of the Debt Service Reserve Account in accordance with the
terms of the Accounts Charge
Agreement.
|
|
12.10
|
Transfers
to the CAPEX Account
|
On each
Earnings Deposit Date, following the transfers referred to above (to the extent
any such payments are required to be made under and in accordance with the terms
thereof), the Owner shall instruct the Account Bank to transfer from the
Proceeds Account (and irrevocably authorise the Security Trustee to instruct the
Account Bank to transfer from Proceeds Account) to the CAPEX Account an amount
equal to the amount allocated for CAPEX Expenses, if any, in the Annual Budget
for the period from that Earnings Deposit Date to the next scheduled Earnings
Deposit Date, and the Owner shall be entitled, in accordance with the terms of
the Annual Budget, with the prior consent of the Security Trustee, to withdraw
such amount from the CAPEX Account to pay (against reasonable and proper
invoices approved by the Facility Agent) any approved CAPEX
Expenses.
|
12.11
|
Investments
|
The
Facility Agent may invest any and all moneys held in the Debt Service Reserve
Account in the name of, or under the control of, the Facility Agent in short
term cash deposits at the Deposit Bank and upon such terms as the Facility Agent
may think fit. If the rating of the Deposit Bank falls below P-1 from Xxxxx’x or
A-1 from S&P, the Facility Agent must promptly remove the deposits placed
under this Clause 12.11 from the Deposit Bank and invest the relevant deposits
at any bank or institution with a rating of not less than P-1 from Xxxxx’x or
A-1 from S&P, selected by the Facility Agent and approved by the Owner and
the Majority Lenders. Notwithstanding any investment in accordance with this
Clause 12.11, all moneys paid into the Debt Service Reserve Account shall at all
times be charged to the benefit of the Secured Parties.
|
12.12
|
Restriction
on withdrawal
|
During
the term of the Facility, no sum may be withdrawn from any of the Accounts
(except in accordance with this Clause 12) without the prior written consent of
the Facility Agent (acting on the instructions of the Majority
Lenders).
|
12.13
|
Liability
of Account Bank
|
Each
Lender agrees to the terms of the appointment of the Account Bank and confirms
that the Account Bank has no liability to the Lenders in respect of amounts
withdrawn from any Account (in accordance with this Agreement and the Accounts
Charge Agreement). Notwithstanding the provisions of
Clause 1.2(c) (Construction), the Account Bank may enforce the terms of
this Clause 12.13 as if it were a party to this Agreement.
|
13.
|
PAYMENTS
|
|
13.1
|
Place
|
|
|
Unless
a Finance Document specifies that payments under it are to be made in
another manner, all payments by a Party (other than the Facility Agent)
under the Finance Documents must be made to the Facility Agent to its
account at such office as it may notify to that Party for this purpose by
not less than five Business Days’ prior
notice.
|
55
|
13.2
|
Funds
|
Payments
under the Finance Documents to the Facility Agent must be made for value on the
due date at such times and in such funds as the Facility Agent may specify to
the Party concerned as being customary at the time for the settlement of
transactions in the relevant currency in the place for payment.
|
13.3
|
Distribution
|
|
|
(a)
|
Each
payment received by the Facility Agent under the Finance Documents for
another Party must, except as provided below, be made available by the
Facility Agent to that Party by payment (as soon as practicable after
receipt) to its account with such office or, in the case of KEXIM, in New
York as it may notify to the Facility Agent for this purpose by not less
than five Business Days’ prior
notice.
|
|
|
(b)
|
The
Facility Agent may apply any amount received by it from the Owner in or
towards payment (as soon as practicable after receipt) of any amount due
from the Owner under the Finance Documents or in or towards the purchase
of any amount of any currency to be so
applied.
|
|
|
(c)
|
Where
a sum is paid to the Facility Agent under this Agreement for another
Party, the Facility Agent is not obliged to pay that sum to that Party
until it has established that it has actually received
it. However, the Facility Agent may assume that the sum has
been paid to it, and, in reliance on that assumption, make available to
that Party a corresponding amount. If it transpires that the
sum has not been received by the Facility Agent, that Party must forthwith
on demand by the Facility Agent refund any corresponding amount made
available to it together with interest on that amount from the date of
payment to the date of receipt by the Facility Agent at a rate reasonably
calculated by the Facility Agent to reflect its cost of
funds.
|
|
13.4
|
Currency
|
|
|
(a)
|
Unless
a Finance Document specifies that payments under it are to be made in a
different manner, the currency of each amount payable under the Finance
Documents is determined under this
Subclause.
|
|
|
(b)
|
Amounts
payable in respect of Taxes, fees, costs and expenses are payable in the
currency in which they are
incurred.
|
|
|
(c)
|
Each
other amount payable under the Finance Documents is payable in
Dollars.
|
|
13.5
|
No
set-off or counterclaim
|
|
|
All
payments made by the Owner under the Finance Documents must be calculated
and made without (and clear of any deduction for) set-off or
counterclaim.
|
|
13.6
|
Business
Days
|
|
|
(a)
|
If
a payment under the Finance Documents is due on a day which is not a
Business Day, the due date for that payment will instead be the next
Business Day in the same month (if there is one) or the preceding Business
Day (if there is not).
|
|
|
(b)
|
During
any extension of the due date for payment of any principal under this
Agreement interest is payable on that principal at the rate payable on the
original due date.
|
|
13.7
|
Payments
|
|
|
(a)
|
Subject
always to the provisions of the DPP and except to the extent otherwise
provided in any Finance Document, if any Administrative Party receives a
payment insufficient to discharge all the amounts then due and payable by
the Owner under the Finance Documents, then the Administrative Party must
apply that payment towards the obligations of the Owner under the Finance
Documents in the following order:
|
|
|
(i)
|
first, in or towards
payment or satisfaction pro rata of all costs,
charges, sales taxes, expenses and liabilities incurred and due and
payments made by the Finance Parties, the Account Bank or any receiver in
enforcing rights under the Finance Documents and/or recovering possession
of the Security Assets and all remuneration payable to the Finance Parties
for which the relevant Finance Party is entitled to be reimbursed under
the Finance Documents or any receiver under or pursuant to the Security
Documents (including, without limitation, legal expenses and reinstatement
costs) provided that, in respect of any such payment or payments payable
to the Swap Banks, the amount paid shall not exceed the Swap
Limit;
|
56
|
|
(ii)
|
secondly,
in or towards payment pro
rata of any due and unpaid fees, costs and expenses of the Finance
Parties or the Account Bank under the Finance Documents to the extent not
recovered under subparagraph (i) above provided that, in respect of
any such payment or payments payable to the Swap Banks the amount paid,
when aggregated with any amounts recovered by the Swap Banks under
subparagraph (i) above, shall not exceed the Swap
Limit;
|
|
|
(iii)
|
thirdly, in or towards
payment pro rata
of any interest on overdue amounts payable to the Finance
Parties provided that, in respect of any such payment or
payments payable to the Swap Banks the amount paid, when aggregated with
any amounts recovered by the Swap Banks under subparagraphs (i) and (ii)
above, shall not exceed the Swap
Limit;
|
|
|
(iv)
|
fourthly, in or towards
payment pro rata
of any accrued but due and unpaid interest (other than interest on overdue
amounts referred to in subclause (iii)) payable to the Finance
Parties provided that, in respect of any such payment or
payments payable to the Swap Banks the amount paid, when aggregated with
any amount
recovered by the Swap Banks under subparagraphs (i), (ii) and (iii) above,
shall not exceed the Swap
Limit;
|
|
|
(v)
|
fifthly, in or towards
payment pro rata
of:
|
|
|
(A)
|
any
due but unpaid Break Costs of the Finance Parties;
or
|
|
|
(B)
|
any
due but unpaid principal payable to the Finance
Parties,
|
|
in
each case, under the Finance Documents provided that, in respect of any
suchpayment or payments payable to the Swap Banks the amount paid, when
aggregated with any amount recovered by the Swap Banks under subparagraphs
(i), (ii), (iii) and (iv) above, shall not exceed the Swap
Limit;
|
|
|
(vi)
|
sixthly, in or towards
payment pro rata
to the Finance Parties of any other amounts which are due but unpaid by
the Owner to any of the Finance Parties under the Finance Documents in
such order as the Finance Parties shall determine provided that, in
respect of any such payment or payments payable to the Swap Banks the
amount paid, when aggregated with any amount recovered by the Swap Banks
under subparagraphs (i), (ii), (iii), (iv) and (v) above, shall not exceed
the Swap Limit;
|
|
|
(vii)
|
seventhly, any payments
due but unpaid to the Swap Banks under a Swap Agreement to the extent not
already recovered under paragraphs (i), (ii), (iii), (iv), (v) and (vi)
above; and
|
|
|
(viii)
|
after
all amounts payable or which may become payable to the Finance Parties
under the Finance Documents have been paid in full, in or towards payment
of the surplus, if any, to the Owner or other persons entitled thereto
free of any charge or other
restriction.
|
|
|
(b)
|
The
Facility Agent must, if so directed by all the Lenders, vary the order set
at subparagraphs (a)(ii) to (a)(vi) above, provided
always that to the extent that the provisions of this paragraph shall
conflict with the DPP, the provisions of the DPP shall prevail. Any
amendment or variation to any other provision of this Agreement
other than the order of payments in paragraph (a) above shall require the
prior written consent of the Owner.
|
|
|
(c)
|
This
Clause 13.7 will override any appropriation made by the
Owner.
|
|
13.8
|
Timing
of payments
|
If a
Finance Document does not provide for when a particular payment is due,
including any indemnity payment, that payment will be due within three Business
Days of demand by the relevant Finance Party.
|
14.
|
REPRESENTATIONS
AND WARRANTIES
|
|
14.1
|
Representations
and warranties
|
|
|
The
representations and warranties set out in this Clause 14 are made, unless
otherwise stated, by the Owner to the Finance
Parties.
|
57
|
14.2
|
Status
and Ownership
|
|
|
(a)
|
It
is a corporation, duly organised and validly existing under the laws of
the Xxxxxxxx Islands.
|
|
|
(b)
|
It
has the power to own its assets and carry on its business as it is being
conducted.
|
|
|
(c)
|
It
is indirectly wholly owned by the Sponsor (acting through the Parent and
the Parent Shareholder).
|
|
|
(d)
|
Subject
to the Security Documents, the Parent is the legal and beneficial owner of
all of the share capital of the Owner, the Parent Shareholder is the legal
and beneficial owner of all of the share capital of the Parent and the
Sponsor is the legal and beneficial owner of all of the share capital of
the Parent Shareholder.
|
|
|
(e)
|
No
person has any right to call for the issue or transfer of any share
capital or loan stock in the Owner other than in accordance with the
Security Documents.
|
|
|
(f)
|
All
of the shares in the capital of the Owner are fully paid
up.
|
|
14.3
|
Powers
and authority
|
It has
the power to enter into and perform, and has taken all necessary action to
authorise the entry into and performance of, the Transaction Documents to which
it is or will be a party and the transactions contemplated by those Transaction
Documents.
|
14.4
|
Legal
validity
|
|
|
(a)
|
Subject
to any general principles of law limiting its obligations, each
Transaction Document to which it is a party is its legally binding, valid
and enforceable obligation.
|
|
|
(b)
|
This
Agreement and each Transaction Document to which it is a party is in the
proper form for its enforcement in the jurisdiction of its
incorporation.
|
|
14.5
|
Non-conflict
|
The entry
into and performance by it of, and the transactions contemplated by, the
Transaction Documents to which it is a party do not conflict in any material
respect with:
|
|
(a)
|
any
law or regulation applicable to it;
|
|
|
(b)
|
its
constitutional documents; or
|
|
|
(c)
|
any
agreement or instrument which is binding upon it or any of its
assets.
|
|
14.6
|
No
Default
|
|
(a) |
No
Default is outstanding under, or will result from the entry into, or the
performance by it of any transaction contemplated by, any Transaction
Document.
|
|
|
(b)
|
There
is no outstanding material breach of any term of any Transaction Document
to which it is a party and no person has disputed, repudiated or
disclaimed liability under any Transaction Document to which it is a party
or evidenced an intention to do so.
|
|
|
(c)
|
No
other event is outstanding which constitutes a default under any document
which is binding on it or any of its assets to an extent or in a manner
which is reasonably likely to have a Material Adverse
Effect.
|
|
14.7
|
Authorisations
|
|
|
(a)
|
Under
Xxxxxxxx Islands law and the laws of any other jurisdiction where the
Owner carries on business, except for the registration of the Mortgage at
the Maltese Ships Registry, all authorisations required by it in
connection with the entry into, performance, validity and enforceability
of, and the transactions contemplated by, the Finance Documents have been
obtained or effected (as appropriate) and are in full force and effect or
will be in full force and effect at the time such authorisations are
required in such jurisdiction.
|
|
|
(b)
|
It
is not aware of:
|
|
|
(i)
|
any
reason why any Transaction Authorisation required by it will not be
obtained or effected by the time it is
required;
|
|
|
(ii)
|
any
steps to revoke or cancel any Transaction Authorisation required by it;
or
|
|
|
(iii)
|
any
reason why any Transaction Authorisation required by it will not be
renewed when it expires without the imposition of any new restriction or
condition.
|
|
14.8
|
Financial
statements
|
Its
audited financial statements (if any) most recently delivered to the Facility
Agent together with any other financial information supplied by it to the
Facility Agent:
|
|
(a)
|
have
been prepared in accordance with IFRS or US GAAP, as the case may be,
consistently applied; and
|
|
|
(b)
|
give
a true and fair view of its financial condition as at the date to which
they were drawn up,
|
except,
in each case, as disclosed to the contrary in those financial
statements.
|
14.9
|
Financial
and other information
|
In
addition, and without prejudice to, the representations made under Clause 14.8
(Financial statements), any financial and other information disclosed is
accurate and complete in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances in
which they are made, not misleading.
58
|
14.10
|
No
material adverse change
|
There has
been no material adverse change in the assets, business, condition (financial or
otherwise) or operations of the Owner since its incorporation or, following the
receipt by the Facility Agent of its audited annual financial statements, since
the date of its then latest audited annual financial statements.
|
14.11
|
Litigation
|
Except as
may already have been disclosed by the Owner in writing to the Facility Agent,
no litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency (including, but not limited to, investigative
proceedings) have been started and are current or (to the best of its knowledge
and belief) threatened in writing against the Owner which, in each case, in the
reasonable opinion of the Facility Agent acting on the instructions of the
Majority Lenders, would be likely to have a Material Adverse Effect in respect
of the Owner.
|
14.12
|
Pari
passu ranking
|
Its
payment obligations under the Finance Documents rank at least pari passu with all its other
present and future unsecured payment obligations, except for obligations
mandatorily preferred by law applying to companies generally.
|
14.13
|
Taxes
on payments
|
|
|
(a)
|
It
is not required under the law of its jurisdiction of incorporation to make
any Tax Deduction for or on account of Tax from any payment it may make
under a Finance Document.
|
|
|
(b)
|
No
claims are being, nor, as far as it is aware, might reasonably be expected
to be, asserted against it with respect to
Taxes.
|
|
14.14
|
Stamp
and registration duties
|
As at the
date of this Agreement, no stamp or registration duty or similar Tax or charge
is payable in its jurisdiction of incorporation in respect of any Transaction
Document.
|
14.15
|
Environment
|
|
|
(a)
|
The
Owner and, to the best of the Owner’s knowledge and belief (having made
due enquiry), its Environmental Affiliates are in compliance with all
material provisions of all applicable Environmental Laws in relation to
the Vessel and its operations;
|
|
|
(b)
|
The
Owner and, to the best of the Owner’s knowledge and belief (having made
due enquiry), its Environmental Affiliates have obtained or will, by the
Delivery Date, have obtained all requisite Environmental Approvals in
relation to the Vessel and its operations are and will, on the Delivery
Date and at all times thereafter be in compliance, with such Environmental
Approvals;
|
59
|
|
(c)
|
Neither
the Owner nor, to the best of the Owner’s knowledge and belief (having
made due enquiry), any of its Environmental Affiliates has received notice
of nor have issued (or threatened to issue) any Environmental Claim in
excess of US$2,500,000 or which, when aggregated with any other
Environmental Claim in relation to the Vessel or its operations in any
12-month period, exceeds US$10,000,000 in relation to the Vessel which
alleges that the Owner is not in compliance with applicable Environmental
Laws in relation to the Vessel or Environmental Approvals in relation to
the Vessel;
|
|
|
(d)
|
There
is no Environmental Claim in relation to the Vessel in excess of
US$2,500,000 or which, when aggregated with any other Environmental Claim
in relation to the Vessel and its operations, exceeds US$10,000,000
pending or, to the best of its knowledge and belief, threatened in
writing;
|
|
|
(e)
|
There
has been no Release of Hazardous Materials by or in respect of the Vessel
which could lead to an Environmental Claim in relation to the Vessel or
its operations in excess of US$2,500,000 or which, when aggregated with
any other Environmental Claim in relation to the Vessel or its operations,
exceeds US$10,000,000; and
|
|
|
(f)
|
to
the best of the Owner’s knowledge and belief (having made due inquiry),
the Charterer has obtained and is in compliance with all Environmental
Approvals required of a Charterer in connection with use of the Vessel,
and the Charterer is in compliance in all material respects with all
Environmental Laws to the extent relating to the offshore lease blocks in
which the Vessel will operate pursuant to a Drilling
Charter.
|
|
14.16
|
Security
Interests
|
No
Security Interest exists over its assets which would cause a breach of Clause
16.6 (Security Interests).
|
14.17
|
Security
Assets
|
|
|
(a)
|
Subject
to Permitted Liens and any rights of the Charterer under a Drilling
Charter, the Owner is the sole legal and beneficial owner entitled to the
Security Assets over which it has or will create any Security Interest
pursuant to the Security Documents to which it is or will be a party and
there is no agreement or arrangement, other than in the DPP, under which
it is obliged to share any proceeds of or derived from such Security
Assets with any third party.
|
|
|
(b)
|
Each
Security Document to which it is or will be a party creates or will create
first priority security interests of the type
described.
|
|
14.18
|
ISM
Code compliance
|
On the
Delivery Date the Owner and the Manager is in compliance in all material
respects with all of the mandatory requirements of the ISM Code in respect of
the Vessel.
|
14.19
|
ISPS
Code compliance
|
|
|
On
the Delivery Date the Owner and the Manager is in compliance in all
material respects with all of the mandatory requirements of the ISPS Code
in respect of the Vessel.
|
60
|
14.20
|
No
amendments to Related Contracts
|
Other
than as notified to and agreed by the Facility Agent in writing, there have been
no amendments to any of the Related Contracts (other than any amendments of a
non-material or administrative nature or a replacement of the Manager in
accordance with the provisions of this Agreement).
|
14.21
|
Money
laundering
|
Any
borrowing by the Owner and the performance of its obligations hereunder and
under the other Finance Documents to which it is a party will be for its own
account and will not involve any breach by it of any law or regulatory measure
relating to money laundering as defined in Article 1 of the Directive
(91/308/EEC) of the Council of the European Communities or any equivalent law or
regulatory measure in any other jurisdiction.
|
14.22
|
Insolvency
|
|
|
(a)
|
The
Owner is not unable or deemed unable, does not admit and has not admitted
its inability to pay its debts and has not suspended making payments on
any of its debts.
|
|
|
(b)
|
The
Owner by reason of actual or anticipated financial difficulties has not
commenced, and does not intend to commence, negotiations with one or more
of its creditors with a view to rescheduling any of its Financial
Indebtedness.
|
|
|
(c)
|
The
value of the assets of the Owner is not less than its liabilities (taking
into account contingent and prospective
liabilities).
|
|
|
(d)
|
No
moratorium has been declared in respect of any indebtedness of the Owner
during the period of six months commencing on the date this representation
is made or deemed to be repeated pursuant to Clause 14.30(a) (Times for
making representations).
|
|
14.23
|
Immunity
|
|
|
(a)
|
The
entry into by it of each Transaction Document to which it is a party
constitutes, and the exercise by it of its rights and performance of its
obligations under each such Transaction Document will constitute, private
and commercial acts performed for private and commercial
purposes.
|
|
|
(b)
|
It
will not be entitled to claim immunity from suit, execution, attachment or
other legal process in any proceedings taken in its jurisdiction of
incorporation in relation to any Transaction
Document.
|
|
14.24
|
No
adverse consequences
|
|
|
(a)
|
It
is not necessary under the laws of its jurisdiction of
incorporation:
|
61
| (i) | in order to enable a Finance Party to enforce its rights under any Finance Document; or |
|
|
(ii)
|
by
reason of the entry into of any Finance Document or the performance by it
of its obligations under any Finance
Document,
|
| that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in its jurisdiction of incorporation. |
|
|
(b)
|
No
Finance Party will be deemed to be resident, domiciled or carrying on
business in its jurisdiction of incorporation by reason only of the entry
into, performance and/or enforcement of any Finance
Document.
|
|
14.25
|
Jurisdiction/governing
law
|
|
|
(a)
|
Its:
|
|
|
(i)
|
irrevocable
submission under this Agreement to the jurisdiction of the courts of
England;
|
|
|
(ii)
|
agreement
that this Agreement is governed by English law;
and
|
|
|
(iii)
|
agreement
not to claim any immunity to which it or its assets may be
entitled,
|
are
legal, valid and binding under the laws of its jurisdiction of
incorporation.
|
|
(b)
|
Any
judgment obtained in England will be recognised and be enforceable by the
courts of its jurisdiction of incorporation, subject to any statutory or
other conditions of such
jurisdiction.
|
|
14.26
|
Anti-bribery
|
Neither
the Owner, nor anyone acting on its behalf, have been engaged or will engage in
bribery in this transaction. Neither the Owner or anyone acting on
his behalf in connection with the transaction are currently under charge in a
national court or, within a five-year period preceding the date of this
Agreement, have been convicted in a national court or been subject to equivalent
national administrative measures for violation of laws against bribery of
foreign public officials of any country or are listed on the publicly available
debarment lists of the following international financial institutions: World
Bank Group, African Development Bank, Asian Development Bank, European Bank for
Reconstruction and Development and the Inter-American Development
Bank.
|
14.27
|
No
other business
|
|
|
(a)
|
Except
as expressly contemplated by the Transaction Documents, it has not traded
or carried on any business since the date of its
incorporation.
|
|
|
(b)
|
It
does not have any Subsidiaries.
|
|
|
(c)
|
It
is not a party to any agreement other than the Transaction
Documents.
|
|
14.28
|
Shipbuilding
Contract
|
|
|
There
has been no amendment to or variations made or agreed with the Builder in
respect of the Shipbuilding Contract or the Other Shipbuilding Contract
from the date of the Shipbuilding Contract or, as the case may be, the
Other Shipbuilding Contract save for those already disclosed in writing to
the Facility Agent prior to the date hereof or approved in writing by the
Facility Agent (acting on the instructions of the Majority
Lenders).
|
62
|
14.29
|
Activities
in the Xxxxxxxx Islands
|
|
|
(a)
|
Neither
the Owner, the Parent, the Parent Shareholder nor the Sponsor or any of
their respective parents, subsidiaries or affiliates is a division,
bureau, office, agency, department, committee or political subdivision of
the jurisdiction of its incorporation or any other sovereign
jurisdiction.
|
|
|
(b)
|
Neither
the Owner, the Parent, the Parent Shareholder nor the Sponsor is engaged
in:
|
|
|
(i)
|
the
retailing, wholesaling, trading or importing of goods or services for or
with residents of the jurisdiction of its
incorporation;
|
|
|
(ii)
|
any
extractive industry in the jurisdiction of its
incorporation;
|
|
|
(iii)
|
any
regulated professional service activity in the jurisdiction of its
incorporation;
|
|
|
(iv)
|
the
export of any commodity or goods manufactured, processed, mined or made in
the jurisdiction of its incorporation;
or
|
|
|
(v)
|
the
ownership of real property in its jurisdiction of
incorporation.
|
|
|
(c)
|
Neither
the Owner, the Parent, the Parent Shareholder nor the Sponsor is doing
business in the jurisdiction of its incorporation, except that each of the
Owner, the Parent, the Parent Shareholder or the Sponsor may have its
registered office in the jurisdiction of its incorporation and maintain
its agent there.
|
|
14.30
|
Times
for making representations and
warranties
|
|
|
(a)
|
The
representations and warranties set out in this Clause 14 are made by the
Owner on the date of this Agreement and shall be deemed to be repeated on
each Utilisation Date and each date during the Post-Completion
Period.
|
|
|
(b)
|
When
a representation and warranty is repeated, it is applied to the
circumstances existing at the time of
repetition.
|
|
14.31
|
Legal
qualifications
|
The
representations and warranties set out in Clauses 14.4 (Legal validity), 14.5(a)
(Non-conflict), 14.12 (Pari passu ranking) and 14.25 (Jurisdiction/governing
law) are made by reference to any qualifications, reservations, limitations or
exceptions as to matters of law set out in the relevant legal opinions required
under this Agreement.
|
15.
|
INFORMATION
COVENANTS
|
|
15.1
|
Financial
statements
|
|
|
(a)
|
The
Owner must supply to the Facility Agent, in electronic form by email
attachment or hard copy (and, if in hard copy, in sufficient copies for
all of the Lenders), its audited financial statements for each of its
financial years ending after the date of this
Agreement.
|
63
|
|
(b)
|
The
Owner shall procure that the Sponsor shall supply to the Facility Agent
its audited consolidated financial statements for each of its financial
years ending after the date of this
Agreement.
|
|
|
(c)
|
The
Owner must supply to the Facility Agent, in electronic form by email
attachment or hard copy (and, if in hard copy, in sufficient copies for
all of the Lenders), its interim unaudited financial statements for each
quarter of each financial year ending after the date of this
Agreement.
|
|
|
(d)
|
The
Owner shall procure that the Sponsor shall supply to the Facility Agent
its interim unaudited financial statements for each quarter of each
financial year ending after the date of this
Agreement.
|
|
|
(e)
|
All
audited financial statements of the Owner and consolidated financial
statements of the Sponsor must be supplied as soon as they are available
and in any event within 150 days of the end of the relevant financial
period and all unaudited financial statements for each quarter must be
supplied as soon as they are available and in any event within 60 days of
the end of each relevant financial
period.
|
|
15.2
|
Form
of financial statements
|
|
|
(a)
|
The
Owner must ensure that each set of financial statements supplied under
Clause 15.1 of this Agreement fairly represents the relevant parties
financial condition as at the date to which those financial statements
were drawn up.
|
|
|
(b)
|
The
Owner must notify the Facility Agent of any change to the basis on which
the audited financial statements are
prepared.
|
|
|
(c)
|
If
requested by the Facility Agent, the Owner must supply or procure that the
following are supplied to the Facility
Agent:
|
|
|
(i)
|
a
full description of any change notified under paragraph (b) above;
and
|
|
|
(ii)
|
sufficient
information to enable the Facility Agent to make a proper comparison
between the financial position shown by the set of financial statements
prepared on the changed basis and its most recent audited financial
statements delivered to the Facility Agent under this
Agreement.
|
|
|
(d)
|
If
requested by the Facility Agent, the Owner must enter into discussions for
a period of not more than 30 days with a view to agreeing to any
amendments required to be made to this Agreement to place the Facility
Agent in the same position as it would have been in if the change had not
happened.
|
|
|
(e)
|
If
no agreement is reached under paragraph (d) above on the required
amendments to this Agreement, the Owner shall ensure that its auditors or,
as the case may be, the Owner specifies those amendments; the certificate
of the auditors will be, in the absence of manifest error, binding on all
the Parties.
|
64
|
15.3
|
Annual
Budget and reports
|
|
|
(a)
|
The
Owner must supply to the Facility Agent, in electronic form by email
attachment or hard copy (and, if in hard copy, in sufficient copies for
all of the Lenders), a draft Annual Budget for each financial year within
14 days of its approval by the board of directors of the Owner and at
least one month prior to the start of the relevant financial year, such
budget to be considered and, if agreed by the Majority Lenders, approved
in writing by the Facility Agent (acting reasonably) within 21 days of
receipt following which the draft Annual Budget shall become the Annual
Budget for the purposes of this Agreement. For this purpose if
any Lender fails to respond to a request to agree any such draft within 21
days it shall be deemed to have approved
it.
|
|
|
(b)
|
In
the event any draft Annual Budget is not approved by the Facility Agent,
the Facility Agent and the Owner shall consult and agree a revised Annual
Budget. If a revised Annual Budget is not agreed within 30
days, the Facility Agent (acting on the instructions of the Majority
Lenders) and the Owner shall agree to appoint a suitable expert to resolve
any disputes they may have in respect of the Annual Budget. If
the Facility Agent and Owner can not agree on an expert, the Facility
Agent will apply to the London Maritime Arbitrators Association and the
President of the London Marine Arbitrators Association shall appoint an
expert on their behalf. In each case, the written determination
of such expert in respect of any dispute, addressed to the Facility Agent
and the Owner, shall (except in the case of manifest error) be final and
binding.
|
|
|
(c)
|
Until
a revised Annual Budget has been agreed between the Owner and the Facility
Agent in accordance with this Clause 15.3, the amount of any Earnings to
be transferred from the Proceeds Account to the Operating Expenses Account
or, as the case may be, the CAPEX Account shall continue on the basis of
the current (or, as the case may be, immediately previous) Annual
Budget.
|
|
|
(d)
|
The
Owner must promptly supply to the Technical Adviser, in electronic form by
email attachment or hard copy, quarterly (or if the Facility Agent
decides, in consultation with the Owner, that a monthly report is needed,
monthly) technical reports (in the Pre-Completion Period) and quarterly
operating reports (in the Post-Completion Period) in form and substance
satisfactory to the Technical Adviser together with all such other
information and documents which the Technical Adviser reasonably requires
to perform its Workscope and its obligations under the Technical
Proposal.
|
|
|
(e)
|
The
Owner must procure that the Builder will give the Technical Adviser access
to perform periodic visits to the premises of the Builder and the
Builder’s subcontractors in order to monitor the construction of the
Vessel and the materials and components to be used in the construction of
the Vessel and that the Builder, the Manager and the Classification
Society will provide the Technical Adviser with all such other information
and documents which the Technical Adviser reasonably requires to perform
its Workscope and its obligations under the Technical
Proposal.
|
65
|
15.4
|
Access
to Books and Records
|
Upon the
request of the Facility Agent, the Owner shall provide the Facility Agent and
any of its representatives and professional advisers with access to, and permit
inspection of, its books and records, in each case at reasonable times and upon
reasonable notice.
|
15.5
|
Information
– miscellaneous
|
The Owner
must supply to the Facility Agent, in electronic form by email attachments or
hard copy (and, if in hard copy, in sufficient copies for all of the
Lenders), subject to any duty of confidentiality which it may have to third
parties (whom it will promptly approach in order to seek any necessary consents
where applicable):
|
|
(a)
|
copies
of all documents despatched by it to its creditors (other than trade
creditors) generally or any class of them at the same time as they are
despatched;
|
|
|
(b)
|
copies
of all reports provided to the Owner by the Manager pursuant to the
Management Agreement, in each case, within five (5) Business Days of
receipt of such report by the Owner and if, in the opinion of the Facility
Agent (acting reasonably), any additional technical report is necessary,
the Owner will procure such report;
|
|
|
(c)
|
as
soon as reasonably practicable on becoming aware of them, details of any
litigation, arbitration or administrative proceedings which are current,
pending or, to the best of its knowledge and belief, threatened against it
and which, in each case, would have a Material Adverse Effect (in the
opinion of the Facility Agent acting on the instructions of the Majority
Lenders);
|
|
|
(d)
|
as
soon as reasonably practicable on request, such further information, in
electronic form by email attachments or hard copy (and, if in hard copy,
in sufficient copies for all of the Lenders), regarding the financial
condition and operations of the Owner or regarding any matter relevant to,
or to any provision of, a Finance Document as the Facility Agent may
reasonably request;
|
|
|
(e)
|
as
soon as reasonably practicable on becoming aware of them, details of any
event or circumstance which is a Force Majeure
Event;
|
|
|
(f)
|
promptly
on becoming aware of them, details of any event which has a Material
Adverse Effect;
|
|
|
(g)
|
as
soon as they are available, copies of any notice of default, termination,
material dispute or claim (including notices provided by the Charterer
under the terms of a Drilling Charter) made against it under the
Shipbuilding Contract, the Drilling Charter, any Refund Guarantee or under
the Owner’s Shipbuilding Contract Guarantee or affecting the Vessel
together with details of any action it proposes to take in relation to the
same and notice of any charterhire reduction or proposed charterhire
reduction under the terms of a Drilling
Charter;
|
|
|
(h)
|
as
soon as they are available, copies of any notice of default, termination
or material claim made against it under the Management Agreement together
with details of any action
it proposes to take in relation to the same and, upon becoming aware of
the same, notification of any strikes or industrial action taken or
proposed to be taken by the Manager or its employees, subcontractors or
personnel from time to time which has or may reasonably be expected to
have a Material Adverse
Effect;
|
66
|
|
(i)
|
promptly
on becoming aware of them, details of any damage to or destruction of the
Vessel or any breakdown of any part of the Vessel, where the cost of
repair or reinstatement is likely to exceed US$10,000,000 or where the
cumulative cost of repair or reinstatement of damage to or destruction of
the Vessel during the previous six months is likely to exceed
US$10,000,000;
|
|
|
(j)
|
promptly
on becoming aware of them, details of any proposal for an amendment or
waiver of a Related Contract other than amendments or waivers of an
administrative or non-material nature;
and
|
|
|
(k)
|
upon
request by the Facility Agent, copies of all Transaction Authorisations
(if any) obtained by it.
|
|
15.6
|
Pre-Completion
period
|
|
|
(a)
|
The
Owner must promptly supply to the Facility Agent, in electronic form by
email attachments or hard copy (and, if in hard copy, in sufficient copies
for all of the Lenders) any reports received in relation to the
construction of the Vessel provided by the Builder pursuant to Article IV
paragraph 7 of the Shipbuilding
Contract.
|
|
|
(b)
|
The
Owner must promptly, upon the earlier of (i) becoming aware of the same
and (ii) the time when a prudent owner ought reasonably to have become
aware of the same, notify the Facility Agent
of:
|
|
|
(i)
|
any
breach (or attempted breach) of safety or security at the premises of the
Builder which has a Material Adverse
Effect;
|
|
|
(ii)
|
any
material claim it may have under any indemnity or provision for any
Liquidated Damages Payments under the Shipbuilding
Contract;
|
|
|
(iii)
|
any
reduction in hire payable under a Drilling Charter on account of a delay
in delivery of the Vessel to the Charterer;
and
|
|
|
(iv)
|
any
change or further change to the Scheduled Delivery
Date.
|
|
15.7
|
Notification
of Default
|
Unless
the Facility Agent has already been so notified, the Owner must notify the
Facility Agent of any Default, Potential Mandatory Prepayment Event or Mandatory
Prepayment Event (and the steps, if any, being taken to remedy it) promptly upon
becoming aware of its occurrence.
|
15.8
|
Year
end
|
|
|
The
Owner must not change its accounting period or auditors except with the
consent of the Facility Agent (acting in accordance with the instructions
of the Majority Lenders) which shall not be unreasonably withheld or
delayed.
|
67
|
15.9
|
Information
provided to be accurate
|
|
|
(a)
|
All
financial and other information provided by the Owner under or in
connection with any Finance Document at the time when given will be true
and not misleading in any material respect and will not omit any material
fact.
|
|
|
(b)
|
All
financial and other information provided by third parties on behalf of the
Owner under or in connection with any Finance Document at the time when
given will, to the best of the Owner’s knowledge and belief, be true and
not misleading in any material respect and will not omit any material
fact.
|
|
15.10
|
Charter
Termination Events
|
At all
times during the Post-Completion Period, the Owner shall (and shall procure that
the Sponsor shall) promptly advise the Facility Agent of any Charter Termination
Event of which it or they become aware.
|
15.11
|
Calculation
Certificate
|
|
|
(a)
|
At
least 15 Business Days prior to each Repayment Date, the Owner shall
deliver a duly completed Calculation Certificate to the Facility Agent
signed by two of its authorised signatories on its
behalf:
|
|
|
(i)
|
setting
out the Debt Service Cover Ratio for the most recent Calculation Period;
and
|
|
|
(ii)
|
certifying
no Default, Mandatory Prepayment Event or Potential Mandatory Prepayment
Event is outstanding or, if a Default, Mandatory Prepayment Event or
Potential Mandatory Prepayment Event is outstanding, specifying the
Default, Mandatory Prepayment Event or Potential Mandatory Prepayment
Event outstanding and the steps, if any, being taken to remedy
it.
|
|
|
(b)
|
Within
seven Business Days of receiving a Calculation Certificate, the Facility
Agent must notify the Owner whether it agrees with the Debt Service Cover
Ratio calculation set out in that Calculation Certificate, otherwise the
Facility Agent will be deemed to have accepted such Debt Service Cover
Ratio calculation.
|
|
|
(c)
|
If
the Facility Agent does not agree with the Debt Service Cover Ratio
calculation set out in a Calculation Certificate, the Facility Agent and
the Owner shall consult, in good faith, to agree the Debt Service Cover
Ratio calculation as soon as possible. If the Debt Service
Cover Ratio is not agreed within ten Business Days of notification by the
Facility Agent under paragraph (b) above, the matter will be referred to
the Owner’s auditor whose written determination, addressed to the Facility
Agent and the Owner, shall (except in the case of manifest error) be final
and binding.
|
68
|
15.12
|
Know
your customer requirements
|
|
|
(a)
|
The
Owner must promptly on the request of any Finance Party supply to that
Finance Party any documentation or other evidence which is reasonably
requested by that Finance Party (whether for itself, on behalf of any
Finance Party or any prospective new Lender) to enable a Finance Party or
prospective new Lender to carry out and be satisfied with the results of
all applicable know your customer
requirements.
|
|
|
(b)
|
Each
Lender must promptly on the request of the Facility Agent supply to the
Facility Agent any documentation or other evidence which is reasonably
required by the Facility Agent to carry out and be satisfied with the
results of all know your customer
requirements.
|
|
16.
|
GENERAL
COVENANTS
|
|
16.1
|
General
|
The Owner
agrees to be bound by the covenants set out in this Clause 16.
|
16.2
|
Authorisations
|
The Owner
must promptly:
|
|
(a)
|
obtain,
maintain and comply with the terms;
and
|
|
|
(b)
|
supply
certified copies to the Facility
Agent,
|
of any
authorisation required under any Applicable Law to enable it to perform its
obligations under, or for the validity, enforceability or admissibility in
evidence of, any Finance Document.
|
16.3
|
Compliance
with laws
|
The Owner
must comply, and the Owner must procure that the Manager complies, in all
material respects with all Applicable Laws to which it is subject.
|
16.4
|
Pari
passu ranking
|
The Owner
must ensure that its payment obligations under the Finance Documents rank at
least pari passu
with all its other present and future unsecured payment obligations, except for
obligations mandatorily preferred by law applying to companies
generally.
|
16.5
|
Disposals
|
|
|
(a)
|
The
Owner must not (other than insofar as the same may be created or effected
under the Finance Documents), either in a single transaction or in a
series of transactions and whether related or
not:
|
|
|
(i)
|
sell,
transfer or otherwise dispose of all or a substantial part of its
assets;
|
|
|
(ii)
|
sell,
transfer or otherwise dispose of any of its receivables on recourse
terms;
|
69
|
|
(iii)
|
enter
into any arrangement under which money or the benefit of a bank or other
account may be applied, set-off or made subject to a combination of
accounts; or
|
|
|
(iv)
|
enter
into any other preferential arrangement having a similar
effect,
|
in
circumstances where the transaction might have a Material Adverse
Effect.
|
|
(b)
|
Paragraph
(a) does not apply to any disposal:
|
|
|
(i)
|
made
in the ordinary course of trading on arm’s length
terms;
|
|
|
(ii)
|
of
obsolete assets; or
|
|
|
(iii)
|
of
assets (other than the Vessel) in exchange for other assets comparable or
superior as to type, value and
quality.
|
|
16.6
|
Security
Interests
|
The Owner
must not create or permit to subsist any Security Interest over any of its
assets other than Permitted Liens.
|
16.7
|
No
other business assets or Financial
Indebtedness
|
The Owner
must not:
|
|
(a)
|
engage
in any business other than the direct ownership, operation and chartering
of the Vessel or any business incidental
thereto;
|
|
|
(b)
|
cease
to carry on its business;
|
|
|
(c)
|
own
or acquire any asset other than the Vessel or any asset incidental to the
ownership, operation and chartering of the Vessel;
or
|
|
|
(d)
|
incur
any Financial Indebtedness other
than:
|
|
|
(i)
|
Financial
Indebtedness incurred or permitted under the Finance
Documents;
|
|
|
(ii)
|
any
Financial Indebtedness by way of borrowing from the Sponsor for the
purpose only of posting any cash collateral which the Owner may from time
to time be required to post under any of the Swap Agreements provided that
any such Financial Indebtedness is fully subordinated to the rights and
interests of the Finance Parties under the Finance Documents;
or
|
|
|
(iii)
|
any
Financial Indebtedness otherwise approved by the Facility Agent (acting on
the instructions of the Majority
Lenders).
|
|
16.8
|
Distributions
|
The Owner
shall not make any Distributions.
70
16.9
Place of business
The Owner
must maintain its registered office in the Xxxxxxxx Islands and keep its
corporate documents at either its registered office or at the offices of its
officers and will not voluntarily establish, or do anything as a result of which
it would be deemed to have voluntarily established, a place of business in any
country other than the Xxxxxxxx Islands.
|
16.10
|
Mergers,
guarantees and loans
|
|
|
(a)
|
The
Owner shall not enter into any amalgamation, demerger, merger or
reconstruction that might have a Material Adverse
Effect.
|
|
|
(b)
|
Save
in the ordinary course of business, the Owner must not incur or allow to
be outstanding any guarantee (including an indemnity or other assurance
against loss) (a Relevant
Guarantee) by it in respect of any person and any Relevant
Guarantee which would otherwise be permitted under this paragraph (b) will
not be permitted if the Owner’s obligations under the Relevant Guarantee
are secured by any of the Security Assets (save to the extent such
security constitutes a Permitted
Lien).
|
|
|
(c)
|
The
Owner must not be the creditor in respect of Financial Indebtedness other
than:
|
|
|
(i)
|
advances
to crew;
|
|
|
(ii)
|
in
connection with any spares or pooling arrangements (approved by the
Facility Agent (acting on the instructions of the Majority Lenders acting
reasonably)) or sale of equipment relating to the Vessel entered into by
the Owner in the ordinary course of its
business;
|
|
|
(iii)
|
deposits
placed with banks or the providers of goods and services entered into by
the Owner in the ordinary course of its business;
or
|
|
|
(iv)
|
pursuant
to its obligations to a Swap Bank under a Swap
Agreement.
|
|
|
(d)
|
The
Owner must not create any
Subsidiary.
|
|
16.11
|
Security
|
The
Owner:
|
|
(a)
|
without
prejudice to Clause 16.12(a), shall procure that the Mortgage and any
other security conferred by it under any Security Document is registered
as a first priority interest with the relevant authorities within the
period prescribed by Applicable Law and is maintained and perfected with
the relevant authorities;
|
|
|
(b)
|
shall
at its own cost do all that it can to ensure that any Finance Document
validly creates the obligations and Security Interests which it purports
to create; and
|
|
|
(c)
|
without
limiting the generality of paragraph (a) above, shall at its own cost
promptly register, file, record or enrol any Finance Document with any
relevant court or authority, pay any stamp, registration or similar tax
payable in respect of any Finance Document, give
any notice or take any other step which, in the reasonable opinion of the
Facility Agent, is or has become necessary 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.
|
71
|
16.12
|
Registration
of the Vessel
|
The Owner
shall, and shall procure that the Manager shall:
|
|
(a)
|
procure
and maintain, with effect from the Delivery Date, the valid and effective
provisional registration of the vessel and, within six (6) months, of the
Delivery Date, the valid and effective permanent registration of the
Vessel under the flag of Malta or such other flag as is satisfactory to
the Facility Agent (acting on the instructions of the Majority Lenders
(acting in good faith but otherwise in their absolute discretion)), and
shall ensure nothing is done or omitted by the Owner and shall use
reasonable endeavours to ensure that nothing is done or omitted to be done
by any third party by which the registration of the Vessel would or might
be defeated or imperilled;
|
|
|
(b)
|
not
change the name or port of registration of the Vessel without the prior
written consent of the Facility Agent (acting on the instructions of the
Majority Lenders) (such consent not to be unreasonably withheld or
delayed); and
|
|
|
(c)
|
ensure
that the Vessel complies in all respects with Applicable Laws from time to
time applicable to vessels registered under the laws and flag of Malta or
such other flag (an Alternative Flag) under
which the Vessel may be registered from time to time in accordance with
this Agreement, provided that if at any time an Alternative Flag is not a
signatory to all International Maritime Organization Assembly resolutions
and regulations to which Malta is a signatory, then the Owner shall
ensure, and shall procure that the Manager ensures, that the Alternative
Flag issues a certificate of equivalency of the Vessel in respect of each
such International Maritime Organization Assembly resolution and
regulation.
|
|
16.13
|
Classification,
maintenance and repair
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date:
|
|
(a)
|
maintain
and preserve the Vessel in good working order and repair (ordinary wear
and tear excepted), seaworthy, in efficient operating condition and, in
any event, to a standard at least equivalent to vessels managed and/or
operated by the Manager and the Sponsor’s group and the recommendations of
the Builder;
|
|
|
(b)
|
ensure
that the Vessel is surveyed from time to time as required by the
Classification Society in which the Vessel is entered at that
time;
|
|
|
(c)
|
maintain
the highest classification of the Vessel with the Classification Society
or, if such classification is not available, with the highest equivalent
classification in another internationally recognised classification
society of like standing acceptable to the Facility Agent (acting on the
instructions of the Majority Lenders), free of all overdue requirements
and overdue recommendations of that classification society or
register;
|
72
|
|
(d)
|
maintain
and keep up to date the Technical Records in English and in compliance
with all Applicable Laws relating to the Vessel and the requirements of
the Classification Society;
|
|
|
(e)
|
maintain
and keep the Software Records up to
date;
|
|
|
(f)
|
comply
in all material respects with all Software Licences and use its best
endeavours to procure that all Software Licenses are capable of
assignment;
|
|
|
(g)
|
procure
that all repairs to or replacement of any damaged, worn or lost parts or
equipment shall be effected in such manner (both as regards workmanship
and quality of materials) as not to materially diminish the value of the
Vessel or cause damage to the
Environment;
|
|
|
(h)
|
not
remove any material part of the Vessel, any part or any other material
item of equipment installed on the Vessel unless the part or item so
removed is forthwith replaced by a suitable part or item which is in the
same condition as or better condition than the part or item removed, is
free from any Security Interest or any right in favour of any person other
than the Finance Parties, and becomes on installation on the Vessel the
property of the Owner and subject to the security constituted by the
relevant Security Document(s) provided that, for the avoidance of doubt,
the Owner may install and remove equipment owned by a third party if the
equipment can be removed without any risk of damage to the Vessel or the
Environment and does not affect the class, flag or custody transfer
certification; and
|
|
|
(i)
|
without
prejudice to paragraph (h) not without prior written consent of the
Facility Agent not to be unreasonably withheld (acting on the instructions
of the Majority Lenders), cause or permit to be made any substantial
change in the structure, machinery, equipment, control systems, type or
performance characteristics of the Vessel other than modifications
required by the Classification Society or Applicable
Law.
|
|
16.14
|
Lawful
and safe operation
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date:
|
|
(a)
|
operate
the Vessel and cause the Vessel to be operated in a manner consistent in
all material respects with any Applicable
Law;
|
|
|
(b)
|
not
cause or permit the Vessel to trade with, or within the territorial waters
of, any country in which her safety may be imperilled by exposure to
terrorism;
|
|
|
(c)
|
not
cause or permit the Vessel to be employed in any manner which will or may
give rise to any reasonable degree of likelihood that the Vessel would be
liable to arrest, requisition, confiscation, forfeiture, seizure,
destruction or condemnation as
prize;
|
|
|
(d)
|
not
cause or permit the Vessel to be employed in any trade or business which
is forbidden by Applicable Law or is illicit or in carrying goods which
are illicit or prohibited under any Applicable
Law;
|
|
|
(e)
|
in
the event of hostilities in any part of the world (whether war be declared
or not) not cause or permit the Vessel to be carrying any contraband goods
and/or trading in any zone
after it has been declared a war zone by any authority or by any of the
Vessel’s war risks Insurers unless the Vessel’s Insurers shall have
confirmed to the Owner that the Vessel is held covered under the
Obligatory Insurances or under a government scheme that gives comparable
protection for the voyage(s) in question;
and
|
73
|
|
(f)
|
not
charter the Vessel with any foreign country or national of any foreign
country which is the subject of sanctions imposed by the United Nations or
is specified by legislation or regulations of the flag state under which
the Vessel is registered and such that, if the earnings or any part of the
earnings were derived from such charter, that fact would render any
Finance Document or the security conferred by the Security Documents
unlawful.
|
|
16.15
|
Repair
of the Vessel
|
Save in
circumstances where the Insurers have agreed to cover the cost of the work or
where the Owner has demonstrated to the satisfaction of the Facility Agent that
adequate reserves or security are at the relevant time maintained or provided
for, the Owner shall not, and shall procure that the Manager shall not, at any
time after the Delivery Date put the Vessel into the possession of any person
for the purpose of work being done upon her beyond the amount of US$15,000,000
or equivalent), other than for classification or scheduled dry docking, unless
such person shall have given an undertaking to the Facility Agent not to
exercise any lien on the Vessel or Obligatory Insurances for the cost of that
work or otherwise.
|
16.16
|
Arrests
and Liabilities
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date:
|
|
(a)
|
pay
and discharge all obligations and liabilities whatsoever which have given
or may give rise to liens (other than Permitted Liens) on or claims
enforceable against the Vessel and take all reasonable steps to prevent a
threatened arrest of the Vessel;
|
|
|
(b)
|
notify
the Facility Agent promptly in writing of the levy or other distress on
the Vessel or its arrest, detention, seizure, condemnation as prize,
compulsory acquisition or requisition for title or use and (save in the
case of compulsory acquisition or requisition for title or use or any
other event that would, with the passage of time, constitute a Total Loss
of the Vessel) obtain the release of the Vessel within twenty-one (21)
days;
|
|
|
(c)
|
pay
and discharge when due all dues, taxes, assessments, governmental charges,
fines and penalties lawfully imposed on or in respect of the Vessel or the
Owner except those which are being disputed in good faith by appropriate
proceedings (and for the payment of which adequate reserves or security
are at the relevant time maintained or provided or for which indemnity or
liability insurance cover for at least the full amount in dispute has been
obtained by the Owner from underwriters or insurance companies approved by
the Facility Agent (acting on the instructions of the Majority Lenders
acting reasonably)) and provided that the continued existence of such
dues, taxes, assessments, governmental charges, fines or penalties does
not give rise to any reasonable degree of likelihood that the Vessel would
be liable to arrest, requisition, confiscation, forfeiture, seizure,
destruction or condemnation as prize;
and
|
74
|
|
(d)
|
pay
and discharge all other obligations and liabilities whatsoever in respect
of the Vessel and the Obligatory Insurances except those which are being
disputed in good faith by appropriate proceedings (and for the payment of
which adequate reserves or security are at the relevant time maintained or
provided or for which indemnity or liability insurance cover for at least
the full amount in dispute has been obtained by the Owner from
underwriters or insurance companies approved by the Facility Agent (acting
on the instructions of the Majority Lenders (acting reasonably)) and
provided that the continued existence of those obligations and liabilities
in respect of the Vessel and the Obligatory Insurances does not give rise
to any reasonable degree of likelihood that the Vessel would be liable to
arrest, requisition, confiscation, forfeiture, seizure, destruction or
condemnation as prize and provided always that the Vessel remains properly
managed and insured at all times in accordance with the terms of this
Agreement.
|
|
16.17
|
Related
Contracts
|
The Owner
shall:
|
|
(a)
|
exercise
its rights and comply with its material obligations under each Finance
Document and Related Contract to which it is a
party;
|
|
|
(b)
|
not
without the consent of the Facility Agent (acting on the instructions of
the Majority Lenders acting
reasonably):
|
|
|
(i)
|
make
or enter into (and shall procure that the Sponsor and the Manager shall
not make or enter into) any amendments, changes or variations to, or
assign, transfer, terminate, suspend or abandon any of the Related
Contracts (and to the extent necessary it will withhold its consent to any
such amendment, assignment, transfer, termination, suspension or
abandonment) other than an amendment, change or variation of a
non-material or administrative nature (and, for the avoidance of doubt,
any amendments, changes or variations to the Shipbuilding Contract which
would or may delay the Delivery Date by 3 months or more would in all
cases be deemed a “material” amendment, change or
variation);
|
|
|
(ii)
|
take
any action, enter into any document or agreement or omit to take any
action or to enter into any document or agreement which a reasonable
shipowner in the position of the Owner could reasonably be expected to
know should be taken or entered into which, in any such case, would cause
any Related Contract to be terminated or to cease to remain in full force
and effect and shall use all reasonable endeavours to procure that each
other party to any Related Contract does not take any action, enter into
any document or agreement or omit to take any action or to enter into any
document or agreement which would, or could reasonably be expected to,
cause any Related Contract to cease to remain in full force and
effect;
|
|
|
(iii)
|
release
the Builder or the Charterer from any of its material obligations under
the Shipbuilding Contract or the Drilling Charter, as the case may be;
or
|
|
|
(iv)
|
permit
(and will procure that no Other Owner shall permit) any amendments,
changes or variations to, or assignments, transfers, termination,
suspension or abandonment
of any of the Other Shipbuilding Contract (and to the extent necessary it
will procure the Other Owner will withhold its or their consent to any
such amendment, change, variation, assignment, transfer, termination,
suspension or abandonment) other than an amendment of a non-material or
administrative nature; and
|
75
|
|
(c)
|
not
exercise its rights under Article I paragraph 5 of the Shipbuilding
Contract to approve any relevant subcontractor under the Shipbuilding
Contract without the Facility Agent’s (acting on the instructions of the
Majority Lenders) prior written
consent.
|
|
16.18
|
Environment
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date:
|
|
(a)
|
comply
in all material respects with all applicable Environmental Laws and
Environmental Approvals including, without limitation, requirements
relating to the establishment of financial responsibility (and shall
require that all Environmental Affiliates of the Owner comply in all
material respects with all applicable Environmental Laws and obtain and
comply with all required Environmental Approvals, insofar as such
Environmental Laws and Environmental Approvals relate to the Vessel or her
operation or her carriage of
cargo);
|
|
|
(b)
|
comply
in all material respects with its obligations under and in accordance with
health and safety requirements of a Drilling Charter;
and
|
|
|
(c)
|
promptly
upon becoming aware notify the Facility Agent
of:
|
|
|
(i)
|
any
Environmental Claim in excess of US$2,500,000 which is current or, to its
knowledge, pending or threatened against it or any Environmental Affiliate
relating to the Vessel or her operation or her carriage of cargo;
or
|
|
|
(ii)
|
any
fact or circumstances reasonably likely to give rise to an Environmental
Claim in excess of US$2,500,000 against it or any Environmental Affiliate
relating to the Vessel or her operation or her carriage of cargo;
or
|
|
|
(iii)
|
any
suspension, revocation or modification of any Environmental Approval
obtained by the Owner, the Manager or the Charterer relating to the Vessel
or her operation or her carriage of cargo;
or
|
|
|
(iv)
|
any
Release of Hazardous Materials by or in respect of the Vessel or caused by
the Vessel or its operations which could lead to an Environmental Claim in
excess of US$250,000,
|
and in
each case such notification shall take the form of a certificate of an officer
of the Owner or of the Owner’s agents specifying in reasonable detail the nature
of the event or circumstances.
|
16.19
|
Information
regarding the Vessel
|
|
(a)
|
The
Owner shall upon becoming aware of the same, and shall procure that the
Manager shall upon the earlier of (i) becoming aware of the same and (ii)
the time when a prudent manager ought reasonably to have become aware of
the same, at all times after the Delivery
Date:
|
|
|
(i)
|
promptly
notify the Facility Agent of the occurrence of any accident, casualty or
other event which has caused or resulted in or may cause or result in the
Vessel being or becoming a Total
Loss;
|
76
|
|
(ii)
|
promptly
notify the Facility Agent of any requirement or recommendation made by any
Insurer or the Classification Society or by any competent authority which
is not complied with in a timely manner, disregarding any matter which
cannot reasonably be considered to be
material;
|
|
|
(iii)
|
promptly
notify the Facility Agent of any intended dry-docking of the Vessel
(whether routine or otherwise);
|
|
|
(iv)
|
promptly
notify the Facility Agent of any claim for a material breach of the ISM
Code being made in connection with the Vessel or its
operation;
|
|
|
(v)
|
promptly
notify the Facility Agent of any claim for a material breach of the ISPS
Code being made in connection with the Vessel or its
operation;
|
|
|
(vi)
|
give
to the Facility Agent from time to time on request such information, in
electronic form by email attachments or hard copy, as the Facility Agent
may reasonably require regarding the Vessel, its employment, position and
engagements or regarding the Obligatory
Insurances;
|
|
|
(vii)
|
provide
the Facility Agent with copies of the classification certificate of the
Vessel and of all periodic damage or survey reports on the Vessel which
the Facility Agent may reasonably
request;
|
|
|
(viii)
|
promptly
notify the Facility Agent when a condition of class is applied by the
Classification Society;
|
|
|
(ix)
|
promptly
notify the Facility Agent if the Vessel is detained by any port,
governmental or quasi-governmental
authority;
|
|
|
(x)
|
promptly
notify the Facility Agent if the flag state or the Classification Society
refuse to issue or withdraw any trading
certification;
|
|
|
(xi)
|
promptly
notify the Facility Agent of any fire on board the Vessel which requires
the use of fixed fire systems;
|
|
|
(xii)
|
promptly
notify the Facility Agent of any collision or grounding of the
Vessel;
|
|
|
(xiii)
|
promptly
notify the Facility Agent if the Vessel is taken under tow other than in
respect of the routine operation of the
Vessel;
|
|
|
(xiv)
|
promptly
notify the Facility Agent of any death or serious injury to any person
which occurs on board the Vessel;
|
77
|
|
(xv)
|
subject
to any applicable restriction under a Drilling Charter give to the
Facility Agent and its duly authorised representatives (at their own risk
and expense) reasonable access to the Vessel but without interruption to
her use or operation for the purpose of conducting on board inspections
and/or surveys of the Vessel and the Technical
Records;
|
|
|
(xvi)
|
if
the Facility Agent reasonably believes an Event of Default may have
occurred and is continuing, procure that the Facility Agent and its duly
authorised representatives shall upon request be granted the right to
inspect the records kept in respect of the Vessel by the Classification
Society; and
|
|
|
(xvii)
|
if
the Facility Agent reasonably believes an Event of Default may have
occurred and is continuing, furnish to the Facility Agent from time to
time upon reasonable request certified copies of the ship’s log in respect
of the Vessel.
|
|
|
(b)
|
The
Owner shall, upon becoming aware of the same, during the Pre-Delivery
Period, notify the Facility Agent of any accident, casualty or other event
which has caused or resulted in or may cause or result in the Vessel as it
is then constructed becoming a Total Loss or being reasonably considered
as beyond economic repair.
|
|
16.20
|
Management
|
The Owner
shall procure at all times after the Delivery Date that the Vessel is managed by
the Manager (except with the prior written consent of the Facility Agent (acting
on the instructions of the Majority Lenders acting reasonably)).
|
16.21
|
Proceeds
from sale or Total Loss of the
Vessel
|
|
|
(a)
|
The
Owner shall procure that the proceeds from a sale or Total Loss of the
Vessel (and during the Pre-Delivery Period, any proceeds from the Vessel
under construction or buyer’s supplies being deemed a total loss or being
reasonably considered beyond economic repair) shall promptly upon receipt
by the Owner be paid to the Security Trustee for application in accordance
with clause 10 of the DPP.
|
|
|
(b)
|
For
so long as the Owner holds any such proceeds as referred to in
paragraph (a), it shall do so on trust for the Security
Trustee.
|
|
|
(c)
|
The
Owner will not sell or agree to sell the Vessel and will procure that the
Sister Owner will not sell or agree to sell the Sister Vessel unless the
Owner can demonstrate to the Facility Agent to its satisfaction
that:
|
|
|
(i)
|
the
Owner will upon such sale have sufficient funds to repay the Loans in full
and all other amounts outstanding hereunder in the case of the sale of the
Vessel or under Clause 6.3 (Mandatory prepayment amount – Sister Vessel)
in the case of a sale of the Sister Vessel;
and
|
|
|
(ii)
|
in
the case of the Sister Vessel, the Owner will upon such sale be in
compliance with the Leverage Ratio.
|
78
|
16.22
|
Charters
|
|
|
(a)
|
The
Owner shall not let the Vessel on demise, time, consecutive voyage or
voyage charter for any period or to any person other than to a Charterer
under a time charter party (a Drilling Charter) in
terms satisfactory to the Facility Agent (acting on the instructions of
the Majority Lenders) with an Approved Charterer and with an Approved
Rate.
|
For the
purposes of this paragraph (a):
Approved
Charterer means any counterparty approved by the Facility Agent (acting
on the instructions of all of the Lenders) and which, unless otherwise agreed by
the Facility Agent (acting on the instructions of all of the Lenders), is not on
negative watch and has (or who provides a Charterer Parent Guarantee by its
Holding Company which is not on negative watch and which has) a rating of BBB or
higher from Xxxxx’x or a rating of Baa3 or higher from
S&P;
Approved
Rate means a time charter party in respect of which:
|
|
(i)
|
for
a time charter period of 2 years or more (but less than 3 years), the
daily rate on its own results in a minimum annual projected Net Cash Flow
of US$116,000,000 and the minimum daily rate is
US$545,000;
|
|
|
(ii)
|
for
a time charter period of 3 years or more (but less than 5 years), the
daily rate on its own results in a minimum annual projected Net Cash Flow
of US$129,000,000 and the minimum daily rate is US$550,000;
or
|
|
|
(iii)
|
for
a time charter period of 5 years or more, the daily rate on its own
results in a minimum annual projected Net Cash Flow of US$116,000,000 and
the minimum daily rate is
US$510,000.
|
and the
amount projected to be the Net Cash Flow will be as estimated by the Owner and
the Manager and approved by the Facility Agent.
|
|
(b)
|
The
Owner shall procure that at the same time as entering into any Drilling
Charter it shall:
|
|
|
(i)
|
enter
into a deed of assignment of time charter and earnings on terms
substantially in the form of the Charter Assignment (and shall procure
that any notices and acknowledgements thereto are duly executed by the
relevant parties to them) and enter into and shall procure that the
relevant Charterer shall enter into a Charterer Direct Agreement;
and
|
|
|
(ii)
|
provide
a tax opinion from its tax advisers (which may be disclosed to the Finance
Parties) in respect of potential withholding and income tax payable under
the Transaction Documents in form and substance satisfactory to each of
the Finance Parties.
|
|
|
(c)
|
The
Owner shall, at least twelve (12) months prior to the expiry date
(howsoever described) of any Drilling
Charter:
|
79
|
|
(i)
|
procure
that a replacement Drilling Charter is entered into having a minimum term
(excluding any optional extensions) of 2
years;
|
|
|
(ii)
|
execute
a deed of assignment of time charter and earnings in substantially the
same form as the Charter Assignment and shall procure that any notices and
acknowledgements thereto are duly executed by the relevant parties to them
and that it and any replacement charterer shall execute a Charterer Direct
Agreement; and
|
|
|
(iii)
|
provide
an updated tax opinion from its tax advisers (which may be disclosed to
the Finance Parties) in respect of potential withholding and income tax
payable under the Transaction Documents in form and substance satisfactory
to each of the Finance Parties.
|
|
|
(d)
|
The
Owner shall not:
|
|
|
(i)
|
allow
the Vessel to be sub-chartered by any Charterer without the consent of the
Facility Agent not to be unreasonably withheld (acting on the instructions
of the Majority Lenders); or
|
|
|
(ii)
|
permit
any transfer of Charterer’s rights and obligations under a Drilling
Charter without the prior written consent of the Facility Agent (acting on
the instructions of all of the
Lenders).
|
|
16.23
|
Breach
or Termination of Drilling Charter or Management
Agreement
|
|
|
(a)
|
In
the event of the occurrence at any time during the Post-Completion Period
of (i) one of the events described in Clauses 6.2(e) or 6.2(f) which would
otherwise give rise to an immediate Mandatory Prepayment Event or (ii) an
Event of Default set out in Clauses 18.6 (Insolvency), 18.7 (Insolvency
proceedings), 18.8 (Creditors’ process), 18.9 (Cessation of
business), 18.10 (Failure to pay final judgment) and 18.11 (Material
adverse change) in respect of the Charterer or the Manager only, then,
subject to the conditions set out in Clause 16.23(b) below, no Mandatory
Prepayment Event or Event of Default shall immediately arise and the Owner
shall have the opportunity to cure the relevant default, breach or event
(including by proposing a substitute charterer or manager) for a period of
three (3) months from the date the relevant event or Event or Default
occurs or, if later, the date that a prudent owner could reasonably be
expected to have become aware of the occurrence of the relevant event or
Event of Default (provided always that for the purposes of this paragraph
(a), the Owner shall in any event be deemed to have become aware of the
relevant event or Event of Default within thirty (30) days of the
occurrence of such event or Event of Default) (the Cure
Period);
|
|
|
(b)
|
The
right of the Owner to effect a cure and the postponement of the relevant
Mandatory Prepayment Event or Event of Default (as the case may be)
pursuant to Clause 16.23(a) above shall be available only
if:
|
|
|
(i)
|
there
is no other Default existing at the time when the relevant event or Event
of Default referred to in Clause 16.23(a) arises and no such other Default
occurs at any time during the Cure Period;
and
|
80
|
|
(ii)
|
any
substitute charterer or manager and/or substitute charter or management
agreement proposed by the Owner as the means of effecting a cure satisfies
the terms and conditions of Clause 16.22 (in the case of a substitute
charterer and/or charter) and the terms and conditions of Clause 16.24 (in
the case of a substitute manager and/or management agreement);
and
|
|
|
(iii)
|
the
Owner procures that on the earlier of (i) the time at which Owner becomes
aware of the occurrence of an Event of Default or the relevant event, or
(ii) 30 days after the occurrence of an Event of Default or the relevant
event referred to in Clause 16.23(a), there is deposited into the Debt
Service Reserve Account such additional amount as will ensure that the
balance standing to the credit of the Debt Service Reserve Account
following such deposit is equal to at least the amount required to pay the
aggregate amount of interest and principal repayments accruing under this
Agreement during the period of nine (9) months following the date of such
deposit. The Owner shall not be entitled to use any funds then standing to
the credit of any of the Accounts to effect such
deposit.
|
|
|
(c)
|
If
the Owner proposes to enter into a substitute charter or substitute
management agreement, the Owner shall, in relation to a substitute
charter, comply fully with all of the provisions of Clause 16.22 and, in
relation to a substitute management agreement, the Owner shall, upon the
execution of the substitute management agreement, execute a security
assignment of such substitute management agreement together with all
notices and acknowledgements thereto all in the same form (mutatis mutandis) as
the then existing security over the Management Agreement or otherwise in
form and substance satisfactory to the Majority
Lenders.
|
|
|
(d)
|
For
the avoidance of doubt, should any of the conditions set out in Clause
16.23(b) not be, or cease to be, met, or should the Owner not effect a
cure of the relevant breach, default or event within the Cure Period, the
relevant Mandatory Prepayment Event or, as the case may be, Event of
Default shall immediately arise and the Finance Parties shall be all of
the rights flowing therefrom.
|
|
|
(e)
|
If
the Owner effects a cure of the relevant breach, Event of Default or other
event within the Cure Period pursuant to this Clause 16.23, the Owner may
withdraw any such additional amount deposited into the Debt Service
Reserve Account in accordance with Clause
16.23(b)(iii).
|
|
16.24
|
Management
Agreement
|
The Owner
shall ensure that the Management Agreement in respect of the Vessel remains in
full force and effect until the Final Maturity Date with the Manager or such
other counterparty approved by the Facility Agent (acting on the instructions of
the Majority Lenders). The Management Agreement shall contain provisions
obliging the Manager to supervise the construction of the Vessel on behalf of
the Owner.
|
16.25
|
ISM
Code
|
The Owner
shall, and shall procure that the Manager shall:
81
| (a) |
at
all times after the Delivery Date comply, and be responsible for
compliance by itself and by the Vessel, with the mandatory requirements of
the ISM Code;
|
|
|
(b)
|
at
all times after the Delivery Date ensure that the Vessel has a valid
Safety Management Certificate (or, following delivery until a final
certificate is issued, a valid interim Safety Management Certificate)
which is held on board the Vessel and that the Manager holds a valid
Document of Compliance for the Vessel, a copy of which is held on board
the Vessel;
|
|
|
(c)
|
promptly
notify the Facility Agent of any actual or, upon becoming aware of the
same, threatened withdrawal of an applicable Safety Management Certificate
or Document of Compliance;
|
|
|
(d)
|
promptly
notify the Facility Agent of the identity of the person ashore designated
for the purposes of paragraph 4 of the ISM Code and of any change in the
identity of that person; and
|
|
|
(e)
|
promptly
upon becoming aware of the same notify the Facility Agent of the
occurrence of any accident or major non-conformity requiring action under
the ISM Code.
|
|
16.26
|
ISPS
Code
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date comply and be responsible for compliance by itself and by the Vessel with
the mandatory requirements of the ISPS Code, and ensure that the Vessel has a
valid International Ship Security Certificate.
|
16.27
|
Delivery
of Vessel
|
If the
Owner is required by the terms of the Shipbuilding Contract to accept delivery
of the Vessel from the Builder, then the Owner will exercise all rights it has
under the Drilling Charter in place at such time to require the Charterer to
take delivery of the Vessel under such Drilling Charter.
|
16.28
|
Construction
supervision
|
|
|
(a)
|
The
Owner shall give to the Facility Agent and the Technical Adviser notice of
any meetings of the Owner or the Owner’s representatives with the Builder
or between the Owner or the Owner’s representatives and any Charterer or
the Charterer’s representatives where material divergence from the
Specification (as defined in the Shipbuilding Contract) is being
discussed. Following any such meeting, the Owner shall notify the Facility
Agent and the Technical Adviser of the outcome of such meeting. Such
advance notice and notice of the outcome shall be contained in the
quarterly technical reports referred to in Clause
15.3(d).
|
|
|
(b)
|
The
Owner shall make reasonable efforts to obtain the Builder’s consent so
that the Facility Agent (at the Facility Agent’s own risk and expense) or
its representative has a right to attend, in a capacity as an observer
only, the shipyard on an occasional basis and to be present at the sea
trials and first drill trial of the
Vessel.
|
|
|
(c)
|
The
Owner will give reasonable notice to the Facility Agent of the time and
location of any of the meetings, trials and voyages referred to in
paragraph (b) above.
|
82
|
16.29
|
Construction
Milestones
|
|
|
(a)
|
Project
milestone for Instalment Loan 2:
|
|
|
●
|
start
of steel cutting for the Vessel
|
|
|
(b)
|
Project
milestones for Instalment Loan 3:
|
|
|
●
|
start
of keel laying for Vessel
|
|
|
(c)
|
Project
milestones for Delivery Loan:
|
|
|
●
|
tender
of Vessel for Delivery
|
|
16.30
|
Tax
affairs
|
The Owner
must:
|
|
(a)
|
promptly
file all Tax reports and returns required to be filed by it in any
jurisdiction; and
|
|
|
(b)
|
promptly
pay all Taxes or, if any Tax is being contested in good faith and by
appropriate means, ensure an adequate reserve is set aside for payment of
that Tax.
|
|
16.31
|
Annex
VI (Regulations for the Prevention of Air Pollution from Ships) to
MARPOL
|
The Owner
shall, and shall procure that the Manager shall, at all times after the Delivery
Date comply and be responsible for compliance by itself and by the Vessel with
mandatory requirements of Annex VI (Regulations for the Prevention of Air
Pollution from Ships) to MARPOL, and ensure that the Vessel has a valid
International Air Pollution Prevention Certificate.
|
16.32
|
Oil
Pollution Act
|
For so
long as the Vessel is operated in the territorial waters of the United States of
America, the Owner shall and/or shall procure the Charterer shall, comply with
the requirements of all mandatory United States laws, regulations and
requirements (including United States Coastguard regulations applicable to the
Vessel and including for the avoidance of doubt any requirement to have a valid
and current Certificate of Financial Responsibility pursuant to the United
States Oil Pollution Act 1990) in relation to the operation and navigation of
the Vessel in force at the relevant time in the relevant area(s) of the United
States of America.
|
16.33
|
Leverage
Ratio
|
|
|
(a)
|
The
Owner will not permit the Leverage Ratio from time to time to be lower
than 125 per cent, such Leverage Ratio to be tested as provided in
paragraph (c) below.
|
83
|
|
(b)
|
If
on any determination date the Leverage Ratio is less than 125 per cent,
the Owner will immediately following a request of the Facility Agent to do
so:
|
|
|
(i)
|
prepay
such amount of the Loans as will ensure that the Leverage Ratio is not
less than or equal to 125 per cent;
or
|
|
|
(ii)
|
provide
or cause to be provided to the Facility Agent such additional funds into
the Debt Service Reserve Account as is necessary to bring the Leverage
Ratio equal to or not less than 125 per cent;
or
|
|
|
(iii)
|
provide
such additional security, in all respects satisfactory to the Facility
Agent (acting on the instructions of the Majority Lenders), such that the
Leverage Ratio is not less than or equal to 125 per
cent.
|
For the
purposes of determining the Leverage Ratio, the additional security shall have
attributed to it such value as the Facility Agent (acting on the instructions of
the Majority Lenders) determines or in the case of additional security
constituted by cash, its full value.
|
|
(c)
|
The
Facility Agent shall be entitled to test such Leverage Ratio as
of:
|
|
|
(i)
|
the
Final Completion Date;
|
|
|
(ii)
|
each
anniversary thereof;
|
|
|
(iii)
|
upon
the notice of the Sister Owner of its intention to sell a Vessel;
and
|
|
|
(iv)
|
at
any time on notice from the Facility Agent after the occurrence of a
Default which is continuing.
|
|
|
(d)
|
The
Owner will procure a valuation on the basis described in the definition of
Market Value on or before (but dated not more than thirty (30) days prior
to) the date on which Leverage Ratio is to be calculated or in the case of
paragraph (c) (i) promptly on demand and provide such valuation to the
Facility Agent who will verify such valuation by reference to the
information provided by the Owner.
|
|
|
(e)
|
The
Owner will procure in favour of the Facility Agent and the Approved
Brokers, all such information, as they may reasonably (having regard to
the use and operation of the Vessel) require in order to effect such
valuations.
|
|
|
(f)
|
All
valuations shall be at the expense of the
Owner.
|
|
16.34
|
Sponsor’s
shares
|
The Owner
shall procure at all times during the Security Period that the shares of the
Sponsor will remain listed on NASDAQ.
|
17.
|
INSURANCES
|
|
17.1
|
Scope
of Obligatory Insurances
|
84
|
|
The
Owner shall:
|
|
|
(a)
|
report
on and monitor the Builder’s compliance with the Construction Insurances
as detailed in Article XVII of the Shipbuilding Contract and report on and
confirm its compliance with the terms of the Construction Insurances in
respect of the Vessel and the equipment the subject of the Shipbuilding
Contract and the Buyer Supplies (as such term is defined in the
Shipbuilding Contract). The Owner shall procure that its Buyer
Supplies are insured for all risks of physical loss or damage as is
typically insured, and that the Owner is insured for protection and
indemnity risks during sea trials either under the Builder’s insurance
policy or, if this is not possible, the Owner shall have protection and
indemnity insurance effective from the commencement of the sea trials for
an amount not less than US$300,000,000 (the amount to be reviewed and
mutually agreed to be reduced if the Owners’ liability during the sea
trials is less than the above amount). The Owner shall also have general
third party liability insurance effective from the commencement of the sea
trials for not less than US$25,000,000 to the extent such insurance policy
will be available;
|
|
|
(b)
|
at
all times after the Delivery Date keep the Vessel insured in the Required
Insurance Amount, with a deductible of no more than US$15,000,000, in
Dollars against fire and usual marine risks (including Excess Risks), and
if requested by the Facility Agent all spares, stores and other property
held elsewhere than on the Vessel against all risks of physical loss or
damage as is typically insured, in each case in the name of the Owner and
with the interest of the Security Trustee noted as mortgagee or assignee
with underwriters or insurance companies approved by the Facility Agent
and (as applicable) through brokers approved by the Facility Agent (acting
on the instructions of the Majority Lenders), and by policies in form and
content approved by the Facility Agent (acting on the instructions of the
Majority Lenders);
|
|
|
(c)
|
at
all times after the Delivery Date keep the Vessel insured in at least the
Required Insurance Amount in the same manner as above against war risks
(including, without limitation), (a) those risks covered by the standard
form of English marine policy with Institute War and Strike Clauses (Time)
(1/10/83) attached or similar cover and (b) war, terrorist or similar
protection and indemnity risks cover excluded from the protection and
indemnity risks covered by the entry of the Vessel with the relevant
protection and indemnity association by reason of any exclusion clauses
contained in such entry, and all spares, stores, and other property held
elsewhere than on the Vessel against, at the minimum, riots, strikes,
civil commotion and terrorism, in each case
either:
|
|
|
(i)
|
with
underwriters or insurance companies approved by the Facility Agent (acting
on the instructions of the Majority Lenders) and by policies in form and
content approved by the Facility Agent (acting on the instructions of the
Majority Lenders); or
|
|
|
(ii)
|
by
entering the Vessel in an approved war risks
association;
|
|
|
(d)
|
at
all times after the Delivery Date keep, or procure the Charterer keeps the
Vessel entered in an approved protection and indemnity association against
all risks as are normally covered by such protection and indemnity
association, including without limitation, pollution risks, the proportion
not recoverable in case of collision under the running
down clause inserted in the ordinary Hull and Machinery policies and
Specialist Operations coverage, in the name of the Owner for claims which
the Owner would have incurred had they been pursued against it, such cover
to be for:
|
85
|
|
(i)
|
the
higher of the minimum amount stipulated in any Drilling Charter and
US$500,000,000 or such other amount of cover against P&I including
pollution risks as shall at any time be comprised in the basic entry of
the Vessel with either a protection and indemnity association which is a
member of either the International Group of P&I Clubs (or any
successor organisation designated by the Facility Agent for this purpose);
or
|
|
|
(ii)
|
if
the International Group or any such successor ceases to exist or ceases to
provide or arrange any cover for pollution risks (or any supplemental
cover for pollution risks over and above that afforded by the basic entry
of the Vessel with its protection and indemnity association), such
aggregate amount of cover against pollution risks as shall be generally
available on the open market and by basic entry with a protection and
indemnity association for ships of the same type, size, age and flag as
the Vessel,
|
provided
that, if the Vessel has ceased trading or is in lay up and in either case has
unloaded all cargo, the level of pollution risks cover afforded by ordinary
protection and indemnity cover available through a member of the International
Group or such successor organisation or, as the case may be, on the open market
in such circumstances shall be sufficient for such purposes;
|
|
(e)
|
at
all times following the Final Completion Date, maintain in full force and
effect loss of hire insurance, on a daily amount fixed and agreed basis,
in respect of the Vessel subject to a deductible of 45 days (or minimum
deductible available by loss of hire underwriters) per incident or
occurrence and for a minimum indemnity period of 180 days with
underwriters or insurance companies approved by the Facility Agent (acting
on the instructions of the Majority Lenders) in form and content approved
by the Facility Agent (acting on the instructions of the Majority
Lenders), provided always that the obligation of the Owner to maintain
such loss of hire insurance shall cease if a prudent owner of a vessel
similar to the Vessel and employed on a similar basis, acting reasonably,
would consider the cost of the loss of hire insurance to be commercially
unacceptable;
|
|
|
(f)
|
at
all times following the Final Completion Date, if and as requested from
time to time by the Facility Agent, to maintain in full force and effect
insurance(s) in respect of such other matters of whatsoever nature and
howsoever arising in respect of which insurance would be available to a
prudent owner of the Vessel; and
|
|
|
(g)
|
comply
or procure compliance with the terms and conditions of the Obligatory
Insurances (including, but not limited to, making any declarations
required by such insurances in order to maintain cover for operating
within any waters where it is required to be located under a Drilling
Charter, which declarations the Owner shall promptly copy to the Facility
Agent), not do, consent to or permit any act or omissions which might
invalidate or render unenforceable the whole or any part of the
Insurances.
|
|
17.2
|
Mortgagee’s
interest and additional perils
insurances
|
86
|
|
The
Facility Agent shall be entitled, from time to time and at the Owner’s
cost and expense, to effect from the Delivery Date, maintain and renew all
or any of the following insurances in the Required Insurance Amount, and
on such terms, through such insurers and in such manner as the Facility
Agent (acting on the instructions of the Majority Lenders) may from time
to time consider appropriate:
|
|
|
(a)
|
a
mortgagee’s interest marine insurance providing for the indemnification of
the Finance Parties for any Losses under or in connection with any Finance
Document which directly or indirectly result from loss of or damage to the
Vessel or a liability of the Vessel or the Owner, being a loss or damage
which is prima
facie covered by an Obligatory Insurance but in respect of which
there is a non-payment (or reduced payment) by the underwriters by reason
of, or on the basis of any allegation
concerning:
|
|
|
(i)
|
any
act or omission on the part of the Owner, of any operator or manager of
the Vessel or of any officer, employee or agent of the Owner or of any
such person, including any breach of warranty or condition or any
non-disclosure relating to such Obligatory
Insurance;
|
|
|
(ii)
|
any
act or omission, whether deliberate, negligent or accidental, or any
knowledge or privity of the Owner or any other person referred to in
subparagraph (i) above, or of any officer, employee or agent of an Owner
or of such a person, including the casting away or damaging of the Vessel
and/or the Vessel being unseaworthy;
and/or
|
|
|
(iii)
|
any
other matter capable of being insured against under a mortgagee’s interest
marine insurance policy whether or not similar to the foregoing;
and
|
|
|
(b)
|
a
mortgagee’s interest additional perils policy providing for the
indemnification of the Finance Parties against, amongst other things, any
Losses or other consequences of any Environmental Claim, including the
risk of expropriation, arrest or any form of detention of the Vessel, or
the imposition of any Security Interest over the Vessel and/or any other
matter capable of being insured against under a mortgagee’s interest
additional perils (pollution) policy whether or not similar to the
foregoing.
|
|
17.3
|
Obligatory
Insurances
|
Without
prejudice to its obligations under Clause 17.1 (Scope of Obligatory Insurances),
the Owner shall:
|
|
(a)
|
not
without the prior consent of the Facility Agent (acting on the
instructions of the Majority Lenders) alter any Obligatory Insurance nor
make, do, consent or agree to any act or omission which would or might
render any Obligatory Insurance invalid, void, voidable or unenforceable
or render any sum paid out under any Obligatory Insurance repayable in
whole or in part;
|
|
|
(b)
|
not
cause or permit the Vessel to be operated in any way inconsistent with the
provisions or warranties of, or implied in, or outside the cover provided
by, any Obligatory Insurance or to be engaged in any voyage or to carry
any cargo not permitted by any Obligatory
Insurances;
|
87
|
|
(c)
|
duly
and punctually pay all premiums, calls, contributions or other sums of
money from time to time payable in respect of any Obligatory
Insurance;
|
|
|
(d)
|
at
least 28 days before the relevant policies, contracts or entries expire,
notify the Facility Agent of the names of the insurance companies and/or
the war risks and protection and indemnity associations proposed to be
employed for the purposes of the renewal of such Obligatory Insurances and
of the amounts in which such Obligatory Insurances are proposed to be
renewed and the risks to be covered, and to procure that appropriate
instructions for the renewal of such Obligatory Insurances on the terms so
specified are given to the brokers (if applicable) and associations in
each case approved in accordance with Clause 17.1 (Scope of Obligatory
Insurances) and will at least three Business Days before such expiry (or
within such shorter period as the Facility Agent may from time to time
agree) confirm in writing to the Facility Agent that such renewals have
been effected in accordance with the instructions so
given;
|
|
|
(e)
|
forthwith
upon the effecting of any Obligatory Insurance, ensure that all approved
brokers (if applicable) and/or approved insurers and the approved P&I
Club provide the Facility Agent with pro forma copies of all policies
relating to the Obligatory Insurances which they are to effect or renew
and of a letter or letters of undertaking substantially in the forms
scheduled to or referred to in the Delivery General Assignment or such
other form acceptable to the Facility Agent, in each case stating the full
particulars (including the dates and amounts) of the insurance, and on
request produce the receipts for each sum paid by it pursuant to
paragraph (c) above, and including undertakings from the approved
brokers (if applicable) or the approved underwriters or insurance
companies that:
|
|
|
(i)
|
they
will have endorsed on each policy, when issued, a loss payee provision and
notice of assignment, in the form scheduled to the Delivery General
Assignment;
|
|
|
(ii)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Security Trustee;
|
|
|
(iii)
|
they
will advise the Facility Agent forthwith of any material change to the
terms of the Obligatory Insurances;
|
|
|
(iv)
|
they
will upon written application by the approved brokers (if applicable) to
the Facility Agent notify the Facility Agent, not less than 28 days before
the expiry of the Obligatory Insurances, in the event of their not having
received notice of renewal instructions from the Owner or its agents and,
in the event of their receiving instructions to renew, they will promptly
notify the Facility Agent of the terms of the
instructions;
|
|
|
(v)
|
they
will not exercise any rights of cancellation in respect of default in
payment of premiums without giving the Facility Agent 28 days’ notice in
writing, either by letter or electronically transmitted message, and a
reasonable opportunity for the Facility Agent to pay any premiums
outstanding;
|
|
|
(vi)
|
if
any of the Obligatory Insurances form part of a fleet cover, their lien on
the fleet policies shall be confined to the outstanding premiums due on
the Vessel only;
|
88
|
|
(vii)
|
they
shall neither set off against any claim(s) and/or returns of premium(s) in
respect of the Vessel any premiums due in respect of other vessels under
the fleet cover or any premiums due for other insurances, nor cancel the
insurance for reason of non-payment of premiums for other vessels under
the fleet cover or of premiums for such other insurances;
and
|
|
|
(viii)
|
they
will arrange for a separate policy to be issued in respect of the Vessel
forthwith upon being so requested by the Facility
Agent;
|
|
|
(f)
|
not
settle, release, compromise or abandon any claim in respect of any Total
Loss unless the Facility Agent (acting promptly and on the instructions of
the Majority Lenders, acting reasonably) is satisfied that such release,
settlement, compromise or abandonment will not prejudice the interests of
the Finance Parties under or in relation to any Finance
Document;
|
|
|
(g)
|
arrange
for the execution and delivery of such guarantees as may from time to time
be required by any protection and indemnity or war risks club or
association in accordance with the rules of such club or
association;
|
|
|
(h)
|
procure
that the interest of the Security Trustee as mortgagee or assignee is
noted on all policies of insurance;
and
|
|
|
(i)
|
in
the event that the Owner receives payment of any moneys under the Delivery
General Assignment in respect of Insurances, save as provided in the loss
payable clauses scheduled to the Delivery General Assignment, forthwith
pay over the same to the Security Trustee and, until paid over, such
moneys shall be held in trust for the Security Trustee by the
Owner.
|
|
17.4
|
Power
of Facility Agent to insure
|
If the
Owner fails to effect and keep in force Obligatory Insurances in accordance with
this Agreement, it shall be permissible, but not obligatory, for the Facility
Agent to effect and keep in force insurance or insurances, for itself or on
behalf of the Security Trustee, in the amounts required under this Agreement and
(in the case of Clause 17.1(d) (Scope of Obligatory Insurances) only) entries in
a protection and indemnity association or club and, if it deems necessary or
expedient, to insure the war risks upon the Vessel, and the Owner shall
reimburse the Facility Agent for the costs of so doing. The Facility
Agent agrees to notify the Owner if it effects any such insurance or insurances
in respect of the Vessel as soon as practicable and in any event no later than
five Business Days after effecting such insurances.
|
18.
|
DEFAULT
|
|
18.1
|
Events
of Default
|
Each of
the events or circumstances set out in this Clause 18 is an Event of Default,
provided always that:
|
|
(a)
|
the
events referred to in Clauses 18.6 to 18.11 shall not, in respect of the
Builder, constitute an Event of Default
if:
|
89
|
|
(i)
|
the
relevant event is remedied to the satisfaction of the Facility Agent
(acting on the instructions of the Majority Lenders) and on terms (and
with replacement security) approved by the Facility Agent (acting on the
Instructions of the Majority Lenders);
or
|
|
(ii)
|
the Builder is substituted by another builder satisfactory to the Facility Agent (acting on the instructions of the Majority Lenders) and on terms (and with replacement security) approved by the Facility Agent (acting on the Instructions of the Majority Lenders), |
in each
case by a date that falls three (3) months after the occurrence of the relevant
event; and
|
|
(b)
|
the
events referred to in Clauses 18.6 to 18.11 shall not, in respect of the
Charterer or Manager, constitute an Event of Default if a substitute
charterer or substitute manager is appointed, or the relevant event is
otherwise cured by the Owner, in accordance with Clause
16.23.
|
|
18.2
|
Non-payment
|
The Owner
or the Sponsor does not pay on the due date any amount payable by it under the
Finance Documents in the manner required under the Finance Documents, unless the
non-payment:
|
|
(a)
|
is
caused by technical or administrative error;
and
|
|
|
(b)
|
where
such payment is a scheduled payment, is remedied within one Business Day
of the due date; or
|
|
|
(c)
|
where
such payment is on-demand, is remedied within three Business Days of the
date of demand.
|
|
18.3
|
Breach
of other obligations
|
The Owner
or the Sponsor does not comply with any other terms of the Finance Documents to
which it is a party or the Sponsor does not comply with any of its obligations
under the Finance Documents to which it is a party, unless the
non-compliance:
|
|
(a)
|
is
capable of remedy; and
|
|
|
(b)
|
is
remedied within 30 days of the earlier of the Facility Agent giving notice
of the breach to the Owner and the Owner or the Sponsor, as the case may
be, becoming aware of the non-compliance, save in the case of the Owner’s
non-compliance with:
|
|
|
(i)
|
Clause
16.11(a) (Security), Clause 16.12(a) (Registration of the Vessel), Clauses
16.22(b) (Charters) and 16.22(c) (Charters), Clause 16.24 (Management
Agreement) (save to the extent Clause 16.23 (Breach or Termination of
Drilling Charter or Management Agreement) applies) or Clause 17.1 (Scope
of Obligatory Insurances), for each of which the grace period for remedy
shall be three days from the date the Facility Agent gives
notice of the breach to the Owner,
provided always that, in respect of Clause 17.1 (Scope of Obligatory
Insurances) and clause 7.14 (Financial Covenants) of the Sponsor
Construction and Post-Delivery Guarantee, there shall be no grace period
unless the Facility Agent (acting on the good faith and reasonable
instructions of the Majority Lenders) is satisfied that the Finance
Parties have neither suffered nor will, in the future, suffer any material
detriment (whether financial, to their security position or otherwise
howsoever) as a result of the non-compliance;
or
|
|
|
(ii)
|
Clause
16.23 (Breach or Termination of Drilling Charter or Management Agreement)
for which there shall be no grace period for remedy following expiry of
the grace period provided in that Clause
16.23.
|
90
|
18.4
|
Misrepresentation
|
A
representation or warranty made or repeated by the Owner or the Sponsor in any
Finance Document or in any document delivered by or on behalf of the Owner or
the Sponsor under any Finance Document is incorrect or misleading in any
material respect when made or deemed to be repeated, unless the circumstances
giving rise to the misrepresentation or breach of warranty:
|
|
(a)
|
are
capable of remedy; and
|
|
|
(b)
|
are
remedied within 14 days of the Owner or, as the case may be, the Sponsor
receiving notice from the Facility Agent of the circumstances giving rise
to the misrepresentation or breach of
warranty.
|
|
18.5
|
Cross-default
|
|
|
(a)
|
Any
Sister Event of Default occurs and is continuing;
or
|
|
|
(b)
|
Any
of the following occurs in respect of any of the Project
Parties:
|
|
|
(i)
|
any
of its Financial Indebtedness is not paid when due (after the expiry of
any originally applicable grace
period);
|
|
|
(ii)
|
any
of its Financial Indebtedness:
|
|
|
(A)
|
becomes
prematurely due and payable;
|
|
|
(B)
|
is
placed on demand; or
|
|
|
(C)
|
is
capable of being declared by or on behalf of a creditor to be prematurely
due and payable or of being placed on
demand,
|
| in each case, as a result of an event of default or any provision having a similareffect (howsoever described) and after the expiry of any applicable grace period (if any); or |
|
|
(iii)
|
any
commitment for its Financial Indebtedness is cancelled or suspended as a
result of an event of default (howsoever
described),
|
|
|
unless
the aggregate amount of Financial Indebtedness falling within paragraphs
(i) to (iii) above is less than US$2,500,000 or its equivalent in the case
of the Owner or the Sponsor orUS$10,000,000 or its equivalent in the case
of, the Builder, the Charterer Parent (if any) or the
Charterer.
|
91
|
18.6
|
Insolvency
|
Any of
the following occurs in respect of any of the Project Parties:
|
|
(a)
|
it
is, or is deemed for the purposes of any relevant applicable law to be,
unable to pay its debts as they fall due or
insolvent;
|
|
|
(b)
|
it
admits its inability to pay its debts as they fall
due;
|
|
|
(c)
|
it
suspends making payments on any of its debts or announces an intention to
do so;
|
|
|
(d)
|
by
reason of actual or anticipated financial difficulties, it begins
negotiations with any creditor for the rescheduling or restructuring of
any of its indebtedness;
|
|
|
(e)
|
the
value of its assets is less than its liabilities (taking into account
contingent and prospective liabilities);
or
|
|
|
(f)
|
a
moratorium is declared in respect of any of its Financial Indebtedness;
or
|
|
|
(g)
|
any
similar local law process not described in (a) to (f)
above.
|
If a
moratorium occurs in respect of any such person, the ending of the moratorium
will not remedy any Event of Default caused by the moratorium.
|
18.7
|
Insolvency
proceedings
|
|
|
(a)
|
Except
as provided in paragraph (b) below, any of the following occurs in respect
of any of the Project Parties:
|
|
|
(i)
|
any
step is taken with a view to a moratorium, composition, assignment or
similar arrangement with any of its
creditors;
|
|
|
(ii)
|
a
meeting of its shareholders, directors or other officers is convened for
the purpose of considering any resolution to petition for or to file
documents with a court or any registrar for its winding-up, administration
or dissolution or any such resolution is
passed;
|
|
|
(iii)
|
any
person presents a petition or files documents with a court for its
winding-up, administration or dissolution or reorganisation (by way of
voluntary arrangement, scheme of arrangement or
otherwise);
|
|
|
(iv)
|
any
Security Interest is enforced over any of its
assets;
|
|
|
(v)
|
an
order for its winding-up, administration or dissolution is
made;
|
|
|
(vi)
|
any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, receiver and manager, judicial manager,
administrator or similar officer is appointed in respect of it or any of
its assets;
|
|
|
(vii)
|
its
directors, shareholders or other officers request the appointment of, or
give notice of their intention to appoint a liquidator, trustee in
bankruptcy, judicial custodian, judicial manager, receiver and manager,
compulsory manager, receiver, administrative receiver, receiver and
manager, administrator or similar officer;
or
|
92
|
|
(viii)
|
any
other analogous step or procedure is taken in any
jurisdiction.
|
|
|
(b)
|
Paragraph
(a) above does not apply to a frivolous or vexatious petition for
winding-up presented by a creditor which is being contested in good faith
and with due diligence and is discharged or struck out within 14
days.
|
|
18.8
|
Creditors’
process
|
Any
attachment, sequestration, distress, execution or analogous event affects any
asset(s) of any of the Project Parties having an aggregate value of at least
US$2,500,000 or its equivalent in the case of the Owner or the Sponsor or at
least US$10,000,000 or its equivalent in the case of the Builder, Charterer
Parent or the Charterer and in any case is not discharged within 14
days.
|
18.9
|
Cessation
of business
|
Any of
the Project Parties ceases, or threatens to cease, to carry on
business.
|
18.10
|
Failure
to pay final judgment
|
Any of
the Project Parties fails to comply with or pay any sum in excess of
US$2,500,000 or its equivalent in the case of the Owner or the Sponsor or at
least US$10,000,000 or its equivalent in the case of the Builder, Charterer
Parent (if any) or the Charterer and in either case due from it under any final
judgment or any final order made or given by any court of competent jurisdiction
within the period specified in the relevant judgment or if no period is
specified within 14 days of such final judgment being issued.
|
18.11
|
Material
adverse change
|
Any event
or series of events occurs affecting the financial condition or operation of any
of the Project Parties which, in the opinion of the Majority Lenders, has a
Material Adverse Effect.
|
18.12
|
Litigation
|
Any
litigation, arbitration or administrative proceedings (other than proceedings of
a frivolous or vexatious nature which are being contested in good faith and for
which adequate reserves or security are at the relevant time maintained or
provided or for which indemnity or liability insurance cover for at least the
full amount in dispute has been obtained by the Owner or the relevant person
from underwriters or insurance companies that have been approved by the Facility
Agent (acting on the instructions of the Majority Lenders acting reasonably))
are current or, to the knowledge of the Owner or the Finance Parties, pending or
threatened against any person which in the opinion of the Majority Lenders have,
or if adversely determined are reasonably likely to have, a Material Adverse
Effect.
93
|
18.13
|
Liability
of Lenders and Administrative
Parties
|
|
|
(a)
|
Any
event occurs or circumstance arises in relation to the Vessel which
results in any person making an Environmental Claim against any Finance
Party and such Finance Party has not been indemnified by a person and on
terms satisfactory to the relevant Finance Party in respect of such amount
within fifteen days after the date on which such Environmental Claim is
made provided such Finance Party gives prompt notice of such claim to the
Owner and has afforded the Owner (at its cost and expense) the right (with
full cooperation of such Finance Party) to such action as it considers
necessary or appropriate (acting reasonably) to defend or contest in its
own name the validity or amount of such claim. The Owner may
defend or contest the validity or amount of such claim in the name of the
relevant Finance Party if such Finance Party is (acting in its absolute
discretion) satisfied that:
|
|
|
(i)
|
such
action has a reasonable chance of success and in reaching this conclusion
such Finance Party shall have the right to require the Owner to obtain (at
the cost of the Owner) the opinion of Queen’s Counsel concerning the
merits of the claim. Counsel shall be selected and instructed
by the legal advisers to the Finance Party
concerned;
|
|
|
(ii)
|
such
Finance Party is satisfied that such claim will not materially damage its
reputation or any part of its business affairs;
and
|
|
|
(iii)
|
the
scope of the provisions of Clause 23.2 (Other indemnities) will indemnify
the relevant Finance Party against any and all costs, losses, expenses or
liabilities arising as a result of the Owner defending or contesting the
validity or amount of the claim in the name of that Finance
Party.
|
|
|
(b)
|
Any
event occurs or circumstance arises in relation to the ownership or
operation of the Vessel which results in criminal liability being imposed
on any Finance Party except where such liability arises out of the gross
negligence or wilful misconduct of such Finance
Party.
|
|
18.14
|
Unlawful
performance
|
It is, or
it becomes, unlawful for the Owner or the Sponsor to perform any of its
obligations under the terms of the Transaction Documents.
|
18.15
|
Debt
Service Cover Ratio
|
The Debt
Service Cover Ratio is determined to be less than 1.1:1 for any Calculation
Period.
|
18.16
|
Acceleration
|
|
(a)
|
If
an Event of Default is outstanding, the Facility Agent may (and if the
Majority Lenders so instruct it, shall), by notice to the
Owner:
|
|
|
(i)
|
cancel
the undrawn, uncancelled amount of the Commitments;
and/or
|
|
|
(ii)
|
declare
that all or part of any amounts outstanding under the Finance Documents
are:
|
|
|
(A)
|
immediately
due and payable; and/or
|
|
|
(B)
|
payable
on demand by the Facility Agent.
|
Any
notice given under this Clause 18.16 will take effect in accordance with its
terms.
|
|
(b)
|
The
Owner hereby agrees that for the purposes of this Agreement service by the
Facility Agent of a notice under and in accordance with paragraph (a)
above shall constitute a valid and effective service of such notice and
the Owner shall be deemed to have become liable to make any payments
expressed in that notice upon service of such
notice.
|
94
|
19.
|
SECURITY
|
|
19.1
|
General
|
The
provisions of clause 2 and clause 3 of the DPP apply in respect of the
appointment, office and function of the Security Trustee.
|
19.2
|
Parallel
Debt
|
|
|
(a)
|
For
the purposes of the Greek Security, the Owner hereby irrevocably and
unconditionally undertakes to pay to the Security Trustee amounts equal to
any amounts owing by the Owner to the relevant Secured Parties
under the Finance Documents as and when the same fall due for payment
thereunder, so that the Security Trustee shall be the obligee of such
covenant to pay and shall be entitled to claim performance thereof in its
own name and not as agent acting on behalf of the relevant Secured
Parties. The Owner and the Security Trustee acknowledge that for this
purpose such obligations of the Owner are several and are separate and
independent from, and without prejudice to, the identical obligations
which the Owner has to the Secured Parties under the relevant Finance
Documents, provided that this shall not result in the Owner incurring an
aggregate obligation to any such Secured Parties under the Finance
Documents. To this end and without prejudice to the foregoing, it is
agreed that:
|
|
|
(i)
|
the
amounts due and payable by the Owner under this Clause 19.2 (the Parallel Debt) shall be
decreased to the extent that the Owner has paid any amounts to the Secured
Parties or any of them in respect of the Secured Liabilities and vice
versa; and
|
|
|
(ii)
|
the
Parallel Debt shall not exceed the aggregate of the corresponding
obligations which the Owner has to the Secured Parties under the Finance
Documents.
|
|
(b)
|
Nothing
in this Clause shall in any way negate, affect or increase the obligations
of the Owner to any Secured Party under the Finance Documents in respect
of the Secured Liabilities. For the purpose of this Clause, the Security
Trustee acts in its own name and on behalf of itself and not as agent or
representative of any other party hereto and any security granted to the
Security Trustee to secure the Parallel Debt is granted to the Security
Trustee in its capacity as creditor of the Parallel Debt and solely for
the purpose referred to above.
|
|
19.3
|
Greek
Security
|
|
|
(a)
|
The
Security Trustee shall obtain any Security Interest provided under or
pursuant to a Security Document governed by Greek law (the Greek Security) in its
own name.
|
|
|
(b)
|
The
Security Trustee shall have full and unrestricted entitlement to and
authority in respect of the Greek Security, provided that it
shall be under an obligation to exercise such rights (and perform such
obligations) in accordance with the contractual undertakings set out in
any Finance Document.
|
95
|
20.
|
THE
ADMINISTRATIVE PARTIES
|
|
20.1
|
Appointment
and duties of the Facility Agent
|
|
|
(A)
|
Each
Lender and Administrative Party (other than the Facility Agent)
irrevocably appoints the Facility Agent to act as its agent under and in
connection with the Finance
Documents.
|
|
|
(b)
|
Each
Lender and Administrative Party irrevocably authorises the Facility Agent
to:
|
|
|
(i)
|
perform
the duties and to exercise the rights, powers and discretions that are
specifically given to it under the Finance Documents, together with any
other incidental rights, powers and discretions;
and
|
|
|
(ii)
|
execute
each Finance Document expressed to be executed by the Facility
Agent.
|
|
|
(c)
|
The
Facility Agent has only those duties which are expressly specified in the
Finance Documents. Those duties are solely of a mechanical and
administrative nature. For the avoidance of doubt, those duties
do not extend to any administration or other work which might result from
any Lender transferring any of its rights and obligations under the
Finance Documents to any person. Any such administration or
other work shall be undertaken by the
transferee.
|
|
20.2
|
Role
of the Mandated Lead Arranger
|
Except as
specifically provided in the Finance Documents, the Mandated Lead Arranger has
no obligations of any kind to any other Party in connection with any Finance
Document.
|
20.3
|
No
fiduciary duties
|
Except as
specifically provided in a Finance Document, nothing in the Finance Documents
makes an Administrative Party a trustee or fiduciary for any other Party or any
other person, and no Administrative
Party needs to hold in trust any moneys paid to or recovered by it for a Party
in connection with the Finance Documents or be liable to account for interest on
those moneys.
|
20.4
|
Individual
position of an Administrative Party
|
|
|
(a)
|
If
it is also a Lender, each Administrative Party has the same rights and
powers under the Finance Documents as any other Lender and may exercise
those rights and powers as though it were not an Administrative
Party.
|
|
|
(b)
|
Each
Administrative Party may:
|
|
|
(i)
|
carry
on any business with the Owner, the Sponsor, the Charterer or the Sponsor
or its related entities (including acting as an agent or a trustee for any
other financing); and
|
|
|
(ii)
|
retain
any profits or remuneration it receives under the Finance Documents or in
relation to any other business it carries on with the Owner or its related
entities.
|
96
|
20.5
|
Reliance
|
The
Facility Agent may:
|
|
(a)
|
rely
on any notice or document believed by it to be genuine and correct and to
have been signed by, or with the authority of, the proper
person;
|
|
|
(b)
|
rely
on any statement made by any person regarding any matters which may
reasonably be assumed to be within its knowledge or within its power to
verify;
|
|
|
(c)
|
engage,
pay for and rely on professional advisers selected by it;
and
|
|
|
(d)
|
act
under the Finance Documents through its personnel and
agents.
|
|
20.6
|
Majority
Lenders’ instructions
|
|
|
(a)
|
The
Facility Agent is fully protected if it acts on the valid instructions of
the Majority Lenders in the exercise of any right, power or discretion or
any matter not expressly provided for in the Finance
Documents. Any such instructions given by the Majority Lenders
will be binding on all the Lenders. In the absence of
instructions, unless the Finance Documents expressly provide that the
Facility Agent acts on the instructions of the Majority Lenders or all of
the Lenders in exercising the relevant right, power or discretion, the
Facility Agent may act or refrain from acting as it considers to be in the
best interests of all the Lenders.
|
|
|
(b)
|
The
Facility Agent may assume that unless it has received notice to the
contrary, any right, power, authority or discretion vested in any Party or
the Majority Lenders has not been
exercised.
|
|
|
(c)
|
The
Facility Agent may require the receipt of security satisfactory to it,
whether by way of payment in advance or otherwise, against any liability
or loss which it may incur in complying with the instructions of the
Majority Lenders and may refrain from acting in accordance
with the instructions of the Majority Lenders (or, if appropriate, the
Lenders) until it has received security satisfactory to it, whether by way
of payment in advance or otherwise, against any liability or loss which it
may incur in complying with the
instructions.
|
|
|
(d)
|
The
Facility Agent is not authorised to act on behalf of a Lender (without
first obtaining that Lender’s consent) in any legal or arbitration
proceedings in connection with any Finance
Document.
|
|
20.7
|
Responsibility
|
|
|
(a)
|
No
Administrative Party is responsible to any other Finance Party for the
adequacy, accuracy or completeness of any Finance Document or any other
document or any statement or information (whether written or oral) made or
supplied in connection with any Finance
Document.
|
|
|
(b)
|
No
Administrative Party is responsible for the legality, validity,
effectiveness, adequacy, completeness or enforceability of any Finance
Document or any other document.
|
|
|
(c)
|
Without
affecting the responsibility of the Owner for information supplied by it
or on its behalf in connection with any Finance Document, each Lender
confirms that it:
|
|
|
(i)
|
has
made, and will continue to make, its own independent appraisal of all
risks arising under or in connection with the Finance Documents (including
the financial condition and affairs of the Owner, the Sponsor, the
Charterer or the Sponsor and its related entities and the nature and
extent of any recourse against any Party, the Sponsor, the Charterer or
the Sponsor or its assets); and
|
|
|
(ii)
|
has
not relied exclusively on any information provided to it by any
Administrative Party in connection with any Finance
Document.
|
97
|
20.8
|
Exclusion
of liability
|
|
|
(a)
|
The
Facility Agent is not liable or responsible to any other Lender or
Administrative Party for any action taken or not taken by it in connection
with any Finance Document, unless directly caused by its gross negligence
or wilful misconduct.
|
|
|
(b)
|
No
Party (other than the relevant Administrative Party) may take any
proceedings against any officers, employees or agents of another
Administrative Party in respect of any claim it might have against that
Administrative Party or in respect of any act or omission of any kind by
that officer, employee or agent in connection with any Finance Document.
Any officer, employee or agent of an Administrative Party may rely on this
Clause 20.8 and enforce its terms under the Contracts (Rights of Third
Parties) Xxx 0000.
|
|
|
(c)
|
The
Facility Agent is not liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance
Documents to be paid by the Facility Agent if the Facility Agent has taken
all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or
settlement system used by the Facility Agent for that
purpose.
|
|
|
(d)
|
Nothing
in this Agreement will oblige any Administrative Party to satisfy any know
your customer requirement in relation to the identity of any person on
behalf of any Finance Party.
|
|
|
(e)
|
Each
Finance Party confirms to each Administrative Party that it is solely
responsible for any know your customer requirements it is required to
carry out and that it may not rely on any statement in relation to those
requirements made by any other
person.
|
|
20.9
|
Default
|
|
|
(a)
|
The
Facility Agent is not obliged to monitor or enquire whether a Default has
occurred. The Facility Agent is not deemed to have knowledge of
the occurrence of a Default.
|
|
|
(b)
|
If
the Facility Agent:
|
|
|
(i)
|
receives
notice from a Party or any other party to a Transaction Document referring
to this Agreement, describing a Default and stating that the event is a
Default; or
|
|
|
(ii)
|
is
aware of the non-payment of any principal or interest or any fee payable
to a Finance Party (other than the Facility Agent or any of the Mandated
Lead Arranger) under this
Agreement,
|
it must
promptly notify the Finance Parties.
|
20.10
|
Information
|
|
|
(a)
|
The
Facility Agent must promptly forward to the person concerned the original
or a copy of any document which is delivered to the Facility Agent by a
Party for that person.
|
|
|
(b)
|
Except
where a Finance Document specifically provides otherwise, the Facility
Agent is not obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another
Party.
|
|
|
(c)
|
Except
as provided above, the Facility Agent has no
duty:
|
|
|
(i)
|
either
initially or on a continuing basis to provide any Lender with any credit
or other information concerning the risks arising under or in connection
with the Finance Documents (including any information relating to the
financial condition or affairs of the Owner or any of its related entities
or the nature or extent of recourse against any Party or its assets)
whether coming into its possession before, on or after the date of this
Agreement; or
|
|
|
(ii)
|
unless
specifically requested to do so by a Lender in accordance with a Finance
Document, to request any certificate or other document from the
Owner.
|
|
|
(d)
|
In
acting as the Facility Agent, the agency division of the Facility Agent is
treated as a separate entity from its other divisions and
departments. Any information acquired by the Facility Agent
which, in its opinion, is acquired by it otherwise than in its capacity
as
|
98
|
|
the
Facility Agent may be treated as confidential by the Facility Agent and
will not be treated as information possessed by the Facility Agent in its
capacity as such.
|
|
|
(e)
|
The
Owner irrevocably authorises the Facility Agent to disclose to the other
Finance Parties any information which is received by it in its capacity as
the Facility Agent, subject always to the requirements of confidentiality
under Clause 28 (Disclosure of
Information).
|
|
|
(f)
|
The
Facility Agent is not obliged to disclose to any person any confidential
information supplied to it by or on behalf of the Owner solely for the
purpose of evaluating whether any waiver or amendment is required in
respect of any term of the Finance
Documents.
|
|
20.11
|
Indemnities
|
|
|
(a)
|
Without
limiting the liability of the Owner under the Finance Documents, each
Lender shall indemnify the Facility Agent for that Lender’s Pro Rata Share
of any loss or liability incurred by the Facility Agent in acting as the
Facility Agent (including without limitation any costs associated with
effecting, maintaining or renewing any insurances in accordance with and
subject to Clause 17.4 (Power of Facility Agent to insure) and acting in
accordance with the instructions of the Majority Lenders in accordance
with Clause 20.6 (Majority Lenders’ instructions)) unless the Facility
Agent has been reimbursed by the Owner under a Finance Document, except to
the extent that the loss or liability is caused by the Facility Agent’s
gross negligence or wilful
misconduct.
|
|
|
(b)
|
If
a Party owes an amount to the Facility Agent under the Finance Documents,
the Facility Agent may after giving notice to that
Party:
|
|
|
(i)
|
deduct
from any amount received by it for that Party any amount due to the
Facility Agent from that Party under a Finance Document but unpaid;
and
|
|
|
(ii)
|
apply
that amount in or towards satisfaction of the owed
amount.
|
That
Party will be regarded as having received the amount so deducted.
|
20.12
|
Compliance
|
Each
Administrative Party may refrain from doing anything (including disclosing any
information) which might, in its opinion, constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person, and may do
anything which, in its opinion, is necessary or desirable to comply with any law
or regulation.
|
20.13
|
Resignation
of the Facility Agent
|
|
|
(a)
|
The
Facility Agent may resign and appoint any of its Affiliates as
successor Facility Agent by giving 30 days’ notice to the other Finance
Parties and the Owner.
|
|
|
(b)
|
Alternatively
the Facility Agent may resign by giving written notice to the Finance
Parties and the Owner, in which case the Majority Lenders may appoint a
successor Facility Agent.
|
99
|
|
(c)
|
If
no successor Facility Agent has been appointed under paragraph (b) above
within 30 days after notice of resignation was given, the Facility Agent
may appoint a successor Facility
Agent.
|
|
|
(d)
|
The
resignation of the Facility Agent and the appointment of any successor
Facility Agent will both become effective only when the successor Facility
Agent (i) notifies all the Parties that it accepts its appointment and
(ii) confirms that it is satisfied that the rights under the Security
Documents and the DPP have been assigned or transferred to
it. On giving the notification and confirmation, the successor
Facility Agent will succeed to the position of the Facility Agent and the
term Facility Agent will mean the successor Facility
Agent.
|
|
|
(e)
|
The
retiring Facility Agent must, at its own cost, make available to the
successor Facility Agent such documents and records and provide such
assistance as the successor Facility Agent may reasonably request for the
purposes of performing its functions as the Facility Agent under the
Finance Documents.
|
|
|
(f)
|
Upon
its resignation becoming effective, this Clause will continue to benefit
the retiring Facility Agent in respect of any action taken or not taken by
it in connection with the Finance Documents while it was the Facility
Agent, and, subject to paragraph (e) above, it will have no further
obligations in its capacity as Facility Agent under any Finance
Document.
|
|
|
(g)
|
The
Majority Lenders may, by notice to the Facility Agent, require it to
resign under paragraph (b) above.
|
|
|
(h)
|
Any
successor Facility Agent will be located or have a branch in London,
Luxembourg or New York and the Facility Agent or, as the case may be, the
Mandated Lead Arranger will consult with the Owner in relation to the
identity of such successor Facility
Agent.
|
|
20.14
|
Relationship
with Lenders
|
|
|
(a)
|
The
Facility Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and as acting through its Facility Office(s) unless
it has received not less than five Business Days prior notice in writing
from that Lender to the contrary.
|
|
|
(b)
|
The
Facility Agent may at any time, and must if requested to do so by the
Majority Lenders, convene a meeting of the
Lenders.
|
|
|
(c)
|
The
Facility Agent must keep a record of all the Parties and supply any other
Party with a copy of the record on request. The record will include each
Lender’s Facility Office(s) and contact details for the purposes of this
Agreement.
|
|
20.15
|
Notice
period
|
Where
this Agreement specifies a minimum period of notice to be given to the Facility
Agent, the Facility Agent may, at its discretion, accept a shorter notice
period.
|
21.
|
EVIDENCE
AND CALCULATIONS
|
|
21.1
|
Accounts
|
Accounts
maintained by the Facility Agent in connection with this Agreement are
conclusive (save for manifest error) evidence of the matters to which they
relate for the purpose of any litigation or arbitration
proceedings.
100
|
21.2
|
Certificates
and determinations
|
Any
certification or determination by a Finance Party of a rate or amount under the
Finance Documents will be, in the absence of manifest error, conclusive evidence
of the matters to which it relates.
|
21.3
|
Calculations
|
Any
interest or fee accruing under this Agreement accrues from day to day and is
calculated on the basis of Clause 7.1(d) being the actual number of days elapsed
and a year of 360 days or otherwise, depending on what the Facility Agent
determines is market practice.
|
22.
|
FEES
|
|
22.1
|
Commitment
fee
|
|
|
(a)
|
The
Owner shall pay to the Facility Agent for the account of each Lender a fee
calculated at the rate of sixty basis points (60bps) per annum on the
undrawn, uncancelled amount of the Maximum Facility Amount at such
time.
|
|
|
(b)
|
The
accrued commitment fee is payable to the Facility Agent quarterly in
arrear on the last day of each Term, the first payment to be paid on the
last day of the first Term. Accrued commitment fee is also
payable to the Facility Agent for a Lender on the date that Lender’s
Commitment is cancelled or drawn in
full.
|
|
22.2
|
Structuring
fee
|
The Owner
must pay to the Facility Agent for the account of the Joint Mandated Lead
Arranger and the Bookrunner a structuring fee in the amount and manner agreed in
the respective Fee Letters between the Joint Mandated Lead Arranger and the
Bookrunner and the Owner.
|
22.3
|
Agency
and Security Trustee fee
|
The Owner
must pay to the Administrative Parties for their respective own account an
agency and security trustee fee in the amount and manner agreed in the Fee
Letter between the Administrative Parties and the Owner.
|
22.4
|
Refund
of fees
|
The fees
referred to in this Clause 22 shall not be refunded under any circumstances
whatsoever once they have been paid.
101
|
23.
|
INDEMNITIES
AND BREAK COSTS
|
|
23.1
|
Currency
indemnity
|
|
|
(a)
|
The
Owner shall, as an independent obligation, indemnify each Secured Party
against any cost, loss or liability which that Secured Party or any of its
Affiliates incurs as a consequence
of:
|
|
|
(i)
|
the
Secured Party receiving an amount in respect of the Owner’s liability
under the Finance Documents; or
|
|
|
(ii)
|
that
liability being converted into a claim, proof, judgment or
order,
|
|
in
a currency other than the currency in which the amount is expressed to be
payable under the relevant Finance
Document.
|
|
|
(b)
|
Unless
otherwise required by law, the Owner waives any right it may have in any
jurisdiction to pay any amount under the Finance Documents in a currency
other than that in which it is expressed to be
payable.
|
|
23.2
|
Other
indemnities
|
|
|
(a)
|
The
Owner shall, as an independent obligation, indemnify each Secured Party
and any Affiliate against any cost, loss or liability which that Secured
Party or any of its Affiliates incurs as a consequence
of:
|
|
|
(i)
|
the
occurrence of any Event of Default;
|
|
|
(ii)
|
any
failure by the Owner to pay any amount due under a Finance Document on its
due date including any resulting from any distribution or redistribution
of any amount among the Lenders under this
Agreement;
|
|
|
(iii)
|
(other
than by reason of gross negligence or default by that Finance Party) a
Loan not being made after a Request has been delivered for that Loan;
or
|
|
|
(iv)
|
a
Loan (or part of a Loan) not being prepaid in accordance with this
Agreement.
|
The
liability of the Owner in each case includes any cost, loss or expense on
account of funds borrowed, contracted for or utilised to fund any amount payable
under any Finance Document.
|
|
(b)
|
The
Owner must indemnify against any cost, loss or liability incurred by any
Administrative Party as a result
of:
|
|
|
(i)
|
investigating
any event which that Administrative Party reasonably believes is a
Default; or
|
|
|
(ii)
|
acting
or relying on any notice which that Administrative Party reasonably
believes to be genuine, correct and appropriately
authorised,
|
(and any
such Administrative Party with such a belief must promptly notify the Facility
Agent of the same).
102
|
(c)
|
The Owner must promptly pay and discharge, or cause to be paid or discharged, upon the same becoming payable (and shall, if requested by a Secured Party, produce to that Secured Party evidence of the payment and discharge thereof) and indemnify on demand and keep indemnified each Secured Party and its Affiliates on a full indemnity basis against a claim against it by, or a liability to, a third party including, without limitation, in relation to any Taxes (other than any Taxes levied or assessed on net income, profits or gains) or any other Losses which relate to or arise out of or are in any way connected to: |
|
|
(i)
|
the
condition, testing, delivery, design, leasing, chartering, sub-chartering,
construction, manufacture, purchase, acquisition, bailment, fitting out,
sale, importation to or exportation from any country, registration,
ownership, possession, management, control, inspection, surveying,
engineering, contracting, installation, xxxxxxx, provisioning, the
provision of bunkers and lubricating oils, dry docking, use, operation,
maintenance, repair, service, modification, overhaul, replacement,
removal, performance, transportation, flag, navigation, certification,
classification, nature, description, acceptance, insurance, refurbishment,
conversion, change, alteration or laying-up of the Vessel or any part
thereof or otherwise in connection with the Vessel including, without
prejudice to the generality of the foregoing, any Losses arising from any
pollution or other environmental damage caused by or emanating from the
Vessel or caused by the Vessel becoming a wreck or an obstruction to
navigation whether or not the Vessel (or any part thereof) is in
possession or control of the Owner or the Manager or any other person and
wherever the location;
|
|
|
(ii)
|
any
repossession, return, redelivery, storage, maintenance, protection,
attempted sale, sale or other disposition of the Vessel following the
termination of the chartering of the Vessel which, if carried out by the
Facility Agent, Security Trustee or the Lenders, is carried out in
accordance with the terms of the Finance
Documents;
|
|
|
(iii)
|
the
complete or partial removal, decommissioning, disposal, making safe,
destruction, abandonment or loss of the Vessel including any matter which
the Vessel contains or has at any time
contained;
|
|
|
(iv)
|
any
damage or loss to the Vessel irrespective of how
caused;
|
|
|
(v)
|
any
Environmental Claim or any actual or alleged breach, contravention or
violation of any Environmental Laws or Environmental Approvals in any way
relating to the Vessel or the activities of any Environmental
Affiliates;
|
|
|
(vi)
|
any
design, article or material of the Vessel or relating thereto giving rise
to any infringement (or alleged infringement) of any patent or other
intellectual property rights; or
|
|
|
(vii)
|
the
occupation, arrest, confiscation, requisition, theft, registration,
compulsory acquisition, restraint of the Vessel or prevention thereof,
seizure, taking in execution, impounding, forfeiture or detention of the
Vessel, or in securing the release of the Vessel (including, without
limitation, by the provision of or by procuring a guarantee, bond, cash
deposit or other like security).
|
103
|
23.3
|
Exclusions
from Indemnities
|
The
indemnities contained in this Clause 23 shall not extend to any claim or
liability of a Secured Party or its Affiliates to the extent that such claim or
liability:
|
|
(a)
|
arises
from an act or omission on the part of that Secured Party or, as the case
may be Affiliate which constitutes fraud, wilful misconduct or gross
negligence on the part of such Secured Party or, as the case may be,
Affiliate;
|
|
|
(b)
|
is
caused by any failure on the part of that Secured Party to comply with any
of its express obligations under any of the Finance Documents to which
that Secured Party is a party (but excluding any such breach or failure
that arises as a result of the failure of a party to such Finance Document
(other than that Secured Party) duly and punctually to perform its express
obligations);
|
|
|
(c)
|
is
one in respect of which that Secured Party or, as the case may be,
Affiliate, is expressly and specifically indemnified and has received and
is entitled to retain such indemnity under any other provision of the
Finance Documents; or
|
|
|
(d)
|
is
a cost or expense expressly borne by the Secured Parties under any Finance
Document.
|
|
23.4
|
Break
Costs
|
|
|
(a)
|
The
Owner must pay to each Lender or, as the case may be, each Swap Bank, its
Break Costs in accordance with this
Agreement.
|
|
|
(b)
|
Break Costs are, subject
to paragraphs (c) and (d), the amount (if any) determined by the relevant
Lender by which:
|
|
|
(i)
|
the
interest which that Lender would have received for the period from the
date of receipt of payment of any part of its share in a Loan or an
overdue amount to the last day of the applicable Term for that Loan or
overdue amount if the principal or overdue amount received had been paid
on the last day of that Term;
|
exceeds
|
|
(ii)
|
the
amount which that Lender would be able to obtain by placing an amount
equal to the principal amount or overdue amount received by it on deposit
with a leading bank in the London interbank market for a period starting
on the Business Day following receipt and ending on the last day of the
applicable Term.
|
|
|
(c)
|
Any
prepayment of an Eksportfinans Loan shall, in place of the Break Costs
referred to in paragraph (b) above for the Eksportfinans Lenders, include
a prepayment fee equal to the amount by which (x) the sum of the present
values, discounted from the scheduled dates, of the amounts of interest at
the Eksportfinans Dollar CIRR which otherwise would have accrued on the
prepaid principal amount to the Repayment Dates exceeds (y) the sum of the
present values, discounted from the Repayment Dates of interest under this
Agreement, of the amounts of interest which would have accrued on the
prepaid principal amounts
if interest were calculated at the Reinvestment Rate. For the avoidance of
doubt, if the sum of the present values calculated under (x) is lower than
the sum of the present values calculated under (y), no prepayment fee
shall be payable by the Owner to the Eksportfinans Lenders or by the
Eksportfinans Lenders to the
Owner.
|
104
For the
purpose of this paragraph (c), Reinvestment Rate means the
average of the rates quoted on the prepayment date by each of the Reference
Banks as being the fixed rate they would pay against receipt of 3-month LIBOR
under an interest rate swap for an amount equal to the amount prepaid and with
the same final maturity and repayment profile as would have applied to the
Eksportfinans Loan had it not been prepaid.
|
|
(d)
|
In
respect of a Swap Bank and a Swap Agreement, Break Costs are the
amount (if any) determined by the relevant Swap Bank as being an amount
equal to any Swap Termination Payment for that Swap
Agreement.
|
|
|
(e)
|
Each
Lender or, as the case may be, each Swap Bank must supply to the Owner a
certificate showing the calculations in reasonable detail confirming the
amount of any Break Costs claimed by it under this
Clause.
|
|
24.
|
EXPENSES
|
|
24.1
|
Initial
costs
|
The Owner
must pay to each Secured Party the amount of all costs and expenses (including
legal fees, Technical Adviser’s fees, insurance, environmental and Tax
consultants’ fees) incurred by it in connection with the negotiation,
syndication (including any assignment or transfer of participation in any Loan
or Commitment to a new lender for the purposes of syndication or otherwise),
negotiation, preparation, printing, entry into, perfection and preservation of
the Finance Documents and matters incidental thereto.
|
24.2
|
Subsequent
costs
|
The Owner
must pay to each Secured Party the amount of all costs and expenses (including
legal fees) incurred by it in connection with:
|
|
(a)
|
the
negotiation, preparation, printing and entry into of any Finance Document
executed after the date of this
Agreement;
|
|
|
(b)
|
any
amendment, waiver or consent requested by or on behalf of the Owner or
specifically allowed by this Agreement;
and
|
|
|
(c)
|
the
provision by the Technical Adviser of all reports, confirmations and
advice provided by it to the Finance Parties during the Pre-Delivery
Period and on the Final Completion
Date.
|
|
24.3
|
Enforcement
costs
|
Following
an Event of Default, the Owner must pay to each Secured Party the amount of all
costs and expenses (including legal fees) incurred by it in connection with
the enforcement or attempted
enforcement of, or the preservation or attempted preservation of any rights
under, any Finance Document.
105
|
25.
|
WAIVER
OF CONSEQUENTIAL DAMAGES
|
In no
event shall any Secured Party be liable on any basis of liability for any
special, indirect, consequential or punitive damages and the Owner hereby
waives, releases and agrees (for itself and on behalf of its Holding Companies)
not to xxx upon any such claim for any such damages, unless caused by the fraud,
gross negligence or wilful default of the relevant Secured Party in performance
of any of its obligations under this Agreement or any of the Finance
Documents.
|
26.
|
AMENDMENTS
AND WAIVERS
|
|
26.1
|
Procedure
|
|
|
(a)
|
Except
as provided in this Clause 26, no term of the Finance Documents may be
amended or waived without the agreement of the Owner and the Facility
Agent. The Facility Agent (acting on the instructions of the
Majority Lenders, or otherwise in accordance with the relevant Finance
Documents) may effect, on behalf of any Finance Party, an amendment or
waiver allowed under this Clause.
|
|
|
(b)
|
The
Facility Agent must promptly notify the other Parties and each Swap Bank
of any amendment or waiver effected by it under paragraph (a)
above. Any such amendment or waiver is binding on all the
Parties.
|
|
|
(c)
|
The
Owner shall not be concerned or have any responsibility to ensure that the
Facility Agent has received any necessary authorisation or consent from
the Lenders, and may rely on the agreement of the Facility Agent
above.
|
|
26.2
|
Exceptions
|
|
|
(a)
|
An
amendment or waiver which relates
to:
|
|
|
(i)
|
the
definition of Majority Lenders in Clause 1.1
(Definitions);
|
|
|
(ii)
|
an
extension of the date of payment of any amount to a Lender under the
Finance Documents;
|
|
|
(iii)
|
a
reduction in the amount of any payment of principal, interest, fee or
other amount payable to a Lender under the Finance
Documents;
|
|
|
(iv)
|
an
increase in, or an extension of, a Commitment or the Total
Commitments;
|
|
|
(v)
|
a
release of the Owner other than in accordance with the terms of this
Agreement;
|
|
|
(vi)
|
a
release of any Security Document other than in accordance with the terms
of this Agreement;
|
106
|
|
(vii)
|
a
term of a Finance Document which expressly requires the consent of each
Lender;
|
|
|
(viii)
|
the
right of a Lender to assign or transfer its rights or obligations under
the Finance Documents;
|
|
|
(ix)
|
the
ranking or subordination provided for in the
DPP;
|
|
|
(x)
|
any
assignment or transfer by the Owner pursuant to Clause 27.1
(Assignments and transfers by the
Owner);
|
|
|
(xi)
|
Clause
2.4 (Nature of a Finance Party’s rights and obligations);
or
|
|
|
(xii)
|
this
Clause,
|
|
may
only be made with the consent of all the Lenders. An amendment
or waiver which relates to the rights and/or obligations of an
Administrative Party may only be made with theconsent of that
Administrative Party.
|
|
|
(b)
|
An
amendment or waiver which relates to a reduction in the Applicable Margin
in respect of the Eksportfinans Loans during the Pre-Completion Period or
the Post-Completion Eksportfinans Interest Rate may only be made with the
consent of all the Eksportfinans Lenders and the
Owner.
|
|
|
(c)
|
An
amendment or waiver which relates to a reduction in LIBOR or the
Applicable Margin in respect of the KEXIM Loans may only be made with the
consent of all the KEXIM Lenders and the
Owner.
|
|
|
(d)
|
An
amendment or waiver which relates to a reduction in the Applicable Margin
in respect of the Commercial Loans may only be made with the consent of
all the Commercial Lenders and the
Owner.
|
|
|
(E)
|
A
Fee Letter may be amended or waived with the Agreement of each
Administrative Party or, as the case may be, Mandated Lead Arranger that
is party to that Fee Letter and the
Owner.
|
|
26.3
|
Change
of currency
|
If a
change in any currency of a country occurs (including where there is more than
one currency or currency unit recognised at the same time as the lawful currency
of a country), the Finance Documents will be amended to the extent the Facility
Agent (acting reasonably and on the instructions of the Majority Lenders and
after consultation with the Owner) determines is necessary to reflect the
change.
|
26.4
|
Waivers
and remedies cumulative
|
The
rights of each Secured Party under the Finance Documents:
|
|
(a)
|
may
be exercised as often as necessary;
|
|
|
(b)
|
are
cumulative and not exclusive of its rights under the general law;
and
|
|
|
(c)
|
may
be waived only in writing and
specifically.
|
Delay in
exercising or non-exercise of any right is not a waiver of that
right.
107
|
27.
|
CHANGES
TO THE PARTIES
|
|
27.1
|
Assignments
and transfers by the Owner
|
The Owner
may not assign or transfer any its rights and obligations under the Finance
Documents without the prior consent of the Facility Agent (acting on the
instructions of all of the Lenders).
|
27.2
|
Assignments
and transfers by Lenders
|
|
|
(a)
|
Subject
to Clause 27.5 but without further cost to the Owner, a Lender (the Existing Lender) may at
any time assign or transfer (including by way of novation) any of its
rights and obligations under this Agreement to any other bank or other
financial institution or other entity which is regularly engaged in or
established for the purpose of making, issuing, purchasing or investing in
loans, securities and other financial assets (the New
Lender).
|
|
|
(b)
|
Any
Eksportfinans Lender may at any time assign or transfer (including by way
of novation) any of its rights and obligations under this Agreement to
GIEK.
|
|
|
(c)
|
The
Facility Agent is not obliged to execute a Transfer Certificate until it
has completed all know your customer requirements to its satisfaction. The
Facility Agent must promptly notify the Existing Lender and the New Lender
if there are any such requirements.
|
|
|
(d)
|
A
transfer of obligations will be effective only if the
obligations are novated in accordance with the following provisions of
this Clause 27.
|
|
|
(e)
|
On
the transfer becoming effective in this manner, the relevant Lender will
be released from its obligations under this Agreement to the extent that
they are transferred to the New
Lender.
|
|
|
(f)
|
Any
reference in the Finance Documents to a Lender includes a New Lender but
excludes a Lender if no amount is or may be owed to or by it under the
Finance Documents.
|
|
|
(g)
|
The
New Lender shall pay a transfer fee of US$5,000 to the Facility Agent
immediately following any transfer under and in accordance with the
provisions of this Clause 27.
|
|
|
(h)
|
Each
Lender agrees not to effect any assignment or transfer under this Clause
27 without simultaneously effecting a pro rata assignment or transfer of
its equivalent rights and/or obligations under the Sister Loan
Agreement.
|
|
27.3
|
Procedure
for transfer by way of novations
|
|
|
(a)
|
In
this Clause 27.3:
|
108
|
|
Transfer Date means, for
a Transfer Certificate, the later
of:
|
|
|
(i)
|
the
proposed Transfer Date specified in that Transfer Certificate;
and
|
|
|
(ii)
|
the
date on which the Facility Agent executes that Transfer
Certificate.
|
|
|
(b)
|
A
novation is effected if:
|
|
|
(i)
|
the
Existing Lender and the New Lender deliver to the Facility Agent a duly
completed Transfer Certificate; and
|
|
|
(ii)
|
the
Facility Agent executes it.
|
|
|
(c)
|
On
the Transfer Date:
|
|
|
(i)
|
the
New Lender will assume the rights and obligations of the Existing Lender
expressed to be the subject of the novation in the Transfer Certificate in
substitution for the Lender; and
|
|
|
(ii)
|
the
Existing Lender will be released from those obligations and cease to have
those rights.
|
|
|
(d)
|
Each
Party (other than the Existing Lender and the New Lender) irrevocably
authorises the Facility Agent to execute any duly completed Transfer
Certificate on its behalf.
|
|
|
(e)
|
The
Facility Agent must, as soon as reasonably practicable after it has
executed a Transfer Certificate, send to the Owner a copy of that Transfer
Certificate.
|
|
27.4
|
Limitation
of responsibility of Existing
Lender
|
|
|
(a)
|
Unless
expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender
for:
|
|
|
(i)
|
the
financial condition of the Owner or any other Project Party;
or
|
|
|
(ii)
|
the
legality, validity, effectiveness, completeness, accuracy, adequacy,
enforceability or performance of:
|
|
|
(A)
|
any
Finance Document or any other
document;
|
|
|
(B)
|
any
statement or information (whether written or oral) made in or supplied in
connection with any Finance Document;
or
|
|
|
(C)
|
any
observance by the Owner or the Sponsor of its obligations under any
Finance Document or any other
documents,
|
and any
representations or warranties implied by law are excluded.
|
|
(b)
|
Each
New Lender confirms to the Existing Lender that
it:
|
109
| (i) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Owner and its related entities, or any other Project Party and the nature and extent of any recourse against any Party or any other Project Party or its or their assets) in connection with its participation in this Agreement; and |
|
|
(ii)
|
has
not relied exclusively on any information supplied to it by the Existing
Lender in connection with any Finance
Document.
|
|
|
(c)
|
Nothing
in any Finance Document requires an Existing Lender
to:
|
|
|
(i)
|
accept
a re-transfer from a New Lender of any of the rights and obligations
assigned or transferred under this Clause 27;
or
|
|
|
(ii)
|
support
any losses incurred by the New Lender by reason of the non-performance by
the Owner of its obligations under any Finance Document or
otherwise.
|
|
27.5
|
Costs
resulting from change of Lender or Facility
Office
|
If:
|
|
(a)
|
a
Lender assigns or transfers any of its rights and obligations under the
Finance Documents or changes its Facility Office;
and
|
|
|
(b)
|
as
a result of circumstances existing at the date of the assignment, transfer
or change occurs, the Owner would be obliged to pay a Tax Payment or an
Increased Cost,
|
then,
unless the assignment, transfer or change is made by a Lender to mitigate any
circumstances giving rise to a Tax Payment, Increased Cost or a right to be
prepaid and/or cancelled by reason of illegality, the Owner need only pay that
Tax Payment or Increased Cost to the same extent that it would have been obliged
to if no assignment, transfer or change had occurred.
|
27.6
|
Changes
to the Reference Banks
|
If a
Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it
is an Affiliate) ceases to be a Lender, the Facility Agent must (in consultation
with the Owner) appoint another Lender or an Affiliate of a Lender to replace
that Reference Bank in consultation with the Owner.
|
28.
|
DISCLOSURE
OF INFORMATION
|
|
|
(a)
|
Each
Finance Party must keep confidential any information supplied to it by or
on behalf of the Owner in connection with the Finance
Documents. However, a Finance Party is entitled to disclose
information:
|
|
|
(i)
|
which
is publicly available, other than as a result of a breach by that Finance
Party of this Clause 28;
|
|
|
(ii)
|
in
connection with any legal or arbitration
proceedings;
|
110
|
|
(iii)
|
if
required to do so under any Applicable
Law;
|
|
|
(iv)
|
to
a governmental, banking, taxation or other regulatory
authority;
|
|
|
(v)
|
to
its professional advisers;
|
|
|
(vi)
|
to
the extent allowed under paragraph (b) below;
or
|
|
|
(vii)
|
with
the agreement of the Owner.
|
|
|
(b)
|
A
Finance Party may disclose to an Affiliate or any person with whom it may
enter, or has entered into, any kind of transfer, participation or other
agreement in relation to this Agreement (a participant):
|
|
|
(i)
|
a
copy of any Finance Document; and
|
|
|
(ii)
|
any
information which that Finance Party has acquired under or in connection
with any Finance Document.
|
However,
before a participant may receive any confidential information, it must agree
withthe relevant Finance Party (for the benefit of each Finance Party and the
Owner) to keep that information confidential on the terms of paragraph (a)
above.
|
|
(c)
|
This
Clause 28 supersedes any previous confidentiality undertaking given by a
Finance Party in connection with this Agreement prior to it becoming a
Party.
|
|
29.
|
SET-OFF
|
A Finance
Party may set off any matured obligation owed to it by the Owner under the
Finance Documents against any obligation (whether or not matured) owed by that
Finance Party to the Owner, regardless of the place of payment, booking branch
or currency of either obligation. If the obligations are in different
currencies, that Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the
set-off.
|
30.
|
PRO
RATA SHARING
|
|
30.1
|
Redistribution
|
If any
amount owing by the Owner under this Agreement to a Finance Party (the recovering Finance Party) is
discharged by payment, set-off or any other manner other than through the
Facility Agent under this Agreement (a recovery), then:
|
|
(a)
|
the
recovering Finance Party must, within three Business Days, supply details
of the recovery to the Facility
Agent;
|
|
|
(b)
|
the
Facility Agent must calculate whether the recovery is in excess of the
amount which the recovering Finance Party would have received if the
recovery had been received by the Facility Agent under this Agreement;
and
|
111
|
|
(c)
|
the
recovering Finance Party must pay to the Facility Agent an amount equal to
such excess (the redistribution).
|
|
30.2
|
Effect
of redistribution
|
|
|
(a)
|
The
Facility Agent must treat a redistribution as if it were a payment by the
Owner under this Agreement and distribute it among the Finance Parties,
other than the recovering Finance Party,
accordingly.
|
|
|
(b)
|
When
the Facility Agent makes a distribution under paragraph (a) above, the
recovering Finance Party will be subrogated to the rights of the Lenders
which have shared in that
redistribution.
|
|
|
(c)
|
If
and to the extent that the recovering Finance Party is not able to rely on
any rights of subrogation under paragraph (b) above, the Owner will owe
the recovering Finance Party a debt which is equal to the redistribution,
immediately payable and of the type originally
discharged.
|
|
|
(d)
|
If:
|
|
|
(i)
|
a
recovering Finance Party must subsequently return a recovery, or an amount
measured by reference to a recovery, to the Owner;
and
|
|
|
(ii)
|
the
recovering Finance Party has paid a redistribution in relation to that
recovery,
|
each
Finance Party must reimburse the recovering Finance Party all or the appropriate
portion of the redistribution paid to that Finance Party, together with interest
for the period while it held the re-distribution. In this event, the
subrogation in paragraph (b) above will operate in reverse to the extent of the
reimbursement.
|
30.3
|
Exceptions
|
Notwithstanding
any other term of this Clause 30, a recovering Finance Party need not pay a
redistribution to the extent that:
|
|
(a)
|
it
would not, after the payment, have a valid claim against the Owner in the
amount of the redistribution; or
|
|
|
(b)
|
it
would be sharing with another Lender any amount which the recovering
Finance Party has received or recovered as a result of legal or
arbitration proceedings, where:
|
|
|
(i)
|
the
recovering Finance Party notified the Facility Agent of those proceedings;
and
|
|
|
(ii)
|
the
other Finance Party had an opportunity to participate in those proceedings
but did not do so or did not take separate legal or arbitration
proceedings as soon as reasonably practicable after receiving notice of
them.
|
112
|
31.
|
SEVERABILITY
|
|
|
If
a term of a Finance Document is or becomes illegal, invalid or
unenforceable in any respect under any jurisdiction, that will not
affect:
|
|
|
(a)
|
the
legality, validity or enforceability in that jurisdiction of any other
term of the Finance Documents; or
|
|
|
(b)
|
the
legality, validity or enforceability in other jurisdictions of that or any
other term of the Finance
Documents.
|
|
32.
|
COUNTERPARTS
|
Each
Finance Document may be executed in any number of counterparts. This
has the same effect as if the signatures on the counterparts were on a single
copy of the Finance Document.
|
33.
|
NOTICES
|
|
33.1
|
In
writing
|
|
|
(a)
|
Any
communication in connection with a Finance Document must be in writing
and, unless otherwise stated, may be
given:
|
|
|
(i)
|
in
person, by post or fax; or
|
|
|
(ii)
|
to
the extent agreed by the Parties making and receiving the communication,
by e-mail or other electronic
communication.
|
|
|
(b)
|
For
the purpose of the Finance Documents, an electronic communication will be
treated as being in writing.
|
|
|
(c)
|
Unless
it is agreed to the contrary, any consent or agreement required under a
Finance Document must be given in
writing.
|
|
33.2
|
Contact
details
|
|
|
(a)
|
Except
as provided below, the contact details of each Party for all
communications in connection with the Finance Documents are those notified
by that Party for this purpose to the Facility Agent on or before the date
it becomes a Party.
|
|
|
(b)
|
The
contact details of the Owner for this purpose
are:
|
| Address: |
c/o
Cardiff Marine Inc.
00
Xxxxxxxxx Xxxxxx
XX-000
00 Xxxxxxxxxxx
Xxxxxx
|
||
|
Fax
number:
|
x00
0000000000
|
||
|
Attention:
|
Xx.
Xxxxxxxxx Xxxxxxxxx
|
|
|
(c)
|
The
contact details of the Facility Agent for this purpose
are:
|
| Address: |
0,
Xxxxxxxxx Xxxxxx Xxxxxxxx
X- 0000 Xxxxxxxxxx
|
||
|
Fax
number:
|
x000
000 00000/552
|
||
|
E-mail:
|
xxxx.xxxxxxx@xx.xxx
/ xxxxx-xxxxx.xxxxxxxxx@xx.xxx
|
||
| Attemtion: | Banu Ozkutan /Xxxxx-Xxxxx Ewerhardy, International Loans and Agency Services |
113
|
|
(d)
|
The
contact details of the Security Trustee for this purpose
are:
|
| Address: |
c/o Deutsche Bank Luxembourg S.A.
0,
Xxxxxxxxx Xxxxxx Xxxxxxxx
X-
0000 Xxxxxxxxxx
|
||
| Fax number: | x000 000 00000/552 | ||
| E-mail: | xxxx.xxxxxxx@xx.xxx / xxxxx-xxxxx.xxxxxxxxx@xx.xxx | ||
| Attention: | Banu Ozkutan /Xxxxx-Xxxxx Ewerhardy, International Loans and Agency Services |
|
|
(e)
|
A
Party may change its contact details by giving five Business Days’ notice
to the Facility Agent or (in the case of the Facility Agent) to the other
Parties.
|
|
|
(f)
|
Where
a Party nominates a particular department or officer to receive a
communication, a communication will not be effective if it fails to
specify that department or officer.
|
|
33.3
|
Effectiveness
|
|
|
(a)
|
Except
as provided below, any communication in connection with a Finance Document
will be deemed to be given as
follows:
|
|
|
(i)
|
if
delivered in person, at the time of
delivery;
|
|
|
(ii)
|
if
posted, five days after being deposited in the post, postage prepaid, in a
correctly addressed envelope; and
|
|
|
(iii)
|
if
by fax, when received in legible
form.
|
|
|
(b)
|
A
communication given under paragraph (a) above but received on a
non-working day or after business hours in the place of receipt will only
be deemed to be given on the next working day in that
place.
|
|
|
(c)
|
A
communication to the Facility Agent will only be effective on actual
receipt by it.
|
|
33.4
|
The
Owner
|
All
communications under the Finance Documents to or from the Owner must be sent
through the Facility Agent.
|
33.5
|
Entire
Agreement
|
|
|
This
Agreement and the other Finance Documents entered into pursuant to this
Agreement contain the whole agreement between the parties relating to the
transactions contemplated by this Agreement and supersede all previous
agreements between the parties relating to such
transactions.
|
|
34.
|
LANGUAGE
|
|
|
(a)
|
Any
notice given in connection with a Finance Document must be in
English.
|
|
|
(b)
|
Any
other document provided in connection with a Finance Document must
be:
|
|
|
(i)
|
in
English; or
|
|
|
(ii)
|
(unless
the Facility Agent otherwise agrees) accompanied by a certified English
translation. In this case, the English translation prevails
unless the document is a statutory or other official
document.
|
114
|
35.
|
GOVERNING
LAW
|
This
Agreement is governed by English law.
|
36.
|
ENFORCEMENT
|
|
36.1
|
Jurisdiction
|
|
|
(a)
|
The
English courts have jurisdiction to settle any dispute in connection with
any Finance Document.
|
|
|
(b)
|
The
English courts are the most appropriate and convenient courts to settle
any such dispute in connection with any Finance Document. The Owner agrees
not to argue to the contrary and waives objection to those courts on the
grounds of inconvenient forum or otherwise in relation to proceedings in
connection with any Finance
Document.
|
|
|
(c)
|
This
Clause 36 is for the benefit of the Lenders and the Administrative Parties
only. To the extent allowed by law, the Lenders and the
Administrative Parties may take:
|
|
|
(i)
|
proceedings
in any other court; and
|
|
|
(ii)
|
concurrent
proceedings in any number of
jurisdictions.
|
|
|
(d)
|
References
in this Clause to a dispute in connection with a Finance Document include
any dispute as to the existence, validity or termination of that Finance
Document.
|
|
36.2
|
Service
of process
|
|
|
(a)
|
The
Owner irrevocably appoints Ince Process Agents Ltd of Xxxxxxxxxxxxx Xxxxx,
0xx Xxxxx, 0xx Xxxxxxxxx’s Way, London, E1W 1AY (attn: Xx. Xxxxxxx
Xxxxxxx) as its agent under the Finance Documents for service of process
in any proceedings before the English courts in connection with any
Finance Document.
|
115
|
|
(b)
|
If
any person appointed as process agent under this Clause is unable for any
reason to act as agent for service of process, the Owner must forthwith
(and in any event within five (5) days of the event taking place) appoint
another agent on terms acceptable to the Facility Agent (acting
reasonably). Failing this, the Facility Agent may appoint another process
agent for this purpose.
|
|
|
(c)
|
The
Owner agrees that failure by a process agent to notify it of any process
will not invalidate the relevant
proceedings.
|
|
|
(d)
|
This
Clause 36 does not affect any other method of service allowed by
law.
|
|
36.3
|
Waiver
of immunity
|
The Owner
irrevocably and unconditionally:
|
|
(a)
|
agrees
not to claim any immunity from proceedings brought by a Finance Party
against it in relation to a Finance Document and to ensure that no such
claim is made on its behalf;
|
|
|
(b)
|
consents
generally to the giving of any relief or the issue of any process in
connection with those proceedings;
and
|
|
|
(c)
|
waives
all rights of immunity in respect of it or its
assets.
|
THIS AGREEMENT has been
entered into on the date stated at the beginning of this Agreement.
116
SCHEDULE
1
ORIGINAL
LENDERS
|
Commitments
|
|||||||||
|
Name
of Original Lender
|
Eksportfinans
Commitments
(US$)
|
KEXIM
Commitments (US$)
|
Commercial
Commitments
(US$)
|
||||||
|
Eksportfinans
Lenders:
|
|||||||||
|
Eksportfinans
ASA
|
250,000,000 | ||||||||
|
KEXIM
Lenders
|
|||||||||
|
Export
– Import Bank of Korea
|
150,000,000 | ||||||||
|
Dexia
Crédit Local, New York Branch
|
37,500,000 | ||||||||
|
Deutsche
Bank AG, London Branch
|
12,500,000 | ||||||||
|
Commercial
Lenders:
|
|||||||||
|
Deutsche
Bank AG, London Branch
|
82,500,000
|
||||||||
|
Dexia
Crédit Local, New York Branch
|
30,000,000
|
||||||||
117
SCHEDULE
2
CONDITIONS
PRECEDENT
PART
1
INCIDENTAL
COSTS LOAN
|
1.
|
An
up to date certificate of goodstanding of the Owner, the Parent, the
Parent Shareholder and the Sponsor dated no more than two Business Days
prior to the first Utilisation Date and a certified copy of the
certificate of incorporation and constitutional documents of
each.
|
|
2.
|
A
certified copy of a resolution of the board of directors of the Owner, the
Parent, the Parent Shareholder and the
Sponsor:
|
|
|
(a)
|
approving
the terms of, and the transactions contemplated by, each Finance Document
to which it is a party and resolving that it executes each such Finance
Document then to be executed;
|
|
|
(b)
|
authorising
a specified person or persons to execute each Finance Document on its
behalf to which it is a party, then to be executed;
and
|
|
|
(c)
|
authorising
a specified person or persons, on its behalf, to sign and/or despatch all
other documents and notices to be signed and/or despatched by it under or
in connection with each Finance Document then to be
executed.
|
|
3.
|
A
specimen of the signature of each person authorised by the resolutions
referred to in 2 above.
|
|
4.
|
An
original of each of the following documents, notarised, legalised and/or
apostilled as necessary, duly executed by the parties to
it:
|
|
|
(a)
|
each
Finance Document (save for those Finance Documents listed in paragraph 8
of Part 2 of this Schedule, paragraph 9 of Part 3 of this Schedule and in
paragraphs 2 and 13 of Part 5 of this Schedule) including each Swap
Agreement.
|
|
|
(b)
|
each
Sister Finance Document (save for those Sister Finance Documents listed in
paragraph 8 of schedule 2, part 2 of the Sister Loan Agreement, paragraph
9 of schedule 2, part 3 of the Sister Loan Agreement and paragraphs 2 and
13 of schedule 2, part 5 of the Sister Loan
Agreement);
|
|
|
(c)
|
the
GIEK Guarantee issued in favour of the Eksportfinans Lenders;
and
|
|
|
(d)
|
any
mandate or similar document, to be entered into by the Owner with the
Account Bank.
|
|
5.
|
A
certified copy of each Related Contract (other than any Drilling Charter,
Charterer Parent Guarantee, the Management Agreement and Obligatory
Insurances).
|
|
6.
|
Duly
executed originals (or, if originals are not available, fax/pdf copies
with originals to follow as soon as possible and in any event within five
(5) Business Days) of all notices of assignment required to be served
under each Security Document and duly executed originals (or, if originals
are
not available, fax/pdf copies with originals to follow as soon as possible
and in any event within one (1) month) of the acknowledgements thereof
(but not including the notices and acknowledgements to be served under the
Charter Assignment or the Delivery General Assignment), notarised,
legalised and/or apostilled, as
required.
|
118
|
7.
|
A
letter from Ince Process Agents Ltd., agreeing to its appointment as
process agent for the Owner and the Sponsor under the Finance
Documents.
|
|
8.
|
A
legal opinion of Xxxxx & Xxxxx LLP, London, English legal advisers to
the Lenders, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
|
|
9.
|
A
legal opinion of Woo, Yun, Kang, Xxxxx Xxx, Korean legal advisers to the
Lenders, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
|
|
10.
|
A
legal opinion of Xxxxxx & Xxxxxx LLP, Xxxxxxxx Islands legal advisers
to the Lenders, addressed to the Facility Agent as agent for and on behalf
of itself and the Lenders.
|
|
11.
|
A
legal opinion of Pologiorgis, Babalis, Panselinos, Troullinos, Mavrou Law
Offices, Greek legal advisers to the Lenders, addressed to the Facility
Agent as agent for and on behalf of itself and the
Lenders.
|
|
12.
|
Evidence
that all fees (including all fees payable on or at the first Utilisation
Date under the Fee Letters and legal costs) and reasonable out-of-pocket
expenses then due and payable from the Owner under the Finance Documents
have been or will be paid by the first Utilisation Date or other drawdown
as part of the Incidental Costs
Loan.
|
|
13.
|
Evidence
that each Account has been opened in accordance with the Finance
Documents.
|
|
14.
|
Detailed
construction, operating and maintenance cost budget, the total Vessel
capex plan including the construction schedule, and pro-forma financial
projections prepared by the Owner with respect to the project the subject
of the Related Contracts in form and substance satisfactory to the
Lenders.
|
|
15.
|
Opinion
and report by Xxxxx that all Construction Insurances are in acceptable
form and amount and placed with acceptable underwriters, and such opinion,
report and insurance is acceptable to the Facility
Agent.
|
|
16.
|
Confirmation
from the Builder that the Owner has paid it in aggregate an amount equal
to at least the Initial Equity Contribution and confirmation from the
Account Bank or, as the case may be, the Equity Account Bank that the
Owner has paid:
|
|
|
(a)
|
any
Balancing Equity Contribution into the Proceeds Account;
and
|
|
|
(b)
|
the
Equity Collateral to be paid under the terms of this Agreement on or by
the Incidental Costs Loan Utilisation Date into the Equity
Account.
|
|
17.
|
Certified
copy of the Sponsor’s audited annual financial statements for the year
ended 31 December 2007.
|
119
|
18.
|
Evidence
that all Transaction Authorisations required by the Owner or Sponsor to
perform its obligations under the Transaction Documents have been obtained
or will, at the appropriate time, be
obtained.
|
|
19.
|
Certificate
from the Owner confirming that there are no material disputes with the
Builder and confirmation from the same that there have been no amendments
or variations to the Shipbuilding Contract or the Other Shipbuilding
Contract other than amendments disclosed and agreed in writing prior to
the date hereof or permitted under the terms of this
Agreement.
|
|
20.
|
Confirmation
from the Lenders that they have satisfied their “know your customer”
requirements in respect of the relevant parties to the Transaction
Documents.
|
|
21.
|
Confirmation
from the Sponsor that as far as it is aware there has been no material
adverse change in the prospects of the Owner or the operations or
financial condition of the Owner, the Manager (if an Affiliate of the
Sponsor) or the Sponsor as from the date of this
Agreement.
|
|
22.
|
A
copy of any and all invoices issued by the Builder in relation to any
Instalments payable by the Owner on or before the Incidental Costs Loan
Utilisation Date.
|
|
23.
|
Original
Share Certificates of each of the Owner, the Parent and the Parent
Shareholder in relation to the Share
Charge.
|
|
24.
|
Executed
blank share transfer forms in relation to the Share
Charge.
|
|
25.
|
Confirmation,
if applicable, that in the circumstances referred to in Clause 18.1
(Events of Default), following an event of insolvency in respect of the
Builder, a replacement builder has been agreed by the Finance Parties and
the Owner within three months of the date of such insolvency
event.
|
|
26.
|
A
legal opinion of Xxxxx & Xxxxx LLP, English legal advisers to GIEK,
addressed to Eksportfinans and concerning certain provisions of the GIEK
Guarantee.
|
|
27.
|
Completion
of each Lender’s legal, technical, environmental, financial, tax and
insurance due diligence with regard to the project, including, among
others, review of all Related Contracts and receipt of appropriate
internal credit approvals by such
Lender.
|
|
28.
|
Receipt
by the Kexim Lenders of the Kexim Guarantee and evidence that any special
conditions required by Kexim in connection with the Facility have been
met.
|
|
29.
|
A
duly signed syndication letter between GIEK, Deutsche Bank AG, London
Branch and Dexia Crédit Local, New York
Branch.
|
In this
Schedule 1 “certified copy” means a copy certified by an officer of the Owner as
being true, complete and up to date.
120
PART
2
INSTALMENT
LOAN 1
|
1.
|
Refresh
certificates, update report or, as the case may be confirmation and
satisfactory evidence of continued compliance with the conditions
precedent referred to in Part 1 of this Schedule at paragraphs 1, 2, 3,
18, 19, and 21.
|
|
2.
|
Receipt
of updated budgets and financial projections referred to in Part 1 of this
Schedule at paragraph 14.
|
|
3.
|
Confirmation
from the Account Bank that the Owner has deposited in the Proceeds
Account:
|
|
|
(a)
|
any
Balancing Equity Contribution; and
|
|
|
(b)
|
the
relevant Equity Contribution required under Clause 12.2(a)(i)(B) in
respect of the Instalment Loan 1.
|
|
4.
|
A
certified copy of the invoice issued by the Builder in relation to the
Instalment payable by the Owner on the Instalment Loan 1 Utilisation
Date.
|
|
5.
|
Confirmation,
if applicable, that in the circumstances referred to in Clause 18.1
(Events of Default), following an event of insolvency in respect of the
Builder, a replacement builder has been agreed by the Finance Parties and
the Owner within three months of the date of such insolvency
event.
|
|
6.
|
Evidence
from the Equity Account Bank that the sum of U.S.$90,000,000 has been
placed in the Equity Account in accordance with Clause
12.2(a)(iii)(B).
|
|
7.
|
A
certified copy of the Management
Agreement.
|
|
8.
|
An
original of the Management Agreement Assignment, notarised, legalised
and/or apostillised as necessary, duly executed by the parties to it
together with duly executed originals (or, if originals are not available,
fax/pdf copies with originals to follow as soon as possible and in any
event within five (5) Business Days) of the notice of assignment to the
Manager and a duly executed original (or, if originals are not available,
fax/pdf copies with originals to follows as soon as possible and in any
event within one (1) month) of the acknowledgement from the Manager,
notarised, legalised and/or apostillised, as
required.
|
|
9.
|
A
legal opinion of Xxxxxxxx Advokatfirma, Norwegian legal advisers to the
Lenders, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
|
|
10.
|
A
legal opinion of Xxxxx & Overy LLP, London, English legal advisers to
the Lenders, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
|
121
PART
3
INSTALMENT
LOAN 2
|
1.
|
Refresh
certificates or, as the case may be confirmation and satisfactory evidence
of continued compliance with the conditions precedent referred to in Part
1 of this Schedule at paragraphs 1, 2, 3, 18, 19, and
21.
|
|
2.
|
Receipt
of updated budgets and financial projections referred to in Part 1 of this
Schedule at paragraph 14, and certificate from the Classification Society
verifying that the construction milestones for the Instalment Loan 2
Utilisation Date specified under Clause 16.29 (Construction Milestones)
has been met.
|
|
3.
|
Confirmation
from the Account Bank that the Owner has deposited in the Proceeds
Account:
|
|
|
(a)
|
any
Balancing Equity Contribution; and
|
|
|
(b)
|
the
relevant Equity Contribution required under Clause 12.2(a)(i)(B), in
respect of the Instalment Loan 2.
|
|
4.
|
Confirmation,
if applicable, that in the circumstances referred to in Clause 18.1
(Events of Default), following an event of insolvency in respect of the
Builder, a replacement builder has been agreed by the Finance Parties and
the Owner within three months of the date of such insolvency
event.
|
|
5.
|
Evidence
that a Drilling Charter and a Sister Drilling Charter have been entered
into under and in accordance with Clause 16.22
(Charters)
|
|
6.
|
A
certified copy of the invoice issued by the Builder in relation to the
Instalment payable by the Owner on the Instalment Loan 2 Utilisation
Date.
|
|
7.
|
If
a Drilling Charter has been entered into evidence from the Equity Account
Bank that the required Equity Collateral has been placed in the Equity
Account in accordance with Clause
12.2(a)(iii)(C).
|
|
8.
|
If
a Drilling Charter has been entered into, evidence from the Account Bank
that the amount of US$25,000,000 has been paid into the Debt Service
Reserve Account in accordance with
Clause 12.8(a).
|
|
9.
|
If
a Drilling Charter has been entered into, an original of each of the
following documents, notarised, legalised and/or apostilled as necessary,
duly executed by the parties to it:
|
|
|
(a)
|
the
Charterer Direct Agreement;
|
|
|
(b)
|
the
Charter Assignment together with any notices;
and
|
|
|
(c)
|
the
Charterer Parent Guarantee (if
any).
|
122
PART
4
INSTALMENT
LOAN 3
|
1.
|
Refresh
certificates or, as the case may be confirmation and satisfactory evidence
of continued compliance with the conditions precedent referred to in Part
1 of this Schedule at paragraphs 1, 2, 3, 18, 19, and
21.
|
|
2.
|
Receipt
of updated budgets and financial projections referred to in Part 1 of this
Schedule at paragraph 14 and a certificate from the Classification Society
verifying that the construction milestones for the Instalment Loan 3
Utilisation Date specified under Clause 16.29 (Construction Milestones)
has been met.
|
|
3.
|
Confirmation
from the Account Bank that the Owner has deposited in the Proceeds
Account:
|
|
|
(a)
|
any
Balancing Equity Contribution; and
|
|
|
(b)
|
the
relevant Equity Contribution required under Clause 12.2(a)(i)(B), in
respect of the Instalment Loan 3.
|
|
4.
|
Confirmation,
if applicable, that in the circumstances referred to in Clause 18.1
(Events of Default), following an event of insolvency in respect of the
Builder, a replacement builder has been agreed by the Finance Parties and
the Owner within three months of the date of such insolvency
event.
|
|
5.
|
A
certified copy of the invoice issued by the Builder in relation to the
Instalment payable by the Owner on the Instalment Loan 3 Utilisation
Date.
|
123
PART
5
DELIVERY
LOAN
|
1.
|
A
certified copy of the invoice issued by the Builder in relation to the
Instalment payable by the Owner on the Delivery Loan Utilisation
Date.
|
|
2.
|
A
duly executed original of the Delivery General Assignment and the
Mortgage.
|
|
3.
|
A
duly executed Power of Attorney and the Appointment of Judicial
Representative in respect of the
Mortgage.
|
|
4.
|
A
legal opinion from Xxxxx & Xxxxx LLP, London, English legal advisers
to the Lenders, in respect of the Delivery General
Assignment.
|
|
5.
|
A
legal opinion from Xxxxxx & Xxxxxx, Xxxxxxxx Islands legal adviser and
Fenech & Fenech, Maltese legal adviser to the Lenders, in respect of
the Delivery General Assignment and the
Mortgage.
|
|
6.
|
A
transcript of the Maltese Ship Registry showing
that:
|
|
|
(a)
|
the
Mortgage has been duly recorded in Malta and constitutes a first priority
security interest over the Vessel and that all taxes and fees payable to
the Maltese Registrar of Shipping in respect of the Vessel have been paid
in full; and
|
|
|
(b)
|
the
Vessel is provisionally registered in the name of the Owner as a fully
completed Maltese ship at the port of Valletta free of all Security
Interests other than Permitted
Liens.
|
|
7.
|
Copies
of such other documents which, based on legal advice received from the
relevant advisers referred to in this Agreement and which are reasonably
required to evidence the legality, validity and enforceability of the
obligations of the parties to any Finance Document being delivered on the
Delivery Loan Utilisation Date.
|
|
8.
|
A
certified copy of:
|
|
|
(a)
|
a
final classification certificate from the Classification Society in
respect of the Vessel showing the Vessel to be in class without
recommendation, condition or qualification (other than any immaterial
recommendations, conditions or qualifications that are capable of
rectification within 12 months or such shorter period as is required by
the Classification Society) or, in the event that this is not available, a
faxed copy with a certified copy to follow as soon as practicable after
the Delivery Date;
|
|
|
(b)
|
a
valid Interim Safety Management
Certificate;
|
|
|
(c)
|
a
valid Document of Compliance; and
|
|
|
(d)
|
a
valid International Ship Security
Certificate.
|
124
|
9.
|
Confirmation
acceptable to the Facility Agent (such acceptance not to be unreasonably
withheld or delayed) that the Owner will accept the Vessel pursuant to the
terms of the Shipbuilding Contract and execute a protocol of delivery and
acceptance.
|
|
10.
|
A
certified copy of the commercial invoice in respect of the
Vessel.
|
|
11.
|
A
certified copy of the Builder’s certificate in respect of the
Vessel.
|
|
12.
|
A
certified copy of the Drilling Charter and any Charterer Parent Guarantee
and duly executed and, where necessary, notarised, legalised and/or
apostilled and copies of all other documents referred to in Clause
16.22(b).
|
|
13.
|
Duly
executed and, where necessary, notarised, legalised and/or apostilled
notices of assignment of the Obligatory Insurances in respect of the
Vessel duly executed by the Owner substantially in the form provided for
in the Delivery General Assignment and all confirmations and
acknowledgements required in accordance with the terms of the Delivery
General Assignment.
|
|
14.
|
Confirmation
from the Facility Agent of its satisfaction with a final insurance report
prepared by Xxxxx, or such other insurance adviser appointed by the
Facility Agent and fax confirmations from each broker (if applicable),
insurer and club concerned with the Obligatory Insurances that the
insurances meet the requirements set out in Clause 17.1 including the
insurances referred to in Clause 17.1(e), will be effective from the
actual delivery of the Vessel and are consistent with the requirements of
the Drilling Charter.
|
|
15.
|
Duly
executed letters of undertaking substantially in the form provided in the
Delivery General Assignment from, inter alios, the
approved brokers (if applicable), insurer and club concerned with the
Obligatory Insurances.
|
|
16.
|
The
Annual Budget of the Owner in agreed form and approved by the Lenders, for
the year from the date of payment of the Delivery Loan
falls.
|
|
17.
|
Confirmation
from the Account Bank that the Owner has deposited in the Proceeds
Account:
|
|
|
(a)
|
any
Balancing Equity Contribution required under Clause 12.2(a)(i);
and
|
|
|
(b)
|
the
relevant Equity Contribution required under Clause 12.2(a)(i)(B), in
respect of the Delivery Loan.
|
|
18.
|
A
copy of any and all invoices issued by the Builder in relation to any
Instalments payable by the Owner on or before the Delivery Loan
Utilisation Date.
|
|
19.
|
Refresh
certificates or, as the case may be confirmation and satisfactory evidence
of continued compliance with the conditions precedent referred to in Part
1 of this Schedule at paragraphs 1, 2, 3, 19, 20 and
22.
|
|
20.
|
Evidence
that the Required DSRA Balance has been or will immediately after the
drawing of the Delivery Loan be credited to the balance of the Debt
Service Reserve Account.
|
|
21.
|
Receipt
of updated budgets and financial projections referred to in Part 1 of this
Schedule at paragraph 22, and a technical memorandum issued by the
Technical Adviser covering the relevant
Workscope, to be achieved by the Delivery Loan Utilisation Date and
confirming that the construction milestones specified under Clause 16.29
(Construction Milestones) has been
met.
|
125
|
22.
|
Evidence
that the Owner’s equity in the Vessel is not less than 30% of the total
Vessel Cost.
|
|
23.
|
Evidence
that the project the subject of the Related Contracts, has sufficient
ongoing maintenance opex and working capital requirements, and evidence in
the form of reserves, if necessary, that the Owner will be able to meet
these ongoing requirements.
|
|
24.
|
Confirmation
from the Owner and the Facility Agent (acting on behalf of each of the
Lenders) of their satisfactory due diligence on the Charterer’s and the
Lenders’ withholding tax and the Owner’s withholding tax and corporation
tax exposure, if any.
|
|
25.
|
Confirmation,
if applicable, that in the circumstances referred to in Clause 18.1
(Events of Default), following an event of insolvency in respect of the
Builder, a replacement builder has been agreed by the Finance Parties and
the Owner within three months of the date of such insolvency
event.
|
126
PART
6
INCIDENTAL
VESSEL COSTS LOAN
|
1.
|
A
copy of any and all invoices in respect of approved Incidental Vessel
Costs payable by the Owner on or immediately following the proposed
Utilisation Date for the requested Incidental Vessel Costs
Loan.
|
|
2.
|
Confirmation
from the Account Bank that the Owner has deposited in the Proceeds
Account:
|
|
|
(a)
|
any
Balancing Equity Contribution; and
|
|
|
(b)
|
the
relevant Equity Contribution required under Clause 12.2(a)(i)(B), in
respect of the relevant Incidental Vessel Costs
Loan.
|
127
|
|
|
SCHEDULE
3
FORM
OF REQUEST
To: Deutsche
Bank Luxembourg S.A. as Facility Agent
From: Drillship
Kithira Owners Inc.
Date:
[ ]
Credit Agreement
dated [ ] 2008
(the Credit
Agreement)
|
1.
|
We
refer to the Credit Agreement. This is a
Request. Terms defined in the Credit Agreement shall have the
same meaning when used in this
Request.
|
|
2.
|
We
wish to borrow a Loan from you as
follows:
|
|
|
(a)
|
Utilisation
Date:
|
[ ]
|
|
|
(b)
|
Amount:
|
US$[ ]
|
Incidental
Costs Loan/Instalment Loan 1/Instalment Loan 2/Instalment Loan 3/Incidental
Vessel Costs Loan/Delivery Loan*
Amount
payable to the Builder towards the Instalment under the Shipbuilding Contract:
US$[ ]
+[Amount
payable to the Debt Service Reserve Account: US$[Required DSRA
Balance]
[Amount
payable in respect of Incidental Vessel Costs as set out below (as supported by
the relevant attached invoices):
[Amount
payable in respect of Incidental Loan Costs as set out below:]
|
|
(c)
|
Details
of item:
|
US$[ ]
|
|
|
(d)
|
Details
of item:
|
US$[ ]]
|
Total
drawdown: US$[ ]
|
3.
|
Our
payment instructions are:
|
[to
include provisions that:
|
|
(a)
|
amount
of Loan in respect of Instalment payable under the Shipbuilding Contract
to be payable to the Builder’s account [set out account
details];
|
|
|
(b)
|
[Required
DSRA Balance to be credited to the Debt Service Reserve
Account;
|
|
|
(c)
|
Incidental
Loan Costs to be credited to the Facility Agent’s nominated account;
and
|
128
|
|
(d)
|
Incidental
Vessel Costs to be credited to [the Owner’s: current account for forward
payment to] the relevant payee account indicated in
invoice]
|
|
4.
|
We
confirm that each condition precedent under the Credit Agreement which
must be satisfied on the date of this Request is so satisfied and that the
Repeating Representation are true and correct with reference to the facts
and circumstances now subsisting.
|
|
5.
|
This
Request is irrevocable.
|
|
6.
|
If
applicable, a copy of:
|
|
|
(a)
|
[the
relevant invoice from the Builder the final stage certificate signed by
the Builder and us; and
|
|
|
(b)
|
the
relevant invoices in respect of the Incidental Vessel
Costs,
|
is
attached to this Request.]
By: DRILLSHIP KITHIRA OWNERS
INC.
Authorised
Signatory
*Delete
as appropriate
+
Delivery Loan only
129
SCHEDULE
4
FORM
OF TRANSFER CERTIFICATE
To: DRILLSHIP
KITHIRA OWNERS INC.
From: [THE
EXISTING LENDER] and [THE NEW LENDER]
Date: [ ]
Credit Agreement
dated [ ]
(the Credit
Agreement)
We refer
to Clause 27.3 (Procedure for transfer by way of novations) of the Credit
Agreement. Terms defined in the Credit Agreement shall have the same
meaning when used in this Novation Certificate.
|
1.
|
We
[ ] (the Existing Lender) and
[ ] (the New Lender) agree to the
Existing Lender and the New Lender novating all the Existing Lender’s
rights and obligations referred to in the Schedule in accordance with
Clause 27.3 (Procedure for transfer by way of novations) of the Credit
Agreement.
|
|
2.
|
The
specified date for the purposes of Clause 27.3(a) of the Credit Agreement
is [date of
novation].
|
|
3.
|
The
Facility Office and address for notices of the New Lender for the purposes
of Clause 33.2 (Contact details) of the Credit Agreement are set out in
the Schedule attached to this
Certificate.
|
|
4.
|
This
Novation Certificate is governed by English
law.
|
130
THE
SCHEDULE
Rights
and obligations to be novated
[Choose
either of the following
options:]
|
(a)
|
All
of the rights and obligations of the Existing Lender in respect of the
Facility – principal amount
US$[ ].
|
|
(b)
|
The
principal amount of US$[ ] in respect
of each of the Loans and all the rights and obligations attached to the
same – total principal amount
US$[ ].
|
[New Bank]
[Facility
Office Address
for notices]
|
[Existing
Lender]
|
[New
Lender]
|
|
|
By:
|
By:
|
|
|
Date:
|
Date:
|
The
Transfer Date is confirmed by the Facility Agent as
[ ].
[ ]
By:
131
SCHEDULE
5
LOAN
REPAYMENT SCHEDULE
|
Date
|
Repayment
|
|
|
1
|
30
March 2012
|
US$31,250,000
|
|
2
|
28
September 2012
|
US$31,250,000
|
|
3
|
28
March 2013
|
US$31,250,000
|
|
4
|
30
September 2013
|
US$31,250,000
|
|
5
|
31
March 2014
|
US$31,250,000
|
|
6
|
30
September 2014
|
US$31,250,000
|
|
7
|
31
March 2015
|
US$31,250,000
|
|
8
|
30
September 2015
|
US$31,250,000
|
|
9
|
31
March 2016
|
US$31,250,000
|
|
10
|
30
September 2016
|
US$31,250,000
|
|
11
|
31
March 2017
|
US$31,250,000
|
|
12
|
29
September 2017
|
US$31,250,000
|
|
13
|
29
March 2018
|
US$31,250,000
|
|
14
|
29
September 2018
|
US$31,250,000
|
|
15
|
29
March 2019
|
US$31,250,000
|
|
16
|
30
September 2019
|
US$31,250,000
|
|
17
|
31
March 2020
|
US$31,250,000
|
|
18
|
30
September 2020
|
US$31,250,000
|
132
SCHEDULE
6
CALCULATION
CERTIFICATE
|
To:
|
Deutsche
Bank Luxembourg S.A as Facility
Agent
|
From: Drillship
Kithira Owners Inc.
Drillship Kithira Owners Inc. Credit
Agreement dated
[ ]
(the Credit
Agreement)
|
1.
|
Terms
defined in the Credit Agreement have the same meaning in this
Certificate.
|
|
2.
|
We
hereby certify that [no Default or Mandatory Termination Event has
occurred and is continuing or is outstanding] [a Default/Mandatory
Prepayment Event under Clause [ ] of [specify document] is
outstanding] and the following steps are being taken to remedy it
[ ].
|
|
3.
|
With
respect to the Calculation Period ending on [insert Repayment Date]
the Debt Service Ratio was [l] calculated on
the basis of the figures in the table
below.
|
| Relevant figures for Calculation Period | US$ |
|
Gross
Revenues received
|
|
|
Operating
Expenses payable
|
|
|
Financing
Costs accrued
|
|
|
Financing
Principal payable
|
|
|
CAPEX
payable
|
Yours
faithfully,
……………………………
[Senior
Officer]
133
SCHEDULE
7
INCIDENTAL
VESSEL COSTS
|
1.
|
Costs and expenses under the Management Agreement incurred in the
Pre-Completion Period inaccordance with the
Approved
Budget attached as Appendix 12 up to
US$34,100,000.
|
| 2. | Initial Debt Service Reserve Contribution up to US$25,000,000. |
134
SCHEDULE
8
CALCULATION
OF THE MANDATORY COST
|
1.
|
General
|
|
(a)
|
The
Mandatory Cost is to compensate a Lender for the cost of compliance
with:
|
|
|
(i)
|
the
requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces any of
its functions); or
|
|
|
(ii)
|
the
requirements of the European Central
Bank.
|
|
(b)
|
The
Mandatory Cost is expressed as a percentage rate per
annum.
|
|
(c)
|
The
Mandatory Cost is the weighted average (weighted in proportion to the
percentage share of each Lender in the relevant Loan) of the rates for the
Lenders calculated by the Facility Agent in accordance with this Schedule
on the first day of a Term (or as soon as possible after
then).
|
|
(d)
|
The
Facility Agent must distribute each amount of Mandatory Cost among the
Lenders on the basis of the rate for each
Lender.
|
|
(e)
|
Any
determination by the Facility Agent pursuant to this Schedule will be, in
the absence of manifest error, conclusive and binding on all the
Parties.
|
|
2.
|
For
a Lender lending from a Facility Office in the
U.K.
|
|
(a)
|
The
relevant rate for a Lender lending from a Facility Office in the U.K. is
calculated in accordance with the following
formula:
|
E x 0.01% per annum
300
where on
the day of application of the formula, E is calculated by the Facility Agent as
being the average of the rates of charge under the fees rules supplied by the
Reference Banks to the Facility Agent under paragraph (d) below and expressed in
pounds per £1 million.
|
(b)
|
For
the purposes of this paragraph 2:
|
|
|
(i)
|
fees rules means the
then current rules on periodic fees in the Supervision Manual of the FSA
Handbook or any other law or regulation as may then be in force for the
payment of fees for the acceptance of
deposits;
|
|
|
(ii)
|
fee tariffs means the
fee tariffs specified in the fees rules under fee-block Category Al
(Deposit acceptors) (ignoring any minimum fee or zero rated fee required
pursuant to the fees rules but applying any applicable discount rate);
and
|
|
|
(iii)
|
tariff base has the
meaning given to it in, and will be calculated in accordance with, the
fees rules.
|
135
|
|
(c)
|
Each
rate calculated in accordance with the formula is, if necessary, rounded
upward to four decimal places.
|
|
(d)
|
If
requested by the Facility Agent, each Reference Bank must, as soon as
practicable after publication by the Financial Services Authority, supply
to the Facility Agent the rate of charge payable by that Reference Bank to
the Financial Services Authority under the fees rules for that financial
year of the Financial Services Authority (calculated by that Reference
Bank as being the average of the fee tariffs applicable to that Reference
Bank for that financial year) and expressed in pounds per £1 million of
the tariff base of that Reference
Bank.
|
|
(e)
|
Each
Lender must supply to the Facility Agent the information required by it to
make a calculation of the rate for that Lender. In particular,
each Lender must supply the following information on or prior to the date
on which it becomes a Lender:
|
|
|
(i)
|
the
jurisdiction of its Facility Office;
and
|
|
|
(ii)
|
any
other information that the Facility Agent reasonably requires for that
purpose.
|
Each
Lender must promptly notify the Facility Agent of any change to the information
supplied to it under this paragraph.
|
(f)
|
The
rates of charge of each Reference Bank for the purpose of E above are
determined by the Facility Agent based upon the information supplied to it
under paragraphs (d) and (e) above. Unless a Lender notifies
the Facility Agent to the contrary, the Facility Agent may assume that the
Lender’s obligations in respect of cash ratio deposits and special
deposits are the same as those of a typical bank from its jurisdiction of
incorporation with a Facility Office in the
U.K.
|
|
(g)
|
The
Facility Agent has no liability to any Party if its calculation over or
under compensates any Lender. The Facility Agent is entitled to
assume that the information provided by any Lender or Reference Bank under
this Schedule is true and correct in all
respects.
|
|
3.
|
For
a Lender lending from a Facility Office in a Participating Member
State
|
|
(a)
|
The
relevant rate for a Lender lending from a Facility Office in a
Participating Member State is the percentage rate per annum notified by
that Lender to the Facility Agent. This percentage rate per
annum must be certified by that Lender in its notice to the Facility Agent
as its reasonable determination of the cost (expressed as a percentage of
that Lender’s share in all Loans made from that Facility Office) of
complying with the minimum reserve requirements of the European Central
Bank in respect of Loans made from that Facility
Office.
|
|
(b)
|
If
a Lender fails to specify a rate under paragraph (a) above, the Facility
Agent will assume that the Lender has not incurred any such
cost.
|
|
4.
|
Changes
|
|
(a)
|
The
Facility Agent may, after consultation with the Owner and the Lenders,
determine and notify all the Parties of any amendment to this Schedule
which is required to reflect:
|
|
|
(i)
|
any
change in law or regulation; or
|
|
|
(ii)
|
any
requirement imposed by the Bank of England, the Financial Services
Authority or the European Central Bank (or, in any case, any successor
authority).
|
136
|
|
(b)
|
If
the Facility Agent, after consultation with the Owner, determines that the
Mandatory Cost for a Lender lending from a Facility Office in the U.K. can
be calculated by reference to a screen, the Facility Agent may notify all
the Parties of any amendment to this Agreement which is required to
reflect this.
|
137
APPENDIX
1
FORM
OF DELIVERY GENERAL ASSIGNMENT
138
APPENDIX
2
FORM
OF MORTGAGE
139
APPENDIX
3
FORM
OF CHARTER ASSIGNMENT
140
APPENDIX
4
FORM
OF SWAP AGREEMENT ASSIGNMENT
141
APPENDIX
5
FORM
OF DPP
142
APPENDIX
6
FORM
OF GENERAL ASSIGNMENT
143
APPENDIX
7
FORM
OF SHARE CHARGE
144
APPENDIX
8
FORM
OF ACCOUNTS CHARGE AGREEMENT
145
APPENDIX
9
FORM
OF EQUITY ACCOUNT CHARGE
146
APPENDIX
10
FORM
OF MANAGEMENT AGREEMENT ASSIGNMENT
147
APPENDIX
11
FORM
OF FLOATING CHARGE
148
APPENDIX
12
APPROVED
BUDGET
149
SIGNATORIES
DRILLSHIP
KITHIRA OWNERS INC. - CREDIT FACILITY AGREEMENT
Owner
Signed
by
as
attorney for
DRILLSHIP
KITHIRA OWNERS INC.
in the
presence of:
Witness:
The
Bookrunner and the Joint Mandated Lead Arranger
By:
as
authorised signatory for
DEUTSCHE
BANK AG, LONDON BRANCH
The
Joint Mandated Lead Arranger
By:
as
attorney for
DEXIA
CRÉDIT LOCAL, NEW YORK BRANCH
The
Lenders
By:
as
authorised signatory for
DEUTSCHE
BANK AG, LONDON BRANCH
By:
as
attorney for
DEXIA
CRÉDIT LOCAL, NEW YORK BRANCH
By:
as
attorney for
EKSPORTFINANS
ASA
By:
as
attorney for
THE
EXPORT-IMPORT BANK OF KOREA
The
Swap Banks
By:
as
authorised signatory for
DEUTSCHE
BANK AG, LONDON BRANCH
By:
as
attorney for
DEXIA
CRÉDIT LOCAL, NEW YORK BRANCH
The
Facility Agent
By:
as
attorney for
DEUTSCHE
BANK LUXEMBOURG S.A.
The
Security Trustee
By:
as
attorney for
DEUTSCHE
BANK AG FILIALE DEUTSCHLANDGESCHÄFT
150
