Exhibit 10.7
LOAN AGREEMENT
DATED: 2ND OCTOBER 2006
BETWEEN:
(1) TEEKAY OFFSHORE OPERATING L.P., a limited partnership formed and existing
under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered
office is at The Trust Company Complex, Ajeltake Island, PO Box 1405
Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "BORROWER"); and
(2) the banks listed in Schedule 1, each acting through its office at the
address indicated against its name in Schedule 1 (together the "LENDERS"
and each a "LENDER"); and
(3) DNB NOR BANK ASA, acting as agent (in that capacity the "AGENT");
(4) DNB NOR BANK ASA, NORDEA BANK NORGE ASA, NEW YORK BRANCH and FORTIS CAPITAL
CORP. acting as mandated lead arrangers (in that capacity each an "MLA" and
together the "MLAS");
(5) DNB NOR BANK ASA and NORDEA BANK NORGE ASA, NEW YORK BRANCH acting as
bookrunners (in that capacity each a "BOOKRUNNER" and together the
"BOOKRUNNERS"); and
(6) DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT acting as security agent (in that
capacity the "SECURITY AGENT").
WHEREAS:
Each of the Lenders has agreed to advance to the Borrower its Commitment
(aggregating, with all the other Commitments, a revolving credit facility of up
to nine hundred and forty million Dollars $940,000,000) for the general
corporate purposes of the Borrower (including but not limited to the making of
intercompany loans to its shareholders and/or unitholders and Subsidiaries).
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"ADMINISTRATION" has the meaning given to it in paragraph 1.1.3 of the
ISM Code.
"AFFILIATE" means, in relation to any entity, a Subsidiary of that
entity, a Holding Company of that entity or any other Subsidiary of
that Holding Company.
"APPROVED BROKERS" means ▇. ▇▇▇▇▇▇▇▇ & Co. Ltd, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Young
Shipbrokers Ltd, Fearnley AS, ▇.▇. ▇▇▇▇▇▇ AS and ▇.▇. ▇▇▇▇▇▇ AS.
"ASSIGNMENTS" means the deeds of assignment of Insurances, Earnings
and Requisition Compensation, the Charter Rights (if applicable) and
of the benefit of any relevant Charterer's Assignment, in respect of
each of the Vessels referred to in Clause 10.1.2 (each an
"ASSIGNMENT").
"AUTHORISATION" means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
"BAREBOAT CHARTERS" means the bareboat charters identified in Schedule
7 for certain of the Vessels only on the terms and subject to the
conditions of which the relevant Charterer will bareboat charter its
Vessel to the Bareboat Charterer.
"BAREBOAT CHARTERER" means in respect of certain Vessels either (i)
FIC and Transpetro or (ii) Petrojarl Production as identified against
the names of the relevant Vessels in Schedule 7.
"BORROWER'S ACCOUNTS" means the consolidated financial accounts of the
Borrower to be provided to the Agent pursuant to Clause 12.1.
"BREAK COSTS" means all sums payable by the Borrower from time to time
under Clause 8.3.
"BUSINESS DAY" means a day on which banks are open for business of a
nature contemplated by this Agreement (and not authorised by law to
close) in New York, London and any other financial centre which the
Agent may reasonably consider appropriate for the operation of the
provisions of this Agreement.
"CHARTER RIGHTS" in relation to a Vessel means all rights and benefits
accruing to the Charterer of that Vessel under or pursuant to the
relevant Bareboat Charter and not forming part of the Earnings.
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"CHARTERER" in respect of certain Vessels only means either UNS or TKN
as identified against the names of the relevant Vessels in Schedule 7.
"CHARTERER'S ASSIGNMENTS" means, in respect of NORDIC STAVANGER,
NORDIC BRASILIA and NORDIC SPIRIT only, assignments by the relevant
Charterer to the Owner of the Earnings and Charter Rights.
"COMMITMENT" means, in relation to a Lender, the aggregate amount of
the Loan which that Lender agrees to advance to the Borrower as its
several liability as indicated against the name of that Lender in
Schedule 1 and/or, where the context permits, the amount of the Loan
advanced by that Lender and remaining outstanding and "COMMITMENTS"
means more than one of them.
"COMMITMENT COMMISSION" means the commitment commission to be paid by
the Borrower to the Agent on behalf of the Lenders pursuant to Clause
9.1.
"COMMITMENT TERMINATION DATE" means the date being one (1) month
before the Maturity Date or such later date as the Lenders may in
their discretion agree.
"COMPLETION OF SYNDICATION" means that the Commitments have been fully
syndicated in a manner acceptable to the MLAs, as conclusively
certified in writing by the Agent.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
set out in Schedule 6.
"CURRENCY OF ACCOUNT" means, in relation to any payment to be made to
a Finance Party under a Finance Document, the currency in which that
payment is required to be made by the terms of that Finance Document.
"DEEDS OF COVENANTS" means the deeds of covenants referred to in
Clause 10.1.1. (each a "DEED OF COVENANT").
"DEFAULT" means an Event of Default or any event or circumstance
specified in Clause 13.1 which would (with the expiry of a grace
period, the giving of notice, the making of any determination under
the Finance Documents or any combination of any of the foregoing) be
an Event of Default.
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"DOC" means, in relation to the ISM Company, a valid Document of
Compliance issued for the ISM Company by the Administration under
paragraph 13.2 of the ISM Code.
"DOLLARS", "US$" and "$" each means available and freely transferable
and convertible funds in lawful currency of the United States of
America.
"DRAWDOWN DATE" means the date on which a Drawing is advanced under
Clause 4.
"DRAWDOWN NOTICE" means a notice substantially in the form set out in
Schedule 4.
"DRAWING" means any one amount advanced or to be advanced pursuant to
a Drawdown Notice or, where the context permits, the amount advanced
and for the time being outstanding and "DRAWINGS" means more than one
of them.
"EARNINGS" in relation to a Vessel means all hires, freights, pool
income and other sums payable to or for the account of the Owner or
the relevant Charterer in respect of that Vessel including (without
limitation) all remuneration for salvage and towage services,
demurrage and detention moneys, contributions in general average,
compensation in respect of any requisition for hire, and damages and
other payments (whether awarded by any court or arbitral tribunal or
by agreement or otherwise) for breach, termination or variation of any
contract for the operation, employment or use of that Vessel.
"ENCUMBRANCE" means a mortgage, charge, assignment, pledge, lien, or
other security interest securing any obligation of any person or any
other agreement or arrangement having a similar effect.
"ENVIRONMENTAL AFFILIATE" means an agent or employee of the Owner or a
person in a contractual relationship with the Owner in respect of the
Vessel owned by it (including without limitation, the operation of or
the carriage of cargo of such Vessel).
"ENVIRONMENTAL APPROVALS" means any present or future permit, licence,
approval, ruling, variance, exemption or other authorisation required
under the applicable Environmental Laws.
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"ENVIRONMENTAL CLAIM" means any and all enforcement, clean-up,
removal, administrative, governmental, regulatory or judicial actions,
orders, demands or investigations instituted or completed pursuant to
any Environmental Laws or Environmental Approvals together with any
claims made by any third person relating to damage, contribution, loss
or injury resulting from any Environmental Incident.
"ENVIRONMENTAL INCIDENT" means:
(a) any release of Environmentally Sensitive Material from a Vessel;
or
(b) any incident in which Environmentally Sensitive Material is
released from a vessel other than a Vessel and which involves a
collision between a Vessel and such other vessel or some other
incident of navigation or operation, in either case, in
connection with which the relevant Vessel is actually or
potentially liable to be arrested, attached, detained or
injuncted and/or where any guarantor, any manager (or any
sub-manager of such Vessel) or any of its officers, employees or
other persons retained or instructed by it (or such sub-manager)
are at fault or allegedly at fault or otherwise liable to any
legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is
released otherwise than from such Vessel and in connection with
which that Vessel is actually or potentially liable to be
arrested and/or where any guarantor, any manager (or any
sub-manager of the relevant Vessel) or any of its officers,
employees or other persons retained or instructed by it (or such
sub-manager) are at fault or allegedly at fault or otherwise
liable to any legal or administrative action.
"ENVIRONMENTAL LAWS" means all present and future laws, regulations,
treaties and conventions of any applicable jurisdiction which:
(a) have as a purpose or effect the protection of, and/or prevention
of harm or damage to, the environment;
(b) relate to the carriage of Environmentally Sensitive Material or
to actual or threatened releases of Environmentally Sensitive
Material;
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(c) provide remedies or compensation for harm or damage to the
environment; or
(d) relate to Environmentally Sensitive Materials or health or safety
matters.
"ENVIRONMENTALLY SENSITIVE MATERIAL" means (i) oil and oil products
and (ii) any other waste, pollutant, contaminant or other substance
(including any liquid, solid, gas, ion, living organism or noise) that
may be harmful to human health or other life or the environment or a
nuisance to any person or that may make the enjoyment, ownership or
other territorial control of any affected land, property or waters
more costly for such person to a material degree.
"EVENT OF DEFAULT" means any of the events or circumstances set out in
Clause 13.1.
"EXECUTION DATE" means the date on which this Agreement is executed by
each of the parties hereto.
"FACILITY" means the reducing revolving credit facility made available
by the Lenders to the Borrower pursuant to this Agreement.
"FACILITY OUTSTANDINGS" means the total of all Drawings made at that
time, to the extent not reduced by repayments, prepayments and
voluntary reductions.
"FACILITY PERIOD" means the period beginning on the date of this
Agreement and ending on the date when the whole of the Indebtedness
has been repaid in full and the Security Parties have ceased to be
under any further actual or contingent liability to the Finance
Parties under or in connection with the Finance Documents.
"FEE LETTER" means the letters dated 30 August 2006 between the
Borrower and the Agent and/or the Bookrunners and/or the MLAs as
applicable setting out any of the fees referred to in Clause 9.
"FIC" means Fronape International Company of ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
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"FINANCE DOCUMENTS" means this Agreement, the Security Documents, any
Fee Letter and any other document designated as such by the Agent and
the Borrower and "FINANCE DOCUMENT" means any one of them.
"FINANCE PARTIES" means the Agent, the Security Agent, the MLAs, the
Bookrunners and the Lenders and "FINANCE PARTY" means any one of them.
"FIRST DRAWDOWN DATE" means the date on which the first Drawing is
advanced under Clause 4.
"FREE LIQUIDITY" means cash, cash equivalents and marketable
securities of maturities less than one (1) year to which the Group
shall have free, immediate and direct access each as reflected in the
Borrower's most recent quarterly management accounts forming part of
the Borrower's Accounts.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GROUP" means the Borrower and each of its Subsidiaries.
"GUARANTEE" means the guarantee and indemnity referred to in Clause
10.1.3.
"GUARANTOR" means the Owner and/or (where the context permits) any
other person who shall at any time during the Facility Period give to
the Lenders or to the Security Agent on their behalf a guarantee
and/or indemnity for the repayment of all or part of the Indebtedness.
"HEAD CHARTER", in respect of NORDIC STAVANGER, NORDIC BRASILIA and
NORDIC SPIRIT only, means the charter between the Owner and the
relevant Charterer.
"HOLDING COMPANY" means, in relation to any entity, any other entity
in respect of which it is a Subsidiary.
"INDEBTEDNESS" means the aggregate from time to time of: the amount of
the Loan outstanding; all accrued and unpaid interest on the Loan; and
all other sums of any nature (together with all accrued and unpaid
interest on any of those sums) which from time to time may be payable
by the Borrower to any of the Finance Parties under all or any of the
Finance Documents.
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"INITIAL VESSELS" means the Vessels listed in Schedule 7 Part 1 and
everything now or in the future belonging to them on board and ashore
(each an "INITIAL VESSEL").
"INSURANCES" in relation to a Vessel means all policies and contracts
of insurance (including all entries in protection and indemnity or war
risks associations) which are from time to time taken out or entered
into in respect of or in connection with that Vessel or her increased
value and (where the context permits) all benefits under such
contracts and policies, including all claims of any nature and returns
of premium.
"INTEREST PAYMENT DATE" means each date for the payment of interest in
accordance with Clause 7.7.
"INTEREST PERIOD" means each period for the payment of interest
selected by the Borrower or agreed by the Agent pursuant to Clause 7.
"ISM CODE" means the International Management Code for the Safe
Operation of Ships and for Pollution Prevention.
"ISM COMPANY" means, at any given time, the company responsible for a
Vessel's compliance with the ISM Code under paragraph 1.1.2 of the ISM
Code.
"ISPS" CODE" means the International Ship and Port Facility Security
Code.
"ISPS COMPANY" means, at any given time, the company responsible for a
Vessel's compliance with the ISPS Code.
"ISSC" means a valid international ship security certificate for a
Vessel issued under the ISPS Code.
"LAW" or "LAW" means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other legislative or
quasi-legislative rule or measure, or any order or decree of any
government, judicial or public or other body or authority, or any
directive, code of practice, circular, guidance note or other
direction issued by any competent authority or agency (whether or not
having the force of law).
"LIBOR" means:
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(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for any Interest Period) the
arithmetic mean of the rates (rounded upwards to four decimal
places) as supplied to the Agent at its request quoted by the
Reference Banks (or by two of them if one is unable to quote) to
leading banks in the London interbank market,
at 11.00 a.m. London time two (2) Business Days before the first day
of the relevant Interest Period for the offering of deposits in
Dollars in an amount comparable to the Loan (or any relevant part of
the Loan) and for a period comparable to the relevant Interest Period.
"LOAN" means the aggregate amount advanced or to be advanced by the
Lenders to the Borrower under Clause 4 or, where the context permits,
the amount advanced and for the time being outstanding.
"MAJORITY LENDERS" means a Lender or Lenders whose Commitments
aggregate more than sixty six and two thirds per cent (66 2/3%) of the
aggregate of all the Commitments.
"MANAGEMENT AGREEMENT" means any agreement(s) for the commercial
and/or technical management of the Vessels entered into between the
Owner and a company which is not controlled either by Teekay Shipping
Corporation or the Borrower.
"MANAGERS" in relation to each Vessel means a management company which
is controlled by Teekay Shipping Corporation or such other commercial
and/or technical managers of the Vessels nominated by the Borrower as
the Agent acting on the instructions of the Majority Lenders may
approve such approval not to be unreasonably withheld or delayed.
"MANDATORY COST" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 3.
"MARGIN" means nought point six two five per cent (0.625%) per annum.
"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect on:
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(a) the financial condition, assets, prospects or business of any
Security Party or on the consolidated financial condition,
assets, prospects or business of the Group;
(b) the ability of any Security Party to perform and comply with its
obligations under any Security Document or to avoid any Event of
Default;
(c) the validity, legality or enforceability of any Security
Document; or
(d) the validity, legality or enforceability of any security
expressed to be created pursuant to any Security Document or the
priority and ranking of any such security,
provided that, in determining whether any of the forgoing
circumstances shall constitute such a material adverse change or
material adverse effect for the purposes of this definition, the
Finance Parties shall consider such circumstance in the context of (x)
the Group taken as a whole and (y) the ability of the Borrower and the
Guarantor to perform each of their obligations under the Security
Documents.
"MATURITY DATE" means the earlier of (i) the date falling ninety six
(96) months after the First Drawdown Date and (ii) 31 October 2014.
"MATERIAL SUBSIDIARY" means:
any Subsidiary of the Borrower whose assets, as determined in
accordance with GAAP and as shown from the most recent financial
statements available to the Agent relating to it, as multiplied by the
Relevant Percentage in respect of such Subsidiary, equal or exceed 10%
of the aggregate value of the assets of the Group as determined in
accordance with GAAP and as shown from the most recently available
financial statements of the Group,
provided that:
(i) in respect of any Subsidiary of the Borrower, only the value of
its assets as multiplied by the Relevant Percentage in respect of
such
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Subsidiary shall be taken into account in the computation of the
value of the assets of the Group;
(ii) a statement by the auditors of the Borrower to the effect that,
in their opinion, a Subsidiary of the Borrower is or is not or
was or was not at any particular time a Material Subsidiary
shall, in the absence of manifest error, be conclusive and
binding on each of the parties to this Agreement.
"MAXIMUM AMOUNT" means
(i) prior to the Step-up Date, five hundred and twenty million
Dollars ($520,000,000); and
(ii) on or after the Step-up Date, nine hundred and forty million
Dollars ($940,000,000),
as reduced from time to time in accordance with Clause 3.4 and/or
Clause 7.9.5.
THE "MLP" means Teekay Offshore Partners L.P.
"MORTGAGES" means the statutory mortgages referred to in Clause 10.1.1
together with the Deeds of Covenants.
"NECESSARY AUTHORISATIONS" means all Authorisations of any person
including any government or other regulatory authority required by
applicable Law to enable it to:
(a) lawfully enter into and perform its obligations under the
Security Documents to which it is party;
(b) ensure the legality, validity, enforceability or admissibility in
evidence in England and, if different, its jurisdiction of
incorporation, of such Security Documents to which it is party;
and
(c) carry on its business from time to time.
"OWNER" means Teekay Navion Offshore Loading Pte Ltd, a company
incorporated according to the law of Singapore with company
registration no.
11
20041820N whose registered office is at ▇ ▇▇▇▇▇▇▇ ▇▇▇, #▇▇-▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at all times to be a Subsidiary of the
Borrower.
"PETROATLANTIC" means Petroatlantic L.L.C. of Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"PETROL GEO" means Petroleum Geo Services ASA of Strandveien 50,
Postboks 89, N-1324 Lysaker.
"PETROJARL PRODUCTION" means Petrojarl Production AS of ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (formerly known as Golar-Nor Offshore AS).
"PETROJARL" means Petrojarl ASA of ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇.
"PETRONORDIC" means Petronordic LLC of Trust Company Complex,
Ajelktake Road, Ajeltake Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇.
"PERMITTED ENCUMBRANCE" means (i) any Encumbrance which has the prior
written approval of the Agent acting on the instructions of all the
Lenders or (ii), or any liens for current crews' wages and salvage and
liens incurred in the ordinary course of trading a Vessel up to an
aggregate amount at any time not exceeding ten million Dollars
($10,000,000).
"PRE-APPROVED CLASSIFICATION SOCIETY" means any of Det norske Veritas,
Lloyds Register, American Bureau of Shipping (ABS), Germanischer ▇▇▇▇▇
or Bureau Veritas or such other classification society acceptable to
the Majority Lenders.
"PRE-APPROVED FLAG" means ▇▇▇▇▇▇▇▇ Islands, Norwegian International
Ship Registry, Liberia, Panama, Isle of Man, Cayman Islands, Bermuda,
Bahamas, Singapore or (in the case of "NAVION STAVANGER", "NORDIC
BRASILIA", "NORDIC SPIRIT" and any other Vessels on charter to
Transpetro) Registro Especial Brasileiro
"PROPORTIONATE SHARE" means, at any time, the proportion which a
Lender's Commitment (whether or not advanced) then bears to the
aggregate Commitments of all the Lenders (whether or not advanced)
being on the Execution Date the percentage indicated against the name
of that Lender in Schedule 1.
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"QUIET ENJOYMENT LETTERS" means those letters between the Agent and
the Bareboat Charterer relating to those Vessels subject to Bareboat
Charters.
"REDUCTION DATE" means each date falling at consecutive six monthly
intervals after the earlier to occur of (i) the First Drawdown Date
and (ii) 31 October 2006.
"REFERENCE BANKS" means, in relation to LIBOR, the principal London
offices of each of the MLAs or such other banks as may be appointed by
the Agent in consultation with the Borrower.
"RELEVANT DOCUMENTS" means the Finance Documents, the Bareboat
Charters, the Charterer's Assignments, the Quiet Enjoyment Letters and
the Management Agreements.
"RELEVANT PERCENTAGE" means, in respect of any Subsidiary of the
Borrower at any time, the percentage of the equity share capital or
the partnership capital, as the case may be, of such Subsidiary which
is beneficially owned (free from Encumbrances) by the Borrower at such
time.
"RELEVANT REDUCTION AMOUNT" means, in respect of each Vessel, a figure
equal to (x) a fraction in which (i) the numerator is the market value
of such Vessel (based on the most recent Valuation) and (ii) the
denominator is the aggregate market value of all the Vessels (based on
the most recent Valuations) multiplied by (y) the Maximum Amount.
"REPLACEMENT VESSEL" means a vessel acceptable to the Agent acting on
the instructions of the Majority Lenders.
"REQUISITION COMPENSATION" in relation to a Vessel means all
compensation or other money which may from time to time be payable to
the Owner as a result of that Vessel being requisitioned for title or
in any other way compulsorily acquired (other than by way of
requisition for hire).
"SAME DAY DRAWING", means, in respect of the first drawing only, a
Drawing requested by the Borrower prior to 1600 hours (New York time)
on the day before the First Drawdown Date and made by the Lenders on
the First Drawdown Date.
"SCREEN RATE" means in relation to LIBOR, the British Bankers'
Association Interest Settlement Rate for the relevant currency and
period displayed on the
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appropriate page of the Reuters page LIBOR 01 (or such other page or
pages which replace(s) such page for the purposes of displaying
offered rates of leading banks, for deposits in Dollars of amounts
equal to the amount of the relevant Drawing for a period equal in
length to the relevant Interest Period.
"SECURITY DOCUMENTS" means the Mortgages, the Deeds of Covenants, the
Assignments, the Guarantee, or (where the context permits) any one or
more of them and any other agreement or document which may at any time
be executed by any person as security for the payment of all or any
part of the Indebtedness and "SECURITY DOCUMENT" means any one of
them.
"SECURITY PARTIES" means at any relevant time, the Borrower, the
Guarantor and any other person who may at any time during the Facility
Period be liable for, or provide security for, all or any part of the
Indebtedness (but for the avoidance of doubt shall not include the
Charterer or Bareboat Charterer), and "SECURITY PARTY" means any one
of them.
"SMC" means a valid safety management certificate issued for a Vessel
by or on behalf of the Administration under paragraph 13.7 of the ISM
Code.
"SMS" means a safety management system for a Vessel developed and
implemented in accordance with the ISM Code.
"STEP-UP DATE" means the date on which the Agent confirms that both
(i) all of the conditions set out in Part III of Schedule 2 have been
satisfied and (ii) Completion of Syndication has occurred.
"STEP-UP VESSELS" means the Vessels listed in Schedule 7 Part II and
everything now or in the future belonging to them on board and ashore
(each a "STEP-UP VESSEL").
"SUBSIDIARY" means a subsidiary undertaking, as defined in section 736
Companies Act 1985 or any analogous definition under any other
relevant system of law.
"TAX" means any tax, levy, impost, duty or other charge or withholding
of a similar nature (including any penalty or interest payable in
connection with any
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failure to pay or any delay in paying any of the same) and "TAXATION"
shall be interpreted accordingly.
"TKN" means Teekay Norway AS of Verven 4, N-4014, ▇.▇. ▇▇▇ ▇▇▇▇,
▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"TOTAL DEBT" means the aggregate of:-
(a) the amount calculated in accordance with GAAP shown as each of
"long term debt", "short term debt" and "current portion of long
term debt" on the latest consolidated balance sheet of the
Borrower; and
(b) the amount of any liability in respect of any lease or hire
purchase contract entered into by the Borrower or any of its
Subsidiaries which would, in accordance with GAAP, be treated as
a finance or capital lease (excluding any amounts applicable to
leases to the extent that the lease obligations are secured by a
security deposit which is held on the balance sheet under
"RESTRICTED CASH").
"TOTAL LOSS" in relation to a Vessel means:
(a) an actual, constructive, arranged, agreed or compromised total
loss of that Vessel; or
(b) the requisition for title or compulsory acquisition,
nationalisation or expropriation of that Vessel by or on behalf
of any government or other authority (other than by way of
requisition for hire); or
(c) the capture, seizure, arrest, detention or confiscation of that
Vessel unless the Vessel is released and returned to the
possession of the Owner within ninety (90) days after the
capture, seizure, arrest, detention or confiscation in question.
"TRANSFER CERTIFICATE" means a certificate substantially in the form
set out in Schedule 5 or any other form agreed between the Agent and
the Borrower.
"TRANSFER DATE" means, in relation to any Transfer Certificate, the
date for the making of the Transfer specified in the schedule to such
Transfer Certificate.
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"TRANSPETRO" means Petrobras Transporte S.A. - Transpetro of Av
Presidente ▇▇▇▇▇▇, 328, 20091-060 Rio de Janeiro, ▇.▇. Brazil.
"TRUST PROPERTY" means:
(a) all benefits derived by the Security Agent from Clause 10; and
(b) all benefits arising under (including, without limitation, all
proceeds of the enforcement of) each of the Security Documents,
with the exception of any benefits arising solely for the benefit of
the Security Agent.
"UNS" means ▇▇▇▇▇▇ Nordic Shipping AS of ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ a company formed by the merger under Norwegian law of ▇▇▇▇▇▇
Nordic Investment AS and ▇▇▇▇▇▇ Nordic Shipping AS.
"VALUATION" means in relation to a Vessel or a Replacement Vessel, the
written valuation of that Vessel or Replacement Vessel expressed in
Dollars prepared by one of the Approved Brokers (or such other firm of
reputable independent shipbrokers as may be acceptable to the Majority
Lenders) to be nominated by the Borrower, such nomination to be
subject to the approval of the Agent. Such valuations shall be
prepared at the Borrower's expense, without a physical inspection, on
the basis of a sale for prompt delivery for cash at arm's length
between a willing buyer and a willing seller without the benefit of
any charterparty or other engagement.
"VESSELS" means the vessels listed in Schedule 7 (comprising the
Initial Vessels and the Step-up Vessels and including any Replacement
Vessel) and everything now or in the future belonging to them on board
and ashore (each a "VESSEL)".
"WSJ PRIME RATE" means the "Prime Rate" as published in the printed
copy of the Wall Street Journal on any particular day as the same may
be adjusted from time to time.
1.2 In this Agreement:
1.2.1 words denoting the plural number include the singular and vice
versa;
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1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and vice
versa;
1.2.3 references to Recitals, Clauses and Schedules are references to
recitals, clauses and schedules to or of this Agreement;
1.2.4 references to this Agreement include the Recitals and the
Schedules;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be
ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation, to
all or any of the Relevant Documents) are, unless the context
otherwise requires, references to that document as amended,
supplemented, novated or replaced from time to time;
1.2.7 references to statutes or provisions of statutes are references
to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted;
1.2.8 references to any Finance Party include its successors,
transferees and assignees;
1.2.9 a time of day (unless otherwise specified) is a reference to New
York time.
1.3 OFFER LETTER
This Agreement supersedes the terms and conditions contained in any
correspondence relating to the subject matter of this Agreement
exchanged between any Finance Party and the Borrower or their
representatives prior to the date of this Agreement.
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2 THE LOAN AND ITS PURPOSES
2.1 AMOUNT Subject to the terms of this Agreement, each of the Lenders
agrees to make available to the Borrower its Commitment of a revolving
credit in an aggregate amount not exceeding the Maximum Amount at any
one time.
2.2 FINANCE PARTIES' OBLIGATIONS The obligations of each Finance Party
under the Finance Documents are several. Failure by a Finance Party to
perform its obligations under the Finance Documents does not affect
the obligations of any other party to the Finance Documents. No
Finance Party is responsible for the obligations of any other Finance
Party under the Finance Documents.
2.3 PURPOSES The Borrower shall apply the Loan for the purpose referred to
in the Recital.
2.4 MONITORING No Finance Party is bound to monitor or verify the
application of any amount borrowed under this Agreement.
3 CONDITIONS OF UTILISATION
3.1 CONDITIONS PRECEDENT Before any Lender shall have any obligation to
advance any Drawing under the Facility the Borrower shall deliver or
cause to be delivered to or to the order of the Agent all of the
documents and other evidence listed in Part I of Schedule 2.
3.2 FURTHER CONDITIONS PRECEDENT The Lenders will only be obliged to
advance a Drawing if on the date of the Drawdown Notice and on the
proposed Drawdown Date:
3.2.1 no Default is continuing or would result from the advance of
that Drawing; and
3.2.2 the representations made by the Borrower under Clause 11 are
true in all material respects.
3.3 DRAWING LIMIT The Lenders will only be obliged to advance a Drawing
if:
3.3.1 no other Drawing has been made on the same Business Day;
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3.3.2 that Drawing will not result in there being more than seven
Drawings outstanding at any one time;
3.3.3 that Drawing is not less than five million Dollars ($5,000,000)
and in an integral multiple of one million Dollars ($1,000,000);
and
3.3.4 that Drawing will not increase the outstanding amount of the
Loan to a sum in excess of the Maximum Amount.
The First Drawdown Date must occur on or before 31 October 2006 or
such later date as the Majority Lenders shall agree.
3.4 FACILITY REDUCTION
3.4.1 The amount of the Facility available to the Borrower for drawing
under this Agreement shall, subject to the provisions of Clause
3.4.5, be five hundred and twenty million Dollars ($520,000,000)
prior to the Step-up Date and nine hundred and forty million
Dollars ($940,000,000) during the period from the Step-up Date
until the first Reduction Date. On the Reduction Dates the amount
of the Facility available for drawing shall be reduced by the
amounts set out in Schedule 8 (the "INITIAL REDUCTION AMOUNTS").
On the Maturity Date the Facility available shall be reduced to
zero. Subject to the proviso hereto, the mandatory reductions in
the amount of the Facility available for drawing required
pursuant to this Clause will be made in the amounts and at the
times specified whether or not the Maximum Amount is reduced
pursuant to Clause 3.4.2, Clause 3.4.3, Clause 3.4.4, Clause 6.1
or Clause 7.9. PROVIDED ALWAYS THAT any reductions pursuant to
Clause 3.4.2 (voluntary reductions), Clause 3.4.3 (sale) or
Clause 3.4.4 (Total Loss) shall be applied to the remaining
mandatory reductions hereunder on a pro rata basis.
3.4.2 The Borrower may voluntarily cancel the Maximum Amount in whole
or in part in an amount of not less than five million Dollars
($5,000,000) such amount to be in integral multiples of one
million Dollars ($1,000,000) (or as otherwise may be agreed by
the Agent), provided that it has first given to the Agent not
fewer than five (5) Business Days' prior written notice expiring
on a Business Day (the "CANCELLATION DATE") of
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its desire to reduce the Maximum Amount; such notice once
received by the Agent shall be irrevocable and shall oblige the
Borrower to make payment of all interest and Commitment
Commission accrued on the amount so cancelled up to and including
the Cancellation Date together with any Break Costs in respect of
such cancelled amount if the Cancellation Date is not the final
day of an Interest Period. Any such reduction in the Maximum
Amount shall not be reversed. If, as a result of any such
cancellation, the Loan outstanding would exceed the Maximum
Amount, the Borrower shall, on the Cancellation Date, prepay such
amount of the Loan as will ensure that the Loan outstanding is
not greater than the Maximum Amount.
3.4.3 In the event of a sale or disposal of a Vessel or the Agent
having received not less than 5 Business Days' notice from the
Borrower requesting that the security relating to a Vessel be
released and discharged (a "RELEASED VESSEL"), the Maximum Amount
shall be reduced by the Relevant Reduction Amount applicable to
that Vessel, such reduction to be applied on a pro rata basis
against the Initial Reduction Amounts as reduced from time to
time in accordance with this clause 3.4. Such reduction shall be
made in the case of a sale or disposal of such Vessel on the date
of such sale or disposal and in the case of a Released Vessel on
the date proposed by the Borrower for release and discharge of
the security relating to that Vessel unless the Vessel or
Released Vessel in question is replaced on or prior to the sale,
disposal or release with a Replacement Vessel and in such case of
replacement any security held by the Agent (whether directly or
indirectly) from the Owner and over such Vessel or Released
Vessel is reconstituted immediately after the sale to the new
owner or after the release and discharge of security (as the case
may be) or over the Replacement Vessel in substantially identical
form, and the Agent obtains favourable legal opinions in respect
of such reconstituted security. If, as a result of any reduction
in the Maximum Amount pursuant to this Clause, the Loan
outstanding would exceed the Maximum Amount, the Borrower shall,
on the date of the sale, disposal or replacement, prepay such
amount of the Loan as will ensure that the Loan outstanding is
not greater than the Maximum Amount. Any such prepayment shall
oblige the Borrower to
20
make payment of all interest and Commitment Commission accrued on
the amount so reduced up to and including the date of reduction
together with any Break Costs in respect of such reduced amount
if the date of such reduction is not the final day of an Interest
Period. Any such reduction in the Maximum Amount shall not be
reversed.
3.4.4 In the event that any Vessel becomes a Total Loss, on the
earlier to occur of (a) the date of receipt of the proceeds of
the Total Loss and (b) the date falling one hundred and eighty
(180) days after the occurrence of the Total Loss (the "REDUCTION
DATE"), the Maximum Amount shall (subject to the proviso hereto)
be reduced by the Relevant Reduction Amount in respect of such
Vessel. Any such reductions in the Maximum Amount shall not be
reversed. If, as a result of any reduction in the Maximum Amount
pursuant to this Clause the Loan outstanding would exceed the
Maximum Amount, the Borrower shall, on the earlier to occur of
(i) the date on which the Owner receives the proceeds of such
Total Loss and (ii) the one hundred and eightieth day after the
date of such Total Loss occurring, prepay such amount of the Loan
as will ensure that the Loan outstanding is equal to or less than
the Maximum Amount. Any such prepayment shall not be reborrowed
and Clause 8.3 shall apply to any such prepayment. PROVIDED
ALWAYS that if there is an investment in a Replacement Vessel on
or prior to the Reduction Date, and a guarantee from the owner of
the Replacement Vessel (in substantially the same form as the
Guarantee or such other form as the Majority Lenders may require
at that time) and security over such Replacement Vessel
acceptable to the Majority Lenders in their absolute discretion
is also executed and delivered either prior to or on the
Reduction Date, then the reduction in the Maximum Amount shall
not apply.
3.4.5 To the extent that repayments or prepayments made by the
Borrower to the Agent in accordance with this Agreement reduce
the Loan outstanding to less than the Maximum Amount, the
Borrower shall again be entitled to make Drawings up to the
Commitment Termination Date in accordance with and subject to the
terms of this Agreement. Any part of the Facility which is
undrawn on the Commitment Termination Date shall be automatically
cancelled.
21
3.4.6 Simultaneously with each reduction of the Maximum Amount in
accordance with Clause 3.4.1, Clause 3.4.2, Clause 3.4.3 or
Clause 3.4.4 (as the case may be), the Commitment of each Lender
will reduce so that the Commitments of the Lenders in respect of
the reduced Maximum Amount remain in accordance with their
respective Proportionate Shares.
3.5 TERMINATION DATE No Lender shall be under any obligation to advance
all or any part of its Commitment after the Commitment Termination
Date.
3.6 CONDITIONS SUBSEQUENT The Borrower undertakes to deliver or to cause
to be delivered to the Agent:
3.6.1 on, or as soon as practicable after, the First Drawdown Date the
additional documents and other evidence listed in Part II of
Schedule 2; and
3.6.2 on, or as soon as practicable after, the Step-up Date the
additional documents and other evidence listed in Part IV of
Schedule 2.
3.7 NO WAIVER If the Lenders in their sole discretion agree to advance a
Drawing to the Borrower before all of the documents and evidence
required by Clause 3.1 have been delivered to or to the order of the
Agent, the Borrower undertakes to deliver all outstanding documents
and evidence to or to the order of the Agent no later than the date
specified by the Agent.
The advance of all or any part of the Loan under this Clause 3.7 shall
not be taken as a waiver of the Lenders' right to require production
of all the documents and evidence required by Clause 3.1.
3.8 FORM AND CONTENT All documents and evidence delivered to the Agent
under this Clause 3 shall:
3.8.1 be in form and substance reasonably acceptable to the Agent; and
3.8.2 if reasonably required by the Agent, be certified, notarised,
legalised or attested in a manner acceptable to the Agent.
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4 ADVANCE
4.1 DRAWDOWN REQUEST The Borrower may request a Drawing to be advanced in
one amount on any Business Day prior to the Commitment Termination
Date by delivering to the Agent a duly completed Drawdown Notice not
more than ten (10) and not fewer than three (3) Business Days before
the proposed Drawdown Date save in respect of a Same Day Drawing.
4.2 LENDERS' PARTICIPATION Subject to Clauses 2 and 3, the Agent shall
promptly notify each Lender of the receipt of a Drawdown Notice,
following which each Lender shall advance its Proportionate Share of
the relevant Drawing to the Borrower through the Agent on the relevant
Drawdown Date.
5 REPAYMENT
5.1 REPAYMENT OF EACH DRAWING The Borrower agrees to repay each Drawing to
the Agent for the account of the Lenders on the last day of the
Interest Period in respect of that Drawing unless the Borrower selects
a further Interest Period for that Drawing in accordance with Clause 7
provided that the Borrower shall not be permitted to select such a
further Interest Period if a Default has occurred and shall then be
obliged to repay such Drawing on the last day of its then current
Interest Period. The Borrower shall on the Maturity Date repay to the
Agent as agent for the Lenders all Facility Outstandings.
5.2 REBORROWING Amounts of the Loan which are repaid or prepaid shall be
available for reborrowing in accordance with Clause 3 prior to the
Commitment Termination Date.
6 PREPAYMENT
6.1 ILLEGALITY If it becomes unlawful in any jurisdiction for a Lender to
fund or maintain its Commitment as contemplated by this Agreement or
to fund or maintain the Loan:
6.1.1 that Lender shall promptly notify the Agent of that event;
6.1.2 upon the Agent notifying the Borrower, the Commitment of that
Lender (to the extent not already advanced) will be immediately
cancelled; and
23
6.1.3 the Borrower shall repay that Lender's Proportionate Share of
any Drawing on the last day of its current Interest Period or, if
earlier, the date specified by that Lender in the notice
delivered to the Agent and notified by the Agent to the Borrower
(being no earlier than the last day of any applicable grace
period permitted by law) and the Maximum Amount shall be reduced
by the amount of that Lender's Commitment in the Loan. Prior to
the date on which repayment is required to be made under this
Clause 6.1.3 the affected Lender shall negotiate in good faith
with the Borrower to find an alternative method or lending base
in order to maintain the Facility.
6.2 VOLUNTARY PREPAYMENT OF LOAN The Borrower may prepay the whole or any
part of a Drawing (but, if in part, being an amount that reduces that
Drawing by a minimum amount of five million Dollars ($5,000,000))
provided that it gives the Agent not less than three (3) Business
Days' prior notice.
6.3 RESTRICTIONS Any notice of prepayment given under this Clause 6 shall
be irrevocable and, unless a contrary indication appears in this
Agreement, shall specify the date or dates upon which the relevant
prepayment is to be made and the amount of that prepayment.
Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Break
Costs, without premium or penalty.
If the Agent receives a notice under this Clause 6 it shall promptly
forward a copy of that notice to the Borrower or the Lenders, as
appropriate.
6.4 MANDATORY PREPAYMENT If at any time the Facility Outstandings shall
exceed the Maximum Amount the Borrower shall immediately prepay to the
Agent on behalf of the Lenders such amounts as will ensure that the
Facility Outstandings do not exceed the Maximum Amount and shall pay
to the Lenders all interest accrued on the amount prepaid up to and
including the date on which such prepayment occurred.
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7 INTEREST
7.1 INTEREST PERIODS The period during which each Drawing shall be
outstanding under this Agreement shall be an Interest Period of one,
three or six months' duration, as selected by the Borrower in the
Drawdown Notice in respect of the Drawing in question, or such other
duration as may be agreed by the Agent (acting on the instructions of
all the Lenders). Not more than five one (1) month Interest Periods
may be selected by the Borrower in each twelve (12) month period.
7.2 BEGINNING AND END OF INTEREST PERIODS The first Interest Period in
respect of each Drawing shall begin on the Drawdown Date of that
Drawing and shall end on the last day of the Interest Period selected
in accordance with Clause 7.1. Any subsequent Interest Period selected
in respect of each Drawing shall commence on the day following the
last day of its previous Interest Period and shall end on the last day
of its current Interest Period selected in accordance with Clause 7.1.
7.3 INTEREST PERIODS TO MEET MATURITY DATE If an Interest Period for a
Drawing would otherwise expire after the Maturity Date, the Interest
Period for that Drawing shall expire on the Maturity Date.
7.4 NON-BUSINESS DAYS If an Interest Period would otherwise end on a day
which is not a Business Day, that Interest Period will instead end on
the next Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).
7.5 INTEREST RATE During each Interest Period interest shall accrue on the
relevant Drawing at the rate determined by the Agent to be
(i) the WSJ Prime Rate in the case of a Same Day Drawing; or
(ii) in all other cases the aggregate of (a) the Margin, (b) LIBOR and
(c) the Mandatory Cost, if applicable.
7.6 FAILURE TO SELECT INTEREST PERIOD If the Borrower at any time fails to
select or agree an Interest Period in accordance with Clause 7.1, the
interest rate applicable shall be three (3) months.
25
7.7 ACCRUAL AND PAYMENT OF INTEREST Interest shall accrue from day to day,
shall be calculated on the basis of a 360 day year and the actual
number of days elapsed (or, in any circumstance where market practice
differs, in accordance with the prevailing market practice) and shall
be paid by the Borrower to the Agent for the account of the Lenders on
the last day of each Interest Period and, if the Interest Period is
longer than three months, on the dates falling at three monthly
intervals after the first day of that Interest Period.
7.8 DEFAULT INTEREST If the Borrower fails to pay any amount payable by it
under a Finance Document on its due date, interest shall accrue on the
overdue amount from the due date, subject to any applicable grace
period, up to the date of actual payment (both before and after
judgment) at a rate which is one point five per cent (1.5%) higher
than the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Drawing for successive
Interest Periods, each selected by the Agent (acting reasonably). Any
interest accruing under this Clause 7.8 shall be immediately payable
by the Borrower on demand by the Agent. If unpaid, any such interest
will be compounded with the overdue amount at the end of each Interest
Period applicable to that overdue amount but will remain immediately
due and payable.
7.9 CHANGES IN MARKET CIRCUMSTANCES If at any time the Agent determines
(which determination shall be final and conclusive and binding on the
Borrower) that, by reason of changes affecting the London interbank
market, adequate and fair means do not exist for determining the rate
of interest on a Drawing for any Interest Period:
7.9.1 the Agent shall give notice to the Lenders and the Borrower of
the occurrence of such event; and
7.9.2 the rate of interest on each Lender's Commitment in the relevant
Drawing for that Interest Period shall be the rate per annum
which is the sum of:
(a) the Margin; and
(b) the rate notified to the Agent by that Lender as soon as
practicable, and in any event before interest is due to be
paid in respect of that Interest Period, to be that which
expresses as a
26
percentage rate per annum the cost to that Lender of funding
its Commitment in the relevant Drawing from whatever source
it may reasonably select; and
(c) the Mandatory Cost, if any, applicable to that Lender's
Commitment,
PROVIDED THAT if the resulting rate of interest on any Commitment is
not acceptable to the Borrower:
7.9.3 the Agent on behalf of the Lenders will negotiate with the
Borrower in good faith with a view to modifying this Agreement to
provide a substitute basis for determining the rate of interest
which is financially a substantial equivalent to the basis
provided for in this Agreement;
7.9.4 any substitute basis agreed pursuant to Clause 7.9.3 shall be
binding on all the parties to this Agreement and shall apply to
all Commitments in the relevant Drawing; and
7.9.5 if, within thirty (30) days of the giving of the notice referred
to in Clause 7.9.1, the Borrower and the Agent fail to agree in
writing on a substitute basis for determining the rate of
interest in respect of the relevant Drawing, the relevant Lender
shall cease to be obliged to advance its Proportionate Share of
that Drawing, but, if it has already been advanced, the Borrower
will immediately prepay that Proportionate Share of that Drawing,
together with any Break Costs, and the Maximum Amount shall be
reduced by the amount of that Lender's Proportionate Share of
that Drawing.
7.10 DETERMINATIONS CONCLUSIVE The Agent shall promptly notify the Borrower
of the determination of a rate of interest under this Clause 7 and
each such determination shall (save in the case of manifest error) be
final and conclusive.
8 INDEMNITIES
8.1 TRANSACTION EXPENSES The Borrower will, within fourteen (14) days of
the Agent's written demand, pay the Agent (for the account of the
Finance Parties) the amount of all reasonable out of pocket costs and
expenses (including legal fees
27
and Value Added Tax or any similar or replacement tax if applicable)
reasonably incurred by the Finance Parties or any of them in
connection with:
8.1.1 the negotiation, preparation, printing, execution and
registration of the Finance Documents (whether or not any Finance
Document is actually executed or registered and whether or not a
Drawing is advanced);
8.1.2 any amendment, addendum or supplement to any Finance Document
(whether or not completed); and
8.1.3 any other document which may at any time be required by a
Finance Party to give effect to any Finance Document or which a
Finance Party is entitled to call for or obtain under any Finance
Document.
8.2 FUNDING COSTS The Borrower shall indemnify each Finance Party, by
payment to the Agent (for the account of that Finance Party) on the
Agent's written demand, against all losses and costs incurred or
sustained by that Finance Party if, for any reason due to a default or
other action by the Borrower, a Drawing is not advanced to the
Borrower after the relevant Drawdown Notice has been given to the
Agent, or is advanced on a date other than that requested in the
Drawdown Notice.
8.3 BREAK COSTS The Borrower shall indemnify each Finance Party, by
payment to the Agent (for the account of that Finance Party) on the
Agent's written demand, against all documented costs, losses, premiums
or penalties incurred by that Finance Party as a result of its
receiving any prepayment of all or any part of a Drawing (whether
pursuant to Clause 6 or otherwise) on a day other than the last day of
an Interest Period for that Drawing, or any other payment under or in
relation to the Finance Documents on a day other than the due date for
payment of the sum in question, including (without limitation) any
losses or costs incurred in liquidating or re-employing deposits from
third parties acquired to effect or maintain all or any part of a
Drawing, and any liabilities, expenses or losses incurred by that
Finance Party in terminating or reversing, or otherwise in connection
with, any interest rate and/or currency swap, transaction or
arrangement entered into by that Finance Party with any member of the
Group to hedge any exposure arising under this Agreement, or in
terminating or reversing, or otherwise in connection with, any open
position arising under this Agreement.
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8.4 CURRENCY INDEMNITY In the event of a Finance Party receiving or
recovering any amount payable under a Finance Document in a currency
other than the Currency of Account, and if the amount received or
recovered is insufficient when converted into the Currency of Account
at the date of receipt to satisfy in full the amount due, the Borrower
shall, on the Agent's written demand, pay to the Agent for the account
of the relevant Finance Party such further amount in the Currency of
Account as is sufficient to satisfy in full the amount due and that
further amount shall be due to the Agent on behalf of the relevant
Finance Party as a separate debt under this Agreement.
8.5 INCREASED COSTS (SUBJECT TO CLAUSE 8.6) If, by reason of the
introduction of any law, or any change in any law, or any change in
the interpretation or administration of any law, or compliance with
any request or requirement from any central bank or any fiscal,
monetary or other authority occurring after the date of this
Agreement:
8.5.1 a Finance Party (or the holding company of a Finance Party)
shall be subject to any Tax with respect to payment of all or any
part of the Indebtedness (other than Tax on overall net income);
or
8.5.2 the basis of Taxation of payments to a Finance Party in respect
of all or any part of the Indebtedness shall be changed; or
8.5.3 any reserve requirements shall be imposed, modified or deemed
applicable against assets held by or deposits in or for the
account of or loans by any branch of a Finance Party; or
8.5.4 the manner in which a Finance Party allocates capital resources
to its obligations under this Agreement or any ratio (whether
cash, capital adequacy, liquidity or otherwise) which a Finance
Party is required or requested to maintain shall be affected; or
8.5.5 there is imposed on a Finance Party (or on the holding company
of a Finance Party) any other condition in relation to the
Indebtedness or the Finance Documents;
and the result of any of the above shall be to increase the cost to a
Finance Party (or to the holding company of a Finance Party) of that
Finance Party making or
29
maintaining its Commitment, or to cause a Finance Party to suffer (in
its opinion) a material reduction in the rate of return on its overall
capital below the level which it reasonably anticipated at the date of
this Agreement and which it would have been able to achieve but for
its entering into this Agreement and/or performing its obligations
under this Agreement, then, subject to Clause 8.6, the Finance Party
affected shall notify the Agent and the Borrower shall from time to
time pay to the Agent on demand for the account of that Finance Party
the amount which shall compensate that Finance Party (or the relevant
holding company) for such additional cost or reduced return. A
certificate signed by an authorised signatory of that Finance Party
setting out the amount of that payment and the basis of its
calculation shall be submitted to the Borrower and shall be conclusive
evidence of such amount save for manifest error or on any question of
law.
8.6 EXCEPTIONS TO INCREASED COSTS Clause 8.5 does not apply to the extent
any additional cost or reduced return referred to in that Clause is:
8.6.1 compensated for by a payment made under Clause 8.10; or
8.6.2 compensated for by a payment made under Clause 17.3; or
8.6.3 compensated for by the payment of the Mandatory Cost; or
8.6.4 attributable to the wilful breach by the relevant Finance Party
(or the holding company of that Finance Party) of any law or
regulation.
8.7 EVENTS OF DEFAULT The Borrower shall indemnify each Finance Party from
time to time, by payment to the Agent (for the account of that Finance
Party) on the Agent's written demand, against all losses and costs
incurred or sustained by that Finance Party as a consequence of any
Event of Default.
8.8 ENFORCEMENT COSTS The Borrower shall pay to the Agent (for the account
of each Finance Party) on the Agent's written demand the amount of all
costs and expenses (including legal fees) incurred by a Finance Party
in connection with the enforcement of, or the preservation of any
rights under, any Finance Document including (without limitation) any
losses, costs and expenses which that Finance Party may from time to
time sustain, incur or become liable for by reason of that Finance
Party being mortgagee of a Vessel and/or a lender to the Borrower, or
by reason of that Finance Party being deemed by any court or authority
to be an
30
operator or controller, or in any way concerned in the operation or
control, of a Vessel. No such indemnity will be given where any such
loss or cost has occurred due to gross negligence or wilful misconduct
on the part of that Finance Party; however, this shall not effect the
right of any other Finance Party to receive such indemnity.
8.9 OTHER COSTS The Borrower shall pay to the Agent (for the account of
each Finance Party) on the Agent's written demand the amount of all
sums which a Finance Party may pay or become actually or contingently
liable for on account of the Borrower in connection with a Vessel
(whether alone or jointly or jointly and severally with any other
person) including (without limitation) all sums which that Finance
Party may pay or guarantees which it may give in respect of the
Insurances, any expenses incurred by that Finance Party in connection
with the maintenance or repair of a Vessel or in discharging any lien,
bond or other claim relating in any way to a Vessel, and any sums
which that Finance Party may pay or guarantees which it may give to
procure the release of a Vessel from arrest or detention.
8.10 TAXES The Borrower shall pay all Taxes to which all or any part of the
Indebtedness or any Finance Document may be at any time subject (other
than Tax on a Finance Party's overall net income) and shall indemnify
the Finance Parties, by payment to the Agent (for the account of the
Finance Parties) on the Agent's written demand, against all
liabilities, costs, claims and expenses resulting from any omission to
pay or delay in paying any such Taxes.
9 FEES
9.1 COMMITMENT FEE The Borrower shall pay to the Agent (for the account of
the Lenders in proportion to their Commitments) a fee computed at the
rate of thirty two point five per cent (32.5%) of the Margin on the
undrawn and uncancelled amount of the Maximum Amount from time to time
from the date of this Agreement until the Commitment Termination Date.
The accrued commitment fee is payable on the last day of each
successive period of three months from the Execution Date and on the
Commitment Termination Date.
9.2 OTHER FEES The Borrower shall pay to the Agent the fees in the amount
and at the times agreed in a Fee Letter.
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10 SECURITY AND APPLICATION OF MONEYS
10.1 SECURITY DOCUMENTS As security for the payment of the Indebtedness,
the Borrower shall execute and deliver to the Security Agent or cause
to be executed and delivered to the Security Agent the following
documents in such forms and containing such terms and conditions as
the Security Agent shall require:
10.1.1 a first priority statutory mortgage over each of the Vessels
together with a collateral deed of covenants;
10.1.2 a first priority deed or deeds of assignment of the Insurances,
Earnings, Charter Rights (if applicable) and Requisition
Compensation of each of the Vessels, and of the benefit of any
relevant Charterer's Assignment; and
10.1.3 an on demand guarantee and indemnity from the Guarantor;
10.2 REMITTANCE OF EARNINGS Immediately upon the occurrence of an Event of
Default the Borrower shall procure that all Earnings are paid to such
account(s) as the Agent shall from time to time specify by notice in
writing to the Borrower.
10.3 GENERAL APPLICATION OF MONEYS Whilst an Event of Default is continuing
unremedied and unwaived the Borrower irrevocably authorises the Agent
and the Security Agent to apply all sums which either of them may
receive:
10.3.1 pursuant to a sale or other disposition of a Vessel or any
right, title or interest in the Vessel; or
10.3.2 by way of payment of any sum in respect of the Insurances,
Earnings, Charter Rights or Requisition Compensation; or
10.3.3 otherwise arising under or in connection with any Security
Document,
in accordance with Clause 3.4.3 or Clause 3.4.4 (if relevant) or
otherwise in or towards satisfaction, or by way of retention on
account, of the Indebtedness, as follows:-
(i) first in payment of all outstanding fees and expenses of the
Agent and the Security Agent;
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(ii) secondly in or towards payment of all outstanding interest
hereunder;
(iii) thirdly in or towards payment of all outstanding principal
hereunder;
(iv) fourthly in or towards payment of all other Indebtedness
hereunder;
(v) fifthly the balance, if any, shall be remitted to the Borrower or
whoever may be entitled thereto.
11 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Finance Parties at the
Execution Date and (by reference to the facts and circumstances then
pertaining) at the date of each Drawdown Notice, at each Drawdown Date and
at each Interest Payment Date as follows (except that the representation
and warranty contained at Clause 11.6 shall only be made on the First
Drawdown Date and that the representations and warranties contained at
Clause 11.2 and 11.21 shall only be made on the Execution Date):-
11.1 STATUS AND DUE AUTHORISATION Each of the Security Parties is a
corporation or limited partnership duly incorporated or formed under
the laws of its jurisdiction of incorporation, organisation or
formation (as the case may be) with power to enter into the Security
Documents and to exercise its rights and perform its obligations under
the Security Documents and all corporate and other action required to
authorise its execution of the Security Documents and its performance
of its obligations thereunder has been duly taken.
11.2 NO DEDUCTIONS OR WITHHOLDING Under the laws of the Security Parties'
respective jurisdictions of incorporation or formation in force at the
date hereof, none of the Security Parties will be required to make any
deduction or withholding from any payment it may make under any of the
Security Documents.
11.3 CLAIMS PARI PASSU Under the laws of the Security Parties' respective
jurisdictions of incorporation or formation in force at the date
hereof, the Indebtedness will, to the extent that it exceeds the
realised value of any security granted in respect of the Indebtedness,
rank at least pari passu with all the Security Parties' other
unsecured indebtedness save that which is preferred solely by any
bankruptcy, insolvency or other similar laws of general application.
33
11.4 NO IMMUNITY In any proceedings taken in any of the Security Parties'
respective jurisdictions of incorporation or formation in relation to
any of the Security Documents, none of the Security Parties will be
entitled to claim for itself or any of its assets immunity from suit,
execution, attachment or other legal process.
11.5 GOVERNING LAW AND JUDGMENTS In any proceedings taken in any of the
Security Parties' jurisdiction of incorporation or formation in
relation to any of the Security Documents in which there is an express
choice of the law of a particular country as the governing law
thereof, that choice of law and any judgment or (if applicable)
arbitral award obtained in that country will be recognised and
enforced.
11.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE As at the date hereof, all
acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable each of the Security Parties lawfully
to enter into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in the Security
Documents, (b) to ensure that the obligations expressed to be assumed
by each of the Security Parties in the Security Documents are legal,
valid and binding and (c) to make the Security Documents admissible in
evidence in the jurisdictions of incorporation or formation of each of
the Security Parties, have been done, fulfilled and performed.
11.7 NO FILING OR STAMP TAXES Under the laws of the Security Parties'
respective jurisdictions of incorporation or formation in force at the
date hereof, it is not necessary that any of the Security Documents be
filed, recorded or enrolled with any court or other authority in its
jurisdiction of incorporation or formation (other than the Registrar
of Companies for England and Wales or the relevant maritime registry,
to the extent applicable) or that any stamp, registration or similar
tax be paid on or in relation to any of the Security Documents.
11.8 BINDING OBLIGATIONS The obligations expressed to be assumed by each of
the Security Parties in the Security Documents are legal and valid
obligations, binding on each of them in accordance with the terms of
the Security Documents and no limit on any of their powers will be
exceeded as a result of the borrowings, granting of security or giving
of guarantees contemplated by the Security Documents or the
performance by any of them of any of their obligations thereunder.
34
11.9 NO WINDING-UP Neither the Borrower, the Guarantor nor any Material
Subsidiary have taken any corporate or limited partnership action nor
have any other steps been taken or legal proceedings been started or
(to the best of the Borrower's knowledge and belief) threatened
against the Borrower, the Guarantor or any Material Subsidiary for its
winding-up, dissolution, administration or reorganisation or for the
appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of it or of any or all of its assets or
revenues which might have a material adverse effect on the business or
financial condition of the Group taken as a whole.
11.10 SOLVENCY
11.10.1 Neither the Borrower, the Guarantor nor the Group taken as a
whole is unable, or admits or has admitted its inability, to pay
its debts or has suspended making payments in respect of any of
its debts.
11.10.2 Neither the Borrower, the Guarantor nor any Material
Subsidiary by reason of actual or anticipated financial
difficulties, has commenced, or intends to commence, negotiations
with one or more of its creditors with a view to rescheduling any
of its indebtedness.
11.10.3 The value of the assets of each of the Borrower, the Guarantor
and the Group taken as a whole is not less than the liabilities
of such entity or the Group taken as a whole (as the case may be)
(taking into account contingent and prospective liabilities).
11.10.4 No moratorium has been, or may, in the reasonably foreseeable
future be, declared in respect of any indebtedness of the
Borrower, the Guarantor or any Material Subsidiary.
11.11 NO MATERIAL DEFAULTS
11.11.1 Without prejudice to Clause 11.11.2, neither the Borrower, the
Guarantor nor any Material Subsidiary is in breach of or in
default under any agreement to which it is a party or which is
binding on it or any of its assets to an extent or in a manner
which might have a material adverse effect on the business or
financial condition of the Group taken as a whole.
35
11.11.2 No Event of Default is continuing or might reasonably be
expected to result from the advance of any Drawing.
11.12 NO MATERIAL PROCEEDINGS No action or administrative proceeding of or
before any court, arbitral body or agency which is not covered by
adequate insurance or which might have a material adverse effect on
the business or financial condition of the Group taken as a whole has
been started or is reasonably likely to be started.
11.13 BORROWER'S ACCOUNTS All financial statements relating to the Group
required to be delivered under Clause 12.1, were each prepared in
accordance with GAAP, give (in conjunction with the notes thereto) a
true and fair view of (in the case of annual financial statements) or
fairly represent (in the case of quarterly accounts) the financial
condition of the Group at the date as of which they were prepared and
the results of the Group's operations during the financial period then
ended.
11.14 NO MATERIAL ADVERSE CHANGE Since the publication of the last
financial statements relating to the Group delivered pursuant to
Clause 12.1, there has been no change that has a Material Adverse
Effect.
11.15 NO UNDISCLOSED LIABILITIES As at the date to which the Borrower's
Accounts were prepared neither the Borrower, the Guarantor nor any
Material Subsidiary had any material liabilities (contingent or
otherwise) which were not disclosed thereby (or by the notes thereto)
or reserved against therein nor any unrealised or anticipated losses
arising from commitments entered into by it which were not so
disclosed or reserved against therein.
11.16 NO OBLIGATION TO CREATE SECURITY The execution of the Security
Documents by the Security Parties and their exercise of their rights
and performance of their obligations thereunder will not result in the
existence of nor oblige the Borrower or the Guarantor to create any
Encumbrance over all or any of their present or future revenues or
assets, other than pursuant to the Security Documents.
11.17 NO BREACH The execution of the Security Documents by each of the
Security Parties and their exercise of their rights and performance of
their obligations under any of the Security Documents do not
constitute and will not result in any breach of any agreement or
treaty to which any of them is a party.
36
11.18 SECURITY Each of the Security Parties is the legal and beneficial
owner of all assets and other property which it purports to charge,
mortgage, pledge, assign or otherwise secure pursuant to each Security
Document and those Security Documents to which it is a party create
and give rise to valid and effective security having the ranking
expressed in those Security Documents.
11.19 NECESSARY AUTHORISATIONS The Necessary Authorisations required by
each Security Party, are in full force and effect, and each Security
Party is in compliance with the material provisions of each such
Necessary Authorisation relating to it and, to the best of its
knowledge, none of the Necessary Authorisations relating to it are the
subject of any pending or threatened proceedings or revocation.
11.20 MONEY LAUNDERING Any amount borrowed hereunder, and the performance
of the obligations of the Security Parties under the Security
Documents, will be for the account of members of the Group and will
not involve any breach by any of them 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.
11.21 DISCLOSURE OF MATERIAL FACTS The Borrower is not aware of any
material facts or circumstances which have not been disclosed to the
Agent and which might, if disclosed, have reasonably been expected to
adversely affect the decision of a person considering whether or not
to make loan facilities of the nature contemplated by this Agreement
available to the Borrower.
11.22 USE OF FACILITY The Facility will be used for the purposes specified
in the Recital.
11.23 REPRESENTATIONS LIMITED The representation and warranties of the
Borrower in this Clause 11 are subject to:
11.23.1 the principle that equitable remedies are remedies which may
be granted or refused at the discretion of the court;
11.23.2 the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes,
moratoria, administration and other laws generally affecting or
limiting the rights of creditors;
37
11.23.3 the time barring of claims under any applicable limitation
acts;
11.23.4 the possibility that a court may strike out provisions for a
contract as being invalid for reasons of oppression, undue
influence or similar; and
11.23.5 any other reservations or qualifications of law expressed in
any legal opinions obtained by the Agent in connection with the
Facility.
12 UNDERTAKINGS AND COVENANTS
The undertakings and covenants in this Clause 12 remain in force for the
duration of the Facility Period.
12.1 GENERAL UNDERTAKINGS
12.1.1 FINANCIAL STATEMENTS The Borrower shall supply to the Agent as
soon as the same become available, but in any event within one
hundred and fifty (150) days after the end of each of its
financial years, its audited consolidated financial statements
for that financial year, together with a Compliance Certificate,
signed by a duly authorised representative of the Borrower,
setting out computations as to compliance with Clause 12.2 as at
the date as at which those financial statements were drawn up.
12.1.2 REQUIREMENTS AS TO FINANCIAL STATEMENTS Each set of financial
statements delivered by the Borrower under Clause 12.1.1:
(a) shall be certified by an authorised signatory of the
Borrower as fairly representing its financial condition as
at the date as at which those financial statements were
drawn up; and
(b) shall be prepared in accordance with GAAP.
12.1.3 INTERIM FINANCIAL STATEMENTS The Borrower shall supply to the
Agent as soon as the same become available, but in any event
within ninety (90) days after the end of each quarter during each
of its financial years, its unaudited consolidated quarterly
financial statements for that quarter together with a Compliance
Certificate, signed by a duly authorised representative of the
Borrower, setting out computations as to compliance with Clause
12.2 as at the date such financial statements were drawn up.
38
12.1.4 MAINTENANCE OF LEGAL VALIDITY The Borrower shall obtain, comply
with the terms of and do all that is necessary to maintain in
full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its
jurisdiction of formation and all other applicable jurisdictions,
to enable it lawfully to enter into and perform its obligations
under the Security Documents and to ensure the legality,
validity, enforceability or admissibility in evidence of the
Security Documents in its jurisdiction of incorporation or
organisation and all other applicable jurisdictions.
12.1.5 NOTIFICATION OF DEFAULT The Borrower shall promptly, upon
becoming aware of the same, inform the Agent in writing of the
occurrence of any Event of Default and, upon receipt of a written
request to that effect from the Agent, confirm to the Agent that,
save as previously notified to the Agent or as notified in such
confirmation, no Event of Default has occurred.
12.1.6 CLAIMS PARI PASSU The Borrower shall ensure that at all times
the claims of the Finance Parties against it under the Security
Documents rank at least pari passu with the claims of all its
other unsecured creditors save those whose claims are preferred
by any bankruptcy, insolvency, liquidation, winding-up or other
similar laws of general application.
12.1.7 MANAGEMENT OF VESSELS The Borrower shall procure that the Owner
shall ensure that each of the Vessels is at all times technically
and commercially managed by a management company controlled by
Teekay Shipping Corporation or the Borrower or such other
management company as may be acceptable to the Agent acting on
the instructions of the Majority Lenders.
12.1.8 CLASSIFICATION The Borrower shall procure that the Owner shall
ensure that each of the Vessels maintains the highest
classification required for the purpose of the relevant trade of
such Vessel which shall be with a Pre-Approved Classification
Society, in each case, free from any overdue recommendations and
conditions affecting that Vessel's class.
39
12.1.9 CERTIFICATE OF FINANCIAL RESPONSIBILITY The Borrower shall
procure that the Owner shall obtain and maintain a certificate of
financial responsibility in relation to any Vessel which is to
call at the United States of America.
12.1.10 NEGATIVE PLEDGE The Borrower shall procure that the Owner does
not create, or permit to subsist, any Encumbrance (other than
pursuant to the Security Documents) over all or any part of the
Vessels or the Insurances other than a Permitted Encumbrance.
12.1.11 REGISTRATION The Borrower shall procure that for the duration
of the Facility Period the Owner shall not change or permit a
change to the flag of the Vessels other than to a Pre-Approved
Flag or under such other flag as may be approved by the Agent
acting on the instructions of the Majority Lenders, such approval
not to be unreasonably withheld or delayed.
12.1.12 ISM AND ISPS COMPLIANCE The Borrower shall procure that the
Owner shall ensure that the relevant Company complies in all
material respects with the ISM Code and the ISPS Code or any
replacements thereof and in particular (without prejudice to the
generality of the foregoing) shall procure that the Owner shall
ensure that the Company holds (i) a valid and current Document of
Compliance issued pursuant to the ISM Code, (ii) a valid and
current SMC issued in respect of each Vessel pursuant to the ISM
Code, and (iii) an ISSC in respect of each Vessel, and the
Borrower shall promptly, upon request, supply the Agent with
copies of the same.
12.1.13 NECESSARY AUTHORISATIONS Without prejudice to Clause 12.1.12
or any other specific provision of the Security Documents
relating to an Authorisation, the Borrower shall (i) obtain,
comply with and do all that is necessary to maintain in full
force and effect all Necessary Authorisations if a failure to do
the same may cause a Material Adverse Effect; and (ii) promptly
upon request, supply certified copies to the Agent of all
Necessary Authorisations.
40
12.1.14 COMPLIANCE WITH APPLICABLE LAWS The Borrower shall comply with
all applicable laws to which it may be subject if a failure to do
the same may have a Material Adverse Effect.
12.1.15 LOANS AND GUARANTEES The Borrower shall be permitted to make
loans and grant credit upon such terms as it may determine to any
other member of the Group or to any of the Borrower's
shareholders or unitholders and may otherwise give any guarantee
or indemnity to procure financing for other members of the Group,
but shall not otherwise make any loans or grant any credit (save
in the ordinary course of business) or give any guarantee or
indemnity (except pursuant to the Security Documents); Provided
that the Borrower shall not make any such loans following the
occurrence of an Event of Default which is continuing unremedied
or unwaived.
12.1.16 FURTHER ASSURANCE The Borrower shall at its own expense,
promptly take all such action as the Agent may reasonably require
for the purpose of perfecting or protecting any Finance Party's
rights with respect to the security created or evidenced (or
intended to be created or evidenced) by the Security Documents.
12.1.17 OTHER INFORMATION The Borrower will promptly supply to the
Agent such information and explanations as the Majority Lenders
may from time to time reasonably require in connection with the
operation of the Vessels and any reasonable financial information
in connection with the Borrower, and will procure that the Agent
be given the like information and explanations relating to all
other Security Parties.
12.1.18 INSPECTION OF RECORDS The Borrower will permit the inspection
of its financial records and accounts on reasonable notice from
time to time during business hours by the Agent or its nominee.
12.1.19 VALUATIONS The Borrower will deliver to the Agent a Valuation
of each of the Vessels (i) on the due date for delivery of the
annual Borrower's Accounts pursuant to Clause 12.1 (ii) on a sale
or Total Loss of any Vessel to determine the Relevant Reduction
Amount for the purposes of clauses 3.4.3 and 3.4.4 respectively
and (iii) following the occurrence of
41
an Event of Default which is continuing unremedied and unwaived
on such other occasions as the Agent may request.
12.1.20 INSURANCE The Borrower shall procure that the Owner shall
ensure at its own expense throughout the Facility Period that the
Vessels are insured and operated in accordance with the
provisions set out in the relevant Security Documents.
12.1.21 CHANGE OF CONTROL The Borrower shall procure that throughout
the Facility Period:
(a) Teekay Shipping Corporation owns a minimum of fifty one
percent (51%) of the voting rights in Teekay Offshore GP
L.L.C, the general partner in the MLP;
(b) Teekay Shipping Corporation or the MLP owns a minimum of
fifty one percent (51%) of the voting rights in Teekay
Offshore Operating GP L.L.C., the general partner in the
Borrower;
(c) there is no change in the legal or beneficial ownership of
the Guarantor from that advised to the Agent at the date of
this Agreement without the Agent's prior written consent
provided that the Agent's consent shall not be required if
the change of Guarantor shareholding arises from a corporate
reorganisation of the Group and the legal and beneficial
ownership of the Guarantor remains wholly owned within the
Group following such re-organisation.
12.1.22 "KNOW YOUR CUSTOMER" CHECKS If:
(a) the introduction of or any change in (or in the
interpretation, administration or application of) any law or
regulation made after the date of this Agreement;
(b) any change in the status of the Borrower after the date of
this Agreement; or
42
(c) a proposed assignment or transfer by a Lender of any of its
rights and obligations under this Agreement to a party that
is not a Lender prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of (c) above,
any prospective new Lender) to comply with "know your customer"
or similar identification procedures in circumstances where the
necessary information is not already available to it, the
Borrower shall promptly upon the request of the Agent or any
Lender supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for
itself or on behalf of any Lender) or any Lender for itself (or,
in the case of (c) above, on behalf of any prospective new
Lender) in order for the Agent or that Lender (or, in the case of
(c) above, any prospective new Lender) to carry out and be
satisfied it has complied with all necessary "know your customer"
or other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance
Documents.
12.1.23 INTERCOMPANY BORROWINGS The Borrower will only borrow from
other members of the Group on a subordinated and unsecured basis.
12.2 FINANCIAL COVENANTS
Throughout the Facility Period the Group shall:-
12.2.1 maintain a Free Liquidity together with undrawn committed
revolving credit lines available to the Group (including under
this Agreement but excluding undrawn committed revolving credit
lines with less than six (6) months to maturity) of not less than
seventy five million Dollars ($75,000,000); and
12.2.2 ensure that the aggregate of the Free Liquidity and undrawn
committed revolving credit lines available to be drawn by members
of the Group (including under this Agreement, but excluding
undrawn committed revolving credit lines with less than six (6)
months to maturity) will not be less than five per cent (5%) of
the Total Debt of the Group.
43
PROVIDED THAT following any change in the applicable accounting
policies for the Borrower from GAAP the Agent (acting on the
instructions of the Majority Lenders and in consultation with the
Borrower) may require an amendment to this Clause 12.2 as the
Agent deems logical and necessary having regard to the nature of
such changes in policy and the intended substance of this Clause
12.2.
13 EVENTS OF DEFAULT
13.1 EVENTS OF DEFAULT Each of the events or circumstances set out in this
Clause 13.1 is an Event of Default.
13.1.1 BORROWER'S FAILURE TO PAY UNDER THIS AGREEMENT The Borrower
fails to pay any amount of principal due from it under this
Agreement at the time, in the currency and otherwise in the
manner specified herein provided that, if the Borrower can
demonstrate to the reasonable satisfaction of the Agent that all
necessary instructions were given to effect such payment and the
non-receipt thereof is attributable solely to an error in the
banking system, such payment shall instead be deemed to be due,
solely for the purposes of this paragraph, within three (3)
Business Days of the date on which it actually fell due under
this Agreement (if a payment of principal), five (5) Business
Days (if a payment of interest) or ten (10) Business Days (if a
sum payable on demand); or
13.1.2 MISREPRESENTATION Any representation or statement made by any
Security Party in any Security Document to which it is a party or
in any notice or other document, certificate or statement
delivered by it pursuant thereto or in connection therewith is or
proves to have been incorrect or misleading in any material
respect, where the circumstances causing the same give rise to a
Material Adverse Effect; or
13.1.3 SPECIFIC COVENANTS A Security Party fails duly to perform or
comply with any of the obligations expressed to be assumed by or
procured by the Borrower under Clauses 12.1.4, 12.1.6, 12.1.10 or
12.1.21; or
44
13.1.4 FINANCIAL COVENANTS The Borrower is in breach of the Borrower's
financial covenants set out in Clause 12.2 at any time; or
13.1.5 OTHER OBLIGATIONS A Security Party fails duly to perform or
comply with any of the obligations expressed to be assumed by it
in any Security Document (other than those referred to in Clause
13.1.3 or Clause 13.1.4) and such failure is not remedied within
30 days after the Agent has given notice thereof to the Borrower;
or
13.1.6 CROSS DEFAULT Any indebtedness of any Security Party or any
Material Subsidiary is not paid when due (or within any
applicable grace period) or any indebtedness of any Security
Party or any Material Subsidiary is declared to be or otherwise
becomes due and payable prior to its specified maturity where (in
either case) the aggregate of all such unpaid or accelerated
indebtedness (i) of the Borrower is equal to or greater than
fifty million Dollars ($50,000,000) or its equivalent in any
other currency; or (ii) of the Guarantor, or any Material
Subsidiary is equal to or greater than twenty five million
Dollars ($25,000,000) or its equivalent in any other currency; or
13.1.7 INSOLVENCY AND RESCHEDULING A Security Party or a Material
Subsidiary is unable to pay its debts as they fall due, commences
negotiations with any one or more of its creditors with a view to
the general readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of its creditors or a
composition with its creditors; or
13.1.8 WINDING-UP A Security Party or a Material Subsidiary takes any
corporate action or other steps are taken or legal proceedings
are started for its winding-up, dissolution, administration or
re-organisation or for the appointment of a liquidator, receiver,
administrator, administrative receiver, conservator, custodian,
trustee or similar officer of it or of any or all of its revenues
or assets or any moratorium is declared or sought in respect of
any of its indebtedness; or
45
13.1.9 EXECUTION OR DISTRESS
(a) Any Security Party or a Material Subsidiary fails to comply
with or pay any sum due from it (within 30 days of such
amount falling due) under any final judgment or any final
order made or given by any court or other official body of a
competent jurisdiction in an aggregate (i) in respect of the
Borrower equal to or greater than fifty million Dollars
($50,000,000) or its equivalent in any other currency; or
(ii) in respect of the Guarantor or a Material Subsidiary
equal to or greater than twenty five million Dollars
($25,000,000) or its equivalent in any other currency, being
a judgment or order against which there is no right of
appeal or if a right of appeal exists, where the time limit
for making such appeal has expired.
(b) Any execution or distress is levied against, or an
encumbrancer takes possession of, the whole or any part of,
the property, undertaking or assets of a Security Party or a
Material Subsidiary in an aggregate amount (i) in respect of
the Borrower equal to or greater than fifty million Dollars
($50,000,000) or its equivalent in any other currency; or
(ii) in respect of the Guarantor or a Material Subsidiary
equal to or greater than twenty five million Dollars
($25,000,000) or its equivalent in any other currency, other
than any execution or distress which is being contested in
good faith and which is either discharged within 30 days or
in respect of which adequate security has been provided
within 30 days to the relevant court or other authority to
enable the relevant execution or distress to be lifted or
released.
(c) Notwithstanding the foregoing paragraphs of this Clause
13.1.9, any levy of any distress on or any arrest,
condemnation, confiscation, requisition for title or use,
compulsory acquisition, seizure, detention or forfeiture of
a Vessel (or any part thereof) or any exercise or purported
exercise of any lien or claim on or against a Vessel where
the release of or discharge the lien or
46
claim on or against such Vessel has not been procured within
30 days; or
13.1.10 SIMILAR EVENT Any event occurs which, under the laws of any
jurisdiction, has a similar or analogous effect to any of those
events mentioned in Clauses 13.1.7, 13.1.8 and 13.1.9; or
13.1.11 INSURANCES Insurance is not maintained in respect of any
Vessel in accordance with the terms of the relevant Security
Document in respect of that Vessel; or
13.1.12 CLASS A Vessel has its classification withdrawn by the
relevant classification society PROVIDED THAT if such withdrawal
is (in the opinion of the Agent in its absolute discretion)
capable of remedy such Event of Default shall only occur if the
Vessel's classification is not reinstated to the satisfaction of
the Agent within twenty one (21) days; or
13.1.13 ENVIRONMENTAL MATTERS
(a) Any Environmental Claim is pending or made against the Owner
or any of the Owner's Environmental Affiliates or in
connection with a Vessel, where such Environmental Claim has
a Material Adverse Effect.
(b) Any actual Environmental Incident occurs in connection with
a Vessel, where such Environmental Incident has a Material
Adverse Effect; or
13.1.14 REPUDIATION Any Security Party repudiates any Security
Document to which it is a party or does or causes to be done any
act or thing evidencing an intention to repudiate any such
Security Document; or
13.1.15 VALIDITY AND ADMISSIBILITY At any time any act, condition or
thing required to be done, fulfilled or performed in order:
(a) to enable any Security Party lawfully to enter into,
exercise its rights under and perform the respective
obligations expressed to be assumed by it in the Security
Documents;
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(b) to ensure that the obligations expressed to be assumed by
each of the Security Parties in the Security Documents are
legal, valid and binding; or
(c) to make the Security Documents admissible in evidence in any
applicable jurisdiction
is not done, fulfilled or performed within 30 days after
notification from the Agent to the relevant Security Party
requiring the same to be done, fulfilled or performed; or
13.1.16 ILLEGALITY At any time it is or becomes unlawful for any
Security Party to perform or comply with any or all of its
obligations under the Security Documents to which it is a party
or any of the obligations of the Borrower hereunder are not or
cease to be legal, valid and binding and such illegality is not
remedied or mitigated to the satisfaction of the Agent within
thirty (30) days after it has given notice thereof to the
relevant Security Party; or
13.1.17 MATERIAL ADVERSE CHANGE At any time there shall occur a change
in the business or operations of a Security Party or a change in
the financial condition of any Security Party which, in the
reasonable opinion of the Majority Lenders, materially impairs
such Security Party's ability to discharge its obligations under
the Security Documents in the manner provided therein and such
change, if capable of remedy, is not so remedied within 15 days
of the delivery of a notice confirming such change by the Agent
to the relevant Security Party; or
13.1.18 QUALIFICATIONS OF FINANCIAL STATEMENTS The auditors of the
Group qualify their report on any audited consolidated financial
statements of the Group in any regard which, in the reasonable
opinion of the Agent, has a Material Adverse Effect; or
13.1.19 CONDITIONS SUBSEQUENT if any of the conditions set out in
Clause 3.6 is not satisfied within thirty (30) days or such other
time period specified by the Agent in its discretion; or
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13.1.20 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any Necessary
Authorisation which is now or which at any time during the
Facility Period becomes necessary to enable any of the Security
Parties to comply with any of their obligations in or pursuant to
any of the Security Documents is revoked, withdrawn or withheld,
or modified in a manner which the Agent reasonably considers is,
or may be, prejudicial to the interests of a Finance Party in a
material manner, or if such Necessary Authorisation ceases to
remain in full force and effect; or
13.1.21 CURTAILMENT OF BUSINESS if the business of any of the Security
Parties is wholly or materially curtailed by any intervention by
or under authority of any government, or if all or a substantial
part of the undertaking, property or assets of any of the
Security Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any government or
any Security Party disposes or threatens to dispose of a
substantial part of its business or assets; or
13.1.22 REDUCTION OF CAPITAL if the Borrower reduces its committed or
subscribed capital; or
13.1.23 CHALLENGE TO REGISTRATION if the registration of any Vessel or
any Mortgage becomes void or voidable or liable to cancellation
or termination; or
13.1.24 WAR if the country of registration of any Vessel becomes
involved in war (whether or not declared) or civil war or is
occupied by any other power and the Agent reasonably considers
that, as a result, the security conferred by the Security
Documents is materially prejudiced; or
13.1.25 NOTICE OF TERMINATION if the Guarantor gives notice to the
Agent to determine its obligations under the Guarantee.
13.2 ACCELERATION If an Event of Default is continuing unremedied or
unwaived the Agent may (with the consent of the Majority Lenders) and
shall (at the request of the Majority Lenders) by notice to the
Borrower cancel any part of the Maximum Amount not then advanced and:
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13.2.1 declare that the Loan, together with accrued interest, and all
other amounts accrued or outstanding under the Finance Documents
are immediately due and payable, whereupon they shall become
immediately due and payable; and/or
13.2.2 declare that the Loan is payable on demand, whereupon it shall
immediately become payable on demand by the Agent; and/or
13.2.3 declare the Commitments terminated and the Maximum Amount
reduced to zero.
14 ASSIGNMENT AND SUB-PARTICIPATION
14.1 LENDERS' RIGHTS A Lender may assign any of its rights under this
Agreement or transfer by novation any of its rights and obligations
under this Agreement to any other branch or Affiliate of that Lender
or (subject to the prior written consent of the Borrower, such consent
not to be unreasonably withheld but not to be required at any time
after an Event of Default which is continuing unremedied and unwaived)
to any other bank or financial institution, and may grant
sub-participations in all or any part of its Commitment.
14.2 BORROWER'S CO-OPERATION The Borrower will co-operate fully with a
Lender in connection with any assignment, transfer or
sub-participation by that Lender; will execute and procure the
execution of such documents as that Lender may require in that
connection; and irrevocably authorises any Finance Party to disclose
to any proposed assignee, transferee or sub-participant (whether
before or after any assignment, transfer or sub-participation and
whether or not any assignment, transfer or sub-participation shall
take place) all information relating to the Security Parties, the
Loan, the Relevant Documents and the Vessels which any Finance Party
may in its discretion consider necessary or desirable (subject to any
duties of confidentiality applicable to the Lenders generally).
Additionally, (but subject to the same duties of confidentiality), any
Lender may disclose the size and term of the Facility and the names of
each Security Party to any investor or potential investor in a
securitisation (or similar transaction of broadly equivalent economic
effect) of that Lender's rights and obligations under the Finance
Documents.
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14.3 RIGHTS OF ASSIGNEE Any assignee of a Lender shall (unless limited by
the express terms of the assignment) take the full benefit of every
provision of the Finance Documents benefitting that Lender PROVIDED
THAT an assignment will only be effective on notification by the Agent
to that Lender and the assignee that the Agent is satisfied it has
complied with all necessary "Know your customer" or other similar
checks under all applicable laws and regulations in relation to the
assignment to the assignee.
14.4 TRANSFER CERTIFICATES If a Lender wishes to transfer any of its rights
and obligations under or pursuant to this Agreement, it may do so by
delivering to the Agent a duly completed Transfer Certificate, in
which event on the Transfer Date:
14.4.1 to the extent that that Lender seeks to transfer its rights and
obligations, the Borrower (on the one hand) and that Lender (on
the other) shall be released from all further obligations towards
the other;
14.4.2 the Borrower (on the one hand) and the transferee (on the
other) shall assume obligations towards the other identical to
those released pursuant to Clause 14.4.1; and
14.4.3 the Agent, each of the Lenders and the transferee shall have
the same rights and obligations between themselves as they would
have had if the transferee had been an original party to this
Agreement as a Lender
PROVIDED THAT the Agent shall only be obliged to execute a Transfer
Certificate once:
(a) it is satisfied it has complied with all necessary "know your
customer" or other similar checks under all applicable laws and
regulations in relation to the transfer to the transferee; and
(b) the transferee has paid to the Agent for its own account a
transfer fee of three thousand Dollars.
The Agent shall, as soon as reasonably practicable after it has
executed a Transfer Certificate, send to the Borrower a copy of that
Transfer Certificate.
14.5 FINANCE DOCUMENTS Unless otherwise expressly provided in any Finance
Document or otherwise expressly agreed between a Lender and any
proposed
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transferee and notified by that Lender to the Agent on or before the
relevant Transfer Date, there shall automatically be assigned to the
transferee with any transfer of a Lender's rights and obligations
under or pursuant to this Agreement the rights of that Lender under or
pursuant to the Finance Documents (other than this Agreement) which
relate to the portion of that Lender's rights and obligations
transferred by the relevant Transfer Certificate.
14.6 NO ASSIGNMENT OR TRANSFER BY THE BORROWER The Borrower may not assign
any of its rights or transfer any of its rights or obligations under
the Finance Documents.
14.7 TRANSFER OF THE LOAN AGREEMENT BY KFW. Notwithstanding the provisions
of Clause 14.1 KfW may transfer all its rights and obligations under
this Agreement to a KfW Subsidiary with effect from 1 January 2008 or
any later date. By signing this Agreement the Borrower consents to
such a transfer. KfW or the KfW Subsidiary will inform the Borrower of
the date on which the transfer of KfW's rights and obligations to the
KfW Subsidiary takes effect. In this connection the following will
apply:
14.7.1 DEDUCTIONS AND INCREASED COSTS. If, by reason of circumstances
already existing at the transfer date, the Borrower would be
obliged to make a payment to the KfW Subsidiary under Clauses
8.5, 17.2 or 17.3, it need pay the KfW Subsidiary only such an
amount as it would have been obliged to pay KfW if the transfer
had not occurred.
14.7.2 COSTS. KfW will pay all costs incurred as a result of or in
connection with such transfer.
For the purposes of this Clause KfW Subsidiary means a company which
within the meaning of section 15 ff. German Stock Corporation Act
(Aktiengesetz) is directly or indirectly (i) majority owned (im
Mehrheitsbesitz) by KfW or (ii) controlled (abhangig) by KfW.
14.8 DISCLOSURE OF INFORMATION. In connection with any transfer under
Clause 14.7 KfW may disclose confidential information to the KfW
Subsidiary or its agents or its legal advisors.
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14.9 MITIGATION If a transfer is to take place under Clause 14.7 then,
without in any way limiting the rights of KfW under Clauses 8.5, 17.2
or 17.3, KfW shall take reasonable steps to mitigate any circumstances
which arise and which would result in any amount becoming payable
under or pursuant to Clauses 8.5, 17.2 or 17.3 and it shall co-operate
in completing any procedural formalities necessary for the Borrower to
obtain authorisation to make any payment under Clauses 8.5, 17.2 or
17.3 without a deduction or withholding.
15 THE AGENT, THE SECURITY AGENT AND THE LENDERS
15.1 APPOINTMENT
15.1.1 Each Lender appoints the Agent to act as its agent under and in
connection with the Finance Documents and each Lender and the
Agent appoints the Security Agent to act as its security agent
for the purpose of the Security Documents.
15.1.2 Each Lender authorises the Agent and each Lender and the Agent
authorises the Security Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent or
the Security Agent (as the case may be) under or in connection
with the Finance Documents together with any other incidental
rights, powers, authorities and discretions.
15.1.3 Except where the context otherwise requires, references in this
Clause 15 to the "AGENT" shall mean the Agent and the Security
Agent individually and collectively.
15.2 AUTHORITY Each Lender irrevocably authorises the Security Agent (in
the case of Clause 15.2.1) and the Agent (in the case of Clauses
15.2.2, 15.2.3 and 15.2.4) (in each case subject to Clauses 15.4 and
15.18):
15.2.1 to execute any Finance Document (other than this Agreement) on
its behalf;
15.2.2 to collect, receive, release or pay any money on its behalf;
15.2.3 acting on the instructions from time to time of the Majority
Lenders (save where the terms of any Security Document expressly
provide otherwise)
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to give or withhold any waivers, consents or approvals under or
pursuant to any Finance Document; and
15.2.4 acting on the instructions from time to time of the Majority
Lenders (save where the terms of any Security Document expressly
provide otherwise) to exercise, or refrain from exercising, any
rights, powers, authorities or discretions under or pursuant to
any Finance Document.
The Agent shall have no duties or responsibilities as agent or as
security agent other than those expressly conferred on it by the
Finance Documents and shall not be obliged to act on any instructions
from the Lenders or the Majority Lenders if to do so would, in the
opinion of the Agent, be contrary to any provision of the Finance
Documents or to any law, or would expose the Agent to any actual or
potential liability to any third party.
15.3 TRUST The Security Agent agrees and declares, and each of the other
Finance Parties acknowledges, that, subject to the terms and
conditions of this Clause 15.3, the Security Agent holds the Trust
Property on trust for the Finance Parties absolutely. Each of the
other Finance Parties agrees that the obligations, rights and benefits
vested in the Security Agent shall be performed and exercised in
accordance with this Clause 15.3. The Security Agent shall have the
benefit of all of the provisions of this Agreement benefiting it in
its capacity as security agent for the Finance Parties, and all the
powers and discretions conferred on trustees by the Trustee ▇▇▇ ▇▇▇▇
(to the extent not inconsistent with this Agreement). In addition:
15.3.1 the Security Agent and any attorney, agent or delegate of the
Security Agent may indemnify itself or himself out of the Trust
Property against all liabilities, costs, fees, damages, charges,
losses and expenses sustained or incurred by it or him in
relation to the taking or holding of any of the Trust Property or
in connection with the exercise or purported exercise of the
rights, trusts, powers and discretions vested in the Security
Agent or any other such person by or pursuant to the Security
Documents or in respect of anything else done or omitted to be
done in any way relating to the Security Documents other than as
a result of its gross negligence or wilful misconduct;
54
15.3.2 the other Finance Parties acknowledge that the Security Agent
shall be under no obligation to insure any property nor to
require any other person to insure any property and shall not be
responsible for any loss which may be suffered by any person as a
result of the lack or insufficiency of any insurance; and
15.3.3 the Finance Parties agree that the perpetuity period applicable
to the trusts declared by this Agreement shall be the period of
eighty years from the date of this Agreement.
15.4 LIMITATIONS ON AUTHORITY Except with the prior written consent of all
the Lenders, the Agent shall not be entitled to:
15.4.1 release or vary any security given for the Borrower's
obligations under this Agreement; nor
15.4.2 waive the payment of any sum of money payable by any Security
Party under the Finance Documents; nor
15.4.3 change the meaning of the expressions "MAJORITY LENDERS",
"MARGIN", "COMMITMENT COMMISSION" or "DEFAULT RATE"; nor
15.4.4 exercise, or refrain from exercising, any right, power,
authority or discretion, or give or withhold any consent, the
exercise or giving of which is, by the terms of this Agreement,
expressly reserved to the Lenders; nor
15.4.5 extend the due date for the payment of any sum of money payable
by any Security Party under any Finance Document; nor
15.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the obligations of
a Lender under any Finance Document; nor
15.4.7 agree to change the currency in which any sum is payable under
any Finance Document (other than in accordance with the terms of
the relevant Finance Document); nor
15.4.8 agree to amend this Clause 15.4.
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15.5 LIABILITY Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Lenders for anything done
or omitted to be done by the Agent under or in connection with any of
the Relevant Documents unless as a result of the Agent's gross
negligence or wilful misconduct.
15.6 ACKNOWLEDGEMENT Each Lender acknowledges that:
15.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents or by
any other person acting or purporting to act on behalf of the
Agent to induce it to enter into any Finance Document;
15.6.2 it has made and will continue to make without reliance on the
Agent, and based on such documents and other evidence as it
considers appropriate, its own independent investigation of the
financial condition and affairs of the Security Parties in
connection with the making and continuation of the Loan;
15.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties; and
15.6.4 the Agent shall not have any duty or responsibility at any time
to provide it with any credit or other information relating to
any Security Party unless that information is received by the
Agent pursuant to the express terms of a Finance Document.
Each Lender agrees that it will not assert nor seek to assert against
any director, officer, employee or agent of the Agent or against any
other person acting or purporting to act on behalf of the Agent any
claim which it might have against them in respect of any of the
matters referred to in this Clause 15.6.
15.7 LIMITATIONS ON RESPONSIBILITY The Agent shall have no responsibility
to any Security Party or to any Lender on account of:
15.7.1 the failure of a Lender or of any Security Party to perform any
of its obligations under a Finance Document; nor
15.7.2 the financial condition of any Security Party; nor
56
15.7.3 the completeness or accuracy of any statements, representations
or warranties made in or pursuant to any Finance Document, or in
or pursuant to any document delivered pursuant to or in
connection with any Finance Document; nor
15.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any Finance Document or of any document executed
or delivered pursuant to or in connection with any Finance
Document.
15.8 THE AGENT'S RIGHTS The Agent may:
15.8.1 assume that all representations or warranties made or deemed
repeated by any Security Party in or pursuant to any Finance
Document are true and complete, unless, in its capacity as the
Agent, it has acquired actual knowledge to the contrary;
15.8.2 assume that no Default has occurred unless, in its capacity as
the Agent, it has acquired actual knowledge to the contrary;
15.8.3 rely on any document or notice believed by it to be genuine;
15.8.4 rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected
or approved by it;
15.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any Security Party on a
certificate signed by or on behalf of that Security Party; and
15.8.6 refrain from exercising any right, power, discretion or remedy
unless and until instructed to exercise that right, power,
discretion or remedy and as to the manner of its exercise by the
Lenders (or, where applicable, by the Majority Lenders) and
unless and until the Agent has received from the Lenders any
payment which the Agent may require on account of, or any
security which the Agent may require for, any costs, claims,
expenses (including legal and other professional fees) and
liabilities which it considers it may incur or sustain in
complying with those instructions.
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15.9 THE AGENT'S DUTIES The Agent shall:
15.9.1 if requested in writing to do so by a Lender, make enquiry and
advise the Lenders as to the performance or observance of any of
the provisions of any Finance Document by any Security Party or
as to the existence of an Event of Default; and
15.9.2 inform the Lenders promptly of any Event of Default of which
the Agent has actual knowledge.
15.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation or
warranty made or deemed repeated by any Security Party or actual
knowledge of the occurrence of any Default unless a Lender or a
Security Party shall have given written notice thereof to the Agent in
its capacity as the Agent. Any information acquired by the Agent other
than specifically in its capacity as the Agent shall not be deemed to
be information acquired by the Agent in its capacity as the Agent.
15.11 OTHER BUSINESS The Agent may, without any liability to account to the
Lenders, generally engage in any kind of banking or trust business
with a Security Party or with a Security Party's subsidiaries or
associated companies or with a Lender as if it were not the Agent.
15.12 INDEMNITY The Lenders shall, promptly on the Agent's request,
reimburse the Agent in their respective Proportionate Shares, for, and
keep the Agent fully indemnified in respect of all liabilities,
damages, costs and claims sustained or incurred by the Agent in
connection with the Finance Documents, or the performance of its
duties and obligations, or the exercise of its rights, powers,
discretions or remedies under or pursuant to any Finance Document, to
the extent not paid by the Security Parties and not arising solely
from the Agent's gross negligence or wilful misconduct.
15.13 EMPLOYMENT OF AGENTS In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Finance Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Finance Documents (including the receipt of money and
documents and the payment of money) and to act or
58
refrain from taking action in reliance on the opinion of, or advice or
information obtained from, any lawyer, banker, broker, accountant,
valuer or any other person believed by the Agent in good faith to be
competent to give such opinion, advice or information.
15.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the order of
each Lender that Lender's Proportionate Share of every sum of money
received by the Agent pursuant to the Finance Documents (with the
exception of any amounts payable pursuant to Clause 9 and/or any Fee
Letter and any amounts which, by the terms of the Finance Documents,
are paid to the Agent for the account of the Agent alone or
specifically for the account of one or more Lenders) and until so paid
such amount shall be held by the Agent on trust absolutely for that
Lender.
15.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to a
Lender until it has itself received payment of that sum. If, however,
the Agent does pay any sum to a Lender on account of any amount
prospectively due to that Lender pursuant to Clause 15.14 before it
has itself received payment of that amount, and the Agent does not in
fact receive payment within five (5) Business Days after the date on
which that payment was required to be made by the terms of the Finance
Documents, that Lender will, on demand by the Agent, refund to the
Agent an amount equal to the amount received by it, together with an
amount sufficient to reimburse the Agent for any amount which the
Agent may certify that it has been required to pay by way of interest
on money borrowed to fund the amount in question during the period
beginning on the date on which that amount was required to be paid by
the terms of the Finance Documents and ending on the date on which the
Agent receives reimbursement.
15.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the
Lenders and the Agent, if at any time a Lender receives or recovers by
way of set-off, the exercise of any lien or otherwise from any
Security Party, an amount greater than that Lender's Proportionate
Share of any sum due from that Security Party to the Lenders under the
Finance Documents (the amount of the excess being referred to in this
Clause 15.16 and in Clause 15.17 as the "EXCESS AMOUNT") then:
15.16.1that Lender shall promptly notify the Agent (which shall
promptly notify each other Lender);
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15.16.2 that Lender shall pay to the Agent an amount equal to the
Excess Amount within ten (10) days of its receipt or recovery of
the Excess Amount; and
15.16.3 the Agent shall treat that payment as if it were a payment by
the Security Party in question on account of the sum due from
that Security Party to the Lenders and shall account to the
Lenders in respect of the Excess Amount in accordance with the
provisions of this Clause 15.16.
However, if a Lender has commenced any legal proceedings to recover
sums owing to it under the Finance Documents and, as a result of, or
in connection with, those proceedings has received an Excess Amount,
the Agent shall not distribute any of that Excess Amount to any other
Lender which had been notified of the proceedings and had the legal
right to, but did not, join those proceedings or commence and
diligently prosecute separate proceedings to enforce its rights in the
same or another court.
15.17 RESCISSION OF EXCESS AMOUNT If all or any part of any Excess Amount
is rescinded or must otherwise be restored to any Security Party or to
any other third party, the Lenders which have received any part of
that Excess Amount by way of distribution from the Agent pursuant to
Clause 15.16 shall repay to the Agent for the account of the Lender
which originally received or recovered the Excess Amount, the amount
which shall be necessary to ensure that the Lenders share rateably in
accordance with their Proportionate Shares in the amount of the
receipt or payment retained, together with interest on that amount at
a rate equivalent to that (if any) paid by the Lender receiving or
recovering the Excess Amount to the person to whom that Lender is
liable to make payment in respect of such amount, and Clause 15.16.3
shall apply only to the retained amount.
15.18 INSTRUCTIONS Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the Lenders
or of the Majority Lenders each of the Lenders shall provide the Agent
with instructions within three (3) Business Days of the Agent's
request (which request may be made orally or in writing). If a Lender
does not provide the Agent with instructions within that period, that
Lender shall be bound by the decision of the Agent. Nothing in this
Clause 15.18 shall limit the right of the Agent to take, or refrain
from taking, any action without obtaining the instructions of the
Lenders or the Majority Lenders if the Agent in its discretion
considers it necessary or appropriate to take, or refrain
60
from taking, such action in order to preserve the rights of the
Lenders under or in connection with the Finance Documents. In that
event, the Agent will notify the Lenders of the action taken by it as
soon as reasonably practicable, and the Lenders agree to ratify any
action taken by the Agent pursuant to this Clause 15.18.
15.19 PAYMENTS All amounts payable to a Lender under this Clause 15 shall
be paid to such account at such bank as that Lender may from time to
time direct in writing to the Agent.
15.20 "KNOW YOUR CUSTOMER" CHECKS Each Lender shall promptly upon the
request of the Agent supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by the
Agent (for itself) in order for the Agent to carry out and be
satisfied it has complied with all necessary "know your customer" or
other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance Documents.
15.21 RESIGNATION Subject to a successor being appointed in accordance with
this Clause 15.21, the Agent may resign as agent and/or the Security
Agent may resign as security agent at any time without assigning any
reason by giving to the Borrower and the Lenders notice of its
intention to do so, in which event the following shall apply:
15.21.1 with the consent of the Borrower not to be unreasonably
withheld (but such consent not to be required at any time after
an Event of Default which is continuing unremedied and unwaived)
the Lenders may within thirty (30) days after the date of the
notice from the Agent or the Security Agent (as the case may be)
appoint a successor to act as agent and/or security agent or, if
they fail to do so with the consent of the Borrower, not to be
unreasonably withheld (but such consent not to be required at any
time after an Event of Default which is continuing unremedied and
unwaived), the Agent or the Security Agent (as the case may be)
may appoint any other bank or financial institution as its
successor;
15.21.2 the resignation of the Agent or the Security Agent (as the
case may be) shall take effect simultaneously with the
appointment of its successor on
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written notice of that appointment being given to the Borrower
and the Lenders;
15.21.3 the Agent or the Security Agent (as the case may be) shall
thereupon be discharged from all further obligations as agent
and/or security agent but shall remain entitled to the benefit of
the provisions of this Clause 15; and
15.21.4 the successor of the Agent or the Security Agent (as the case
may be) and each of the other parties to this Agreement shall
have the same rights and obligations amongst themselves as they
would have had if that successor had been a party to this
Agreement.
15.22 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 15.3 and
15.14, the Agent shall not have any fiduciary relationship with or be
deemed to be a trustee of or for any other person and nothing
contained in any Finance Document shall constitute a partnership
between any two or more Lenders or between the Agent and any other
person.
16 SET-OFF
A Finance Party may set off any matured obligation due from the Borrower
under any Finance Document (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party to
the Borrower, 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.
17 PAYMENTS
17.1 PAYMENTS Each amount payable by the Borrower under a Finance Document
shall be paid to such account at such bank as the Agent may from time
to time direct to the Borrower in the Currency of Account and in such
funds as are customary at the time for settlement of transactions in
the relevant currency in the place of payment. Payment shall be deemed
to have been received by the Agent on the date on which the Agent
receives authenticated advice of receipt, unless that advice is
received by the Agent on a day other than a Business Day or at a time
of day (whether on a Business Day or not) when the Agent in its
reasonable discretion considers that it is impossible or impracticable
for the Agent to utilise
62
the amount received for value that same day, in which event the
payment in question shall be deemed to have been received by the Agent
on the Business Day next following the date of receipt of advice by
the Agent.
17.2 NO DEDUCTIONS OR WITHHOLDINGS Each payment (whether of principal or
interest or otherwise) to be made by the Borrower under a Finance
Document shall, subject only to Clause 17.3, be made free and clear of
and without deduction for or on account of any Taxes or other
deductions, withholdings, restrictions, conditions or counterclaims of
any nature.
17.3 GROSSING-UP If at any time any law requires (or is interpreted to
require) the Borrower to make any deduction or withholding from any
payment, or to change the rate or manner in which any required
deduction or withholding is made, the Borrower will promptly notify
the Agent and, simultaneously with making that payment, will pay to
the Agent whatever additional amount (after taking into account any
additional Taxes on, or deductions or withholdings from, or
restrictions or conditions on, that additional amount) is necessary to
ensure that, after making the deduction or withholding, the relevant
Finance Parties receive a net sum equal to the sum which they would
have received had no deduction or withholding been made.
17.4 EVIDENCE OF DEDUCTIONS If at any time the Borrower is required by law
to make any deduction or withholding from any payment to be made by it
under a Finance Document, the Borrower will pay the amount required to
be deducted or withheld to the relevant authority within the time
allowed under the applicable law and will, no later than thirty (30)
days after making that payment, deliver to the Agent an original
receipt issued by the relevant authority, or other evidence reasonably
acceptable to the Agent, evidencing the payment to that authority of
all amounts required to be deducted or withheld.
17.5 REBATE If the Borrower pays any additional amount under Clause 17.3,
and a Finance Party subsequently receives a refund or allowance from
any tax authority which that Finance Party identifies as being
referable to that increased amount so paid by the Borrower, that
Finance Party shall, as soon as reasonably practicable, pay to the
Borrower an amount equal to the amount of the refund or allowance
received, if and to the extent that it may do so without prejudicing
its right to retain that refund or allowance and without putting
itself in any worse financial
63
position than that in which it would have been had the relevant
deduction or withholding not been required to have been made. Nothing
in this Clause 17.5 shall be interpreted as imposing any obligation on
any Finance Party to apply for any refund or allowance nor as
restricting in any way the manner in which any Finance Party organises
its tax affairs, nor as imposing on any Finance Party any obligation
to disclose to the Borrower any information regarding its tax affairs
or tax computations.
17.6 ADJUSTMENT OF DUE DATES If any payment or transfer of funds to be made
under a Finance Document, other than a payment of interest on a
Drawing, shall be due on a day which is not a Business Day, that
payment shall be made on the next succeeding Business Day (unless the
next succeeding Business Day falls in the next calendar month in which
event the payment shall be made on the next preceding Business Day).
Any such variation of time shall be taken into account in computing
any interest in respect of that payment.
17.7 CONTROL ACCOUNT The Agent shall open and maintain on its books a
control account in the name of the Borrower showing the advance of the
Loan and the computation and payment of interest and all other sums
due under this Agreement. The Borrower's obligations to repay the Loan
and to pay interest and all other sums due under this Agreement shall
be evidenced by the entries from time to time made in the control
account opened and maintained under this Clause 17.7 and those entries
will, in the absence of manifest error, be conclusive and binding.
18 NOTICES
18.1 COMMUNICATIONS IN WRITING Any communication to be made under or in
connection with this Agreement shall be made in writing and, unless
otherwise stated, may be made by fax or letter or (subject to Clause
18.6) electronic mail.
18.2 ADDRESSES The address and fax number (and the department or officer,
if any, for whose attention the communication is to be made) of each
party to this Agreement for any communication or document to be made
or delivered under or in connection with this Agreement are:
64
18.2.1 in the case of the Borrower, c/o Teekay Shipping (Canada) Ltd
Suite 2000, Bentall 5, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (fax no: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇) marked for the attention
of Director Finance;
18.2.2 in the case of each Lender, those appearing opposite its name
in Schedule 1;
18.2.3 in the case of the Agent, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ 10166-0396, United States of America (fax no: +1
▇▇▇ ▇▇▇ ▇▇▇▇) marked for the attention of Credit, ▇▇▇▇▇▇
▇▇▇▇▇/Erlend Bryn; and
18.2.4 in the case of the Security Agent, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany (fax no: + ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇) marked
for the attention of Credit Department;
or any substitute address, fax number, department or officer as any
party may notify to the Agent (or the Agent may notify to the other
parties, if a change is made by the Agent) by not less than five (5)
Business Days' notice.
18.3 DELIVERY Any communication or document made or delivered by one party
to this Agreement to another under or in connection this Agreement
will only be effective:
18.3.1 if by way of fax, when received in legible form; or
18.3.2 if by way of letter, when it has been left at the relevant
address or five (5) Business Days after being deposited in the
post postage prepaid in an envelope addressed to it at that
address; or
18.3.3 if by way of electronic mail, in accordance with Clause 18.6;
and, if a particular department or officer is specified as part of its
address details provided under Clause 18.2, if addressed to that
department or officer.
Any communication or document to be made or delivered to the Agent
will be effective only when actually received by the Agent.
All notices from or to the Borrower shall be sent through the Agent.
65
18.4 NOTIFICATION OF ADDRESS AND FAX NUMBER Promptly upon receipt of
notification of an address, fax number or change of address, pursuant
to Clause 18.2 or changing its own address or fax number, the Agent
shall notify the other parties to this Agreement.
18.5 ENGLISH LANGUAGE Any notice given under or in connection with this
Agreement must be in English. All other documents provided under or in
connection with this Agreement must be:
18.5.1 in English; or
18.5.2 if not in English, and if so required by the Agent, accompanied
by a certified English translation and, in this case, the English
translation will prevail unless the document is a constitutional,
statutory or other official document.
18.6 ELECTRONIC COMMUNICATION
(a) Any communication to be made in connection with this Agreement
may be made by electronic mail or other electronic means, if the
Borrower and the relevant Finance Party:
(i) agree that, unless and until notified to the contrary, this
is to be an accepted form of communication;
(ii) notify each other in writing of their electronic mail
address and/or any other information required to enable the
sending and receipt of information by that means; and
(iii) notify each other of any change to their address or any
other such information supplied by them.
(b) Any electronic communication made between the Borrower and the
relevant Finance Party will be effective only when actually
received in readable form and acknowledged by the recipient (it
being understood that any system generated responses do not
constitute an acknowledgement) and in the case of any electronic
communication made by the Borrower to a Finance Party only if it
is addressed in such a manner as the Finance Party shall specify
for this purpose.
66
19 PARTIAL INVALIDITY
If, at any time, any provision of a Finance Document is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction will in any way be affected or
impaired.
20 REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under a Finance Document shall operate
as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise or the exercise of any other
right or remedy. The rights and remedies provided in this Agreement are
cumulative and not exclusive of any rights or remedies provided by law.
21 MISCELLANEOUS
21.1 NO ORAL VARIATIONS No variation or amendment of a Finance Document
shall be valid unless in writing and signed on behalf of all the
Finance Parties.
21.2 FURTHER ASSURANCE If any provision of a Finance Document shall be
invalid or unenforceable in whole or in part by reason of any present
or future law or any decision of any court, or if the documents at any
time held by or on behalf of the Finance Parties or any of them are
considered by the Lenders for any reason insufficient to carry out the
terms of this Agreement, then from time to time the Borrower will
promptly, on demand by the Agent, execute or procure the execution of
such further documents as in the opinion of the Lenders are necessary
to provide adequate security for the repayment of the Indebtedness.
21.3 RESCISSION OF PAYMENTS ETC. Any discharge, release or reassignment by
a Finance Party of any of the security constituted by, or any of the
obligations of a Security Party contained in, a Finance Document shall
be (and be deemed always to have been) void if any act (including,
without limitation, any payment) as a result of which such discharge,
release or reassignment was given or made is subsequently wholly or
partially rescinded or avoided by operation of any law.
67
21.4 CERTIFICATES Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any Finance Document shall, save for manifest error or
on any question of law, be conclusive evidence as against the Borrower
of that amount.
21.5 COUNTERPARTS This Agreement may be executed in any number of
counterparts each of which shall be original but which shall together
constitute the same instrument.
21.6 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 A person who is not a
party to this Agreement has no right under the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ to enforce or to enjoy the benefit of any term
of this Agreement.
21.7 DISCLOSURE OF INFORMATION The Borrower authorises each Lender to
disclose any information and/or document(s) concerning its
relationship with such Lender (i) to authorities in any other
countries where such Lender or any Affiliate is represented and/or
where any Lender or any Affiliate may be requested information by any
regulatory authority, when this shall be deemed necessary in order for
such Lender or any Affiliate to meet its requirements for the
contribution to reduction or prevention of money laundering, terrorism
and corruption, and (ii) to any Affiliate of that Lender making it
possible to consolidate the client's total commitments and offer the
client any other products offered by that Lender or any Affiliate,
subject always to the duties of confidentiality on the Lenders set out
herein.
22 LAW AND JURISDICTION
22.1 GOVERNING LAW This Agreement shall in all respects be governed by and
interpreted in accordance with English law.
22.2 JURISDICTION For the exclusive benefit of the Finance Parties, the
parties to this Agreement irrevocably agree that the courts of England
are to have jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement and that any proceedings may be
brought in those courts.
22.3 ALTERNATIVE JURISDICTIONS Nothing contained in this Clause 22 shall
limit the right of the Finance Parties to commence any proceedings
against the Borrower in
68
any other court of competent jurisdiction nor shall the commencement
of any proceedings against the Borrower in one or more jurisdictions
preclude the commencement of any proceedings in any other
jurisdiction, whether concurrently or not.
22.4 WAIVER OF OBJECTIONS The Borrower irrevocably waives any objection
which it may now or in the future have to the laying of the venue of
any proceedings in any court referred to in this Clause 22, and any
claim that those proceedings have been brought in an inconvenient or
inappropriate forum, and irrevocably agrees that a judgment in any
proceedings commenced in any such court shall be conclusive and
binding on it and may be enforced in the courts of any other
jurisdiction.
22.5 SERVICE OF PROCESS Without prejudice to any other mode of service
allowed under any relevant law, the Borrower:
22.5.1 irrevocably appoints Teekay Shipping (UK) Ltd of ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ as its agent for service
of process in relation to any proceedings before the English
courts in connection with this Agreement; and
22.5.2 agrees that failure by a process agent to notify the Borrower
of the process will not invalidate the proceedings concerned.
69
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of TEEKAY OFFSHORE )
OPERATING L.P. )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DNB NOR BANK ASA (as a Lender) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of NORDEA BANK NORGE ASA )
(as a Lender) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of FORTIS CAPITAL CORP. )
(as a Lender) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DEUTSCHE SCHIFFSBANK )
AKTIENGESELLSCHAFT
(as a Lender) )
70
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of LANDESBANK HESSEN-THURINGEN )
GIROZENTRALE )
(as a Lender) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DNB NOR BANK ASA (as the Agent) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DEUTSCHE SCHIFFSBANK )
AKTIENGESELLSCHAFT )
(as the Security Agent) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DNB NOR BANK ASA (as an MLA) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of NORDEA BANK NORGE ASA )
(as an MLA) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of FORTIS CAPITAL CORP. )
(as an MLA) )
71
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of DNB NOR BANK ASA )
(as a bookrunner) )
SIGNED by ) -----------------------------------------
duly authorised for and on behalf ) [signed]
of NORDEA BANK NORGE ASA )
(as a bookrunner) )
72
CONFORMED COPY
DATED 2ND OCTOBER 2006
TEEKAY OFFSHORE OPERATING L.P.
(AS BORROWER)
- AND -
DNB NOR BANK ASA
NORDEA BANK NORGE ASA
FORTIS CAPITAL CORP.
AND OTHERS
(AS LENDERS)
- AND -
DNB NOR BANK ASA
(AS AGENT)
- AND -
DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
(AS SECURITY AGENT)
- AND -
DNB NOR BANK ASA
NORDEA BANK NORGE ASA
FORTIS CAPITAL CORP.
(AS MANDATED LEAD ARRANGERS)
- AND -
DNB NOR BANK ASA
NORDEA BANK NORGE ASA
(AS BOOKRUNNERS)
----------
US$940,000,000 SECURED
LOAN AGREEMENT
----------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
REF: 819/1138
CONTENTS
PAGE
----
1 Definitions and Interpretation ....................................... 1
2 The Loan and its Purposes ............................................ 18
3 Conditions of Utilisation ............................................ 18
4 Advance .............................................................. 23
5 Repayment ............................................................ 23
6 Prepayment ........................................................... 23
7 Interest ............................................................. 25
8 Indemnities .......................................................... 27
9 Fees ................................................................. 31
10 Security and Application of Moneys ................................... 32
11 Representations and Warranties ....................................... 33
12 Undertakings and Covenants ........................................... 38
13 Events of Default .................................................... 44
14 Assignment and Sub-Participation ..................................... 50
15 The Agent, the Security Agent and the Lenders ........................ 53
16 Set-Off .............................................................. 62
17 Payments ............................................................. 62
18 Notices .............................................................. 64
19 Partial Invalidity ................................................... 67
20 Remedies and Waivers ................................................. 67
21 Miscellaneous ........................................................ 67
22 Law and Jurisdiction ................................................. 68
SCHEDULE 1: The Lenders and the Commitments ............................. 70
SCHEDULE 2: Conditions Precedent and Subsequent ......................... 71
Part I: Conditions precedent to the First Drawdown Date .............. 71
Part II: Conditions subsequent to the First Drawdown Date ............ 74
Part III: Conditions precedent to the Step-up Date ................... 75
Part IV: Conditions subsequent to the Step-up Date ................... 77
SCHEDULE 3: Calculation of Mandatory Cost ............................... 78
SCHEDULE 4: Form of Drawdown Notice ..................................... 80
SCHEDULE 5: Form of Transfer Certificate ................................ 81
SCHEDULE 6: Form of Compliance Certificate .............................. 84
SCHEDULE 7: The Vessels ................................................. 85
Part I: The Initial Vessels .......................................... 85
Part II: The Step-up Vessels ......................................... 86
SCHEDULE 8: Reductions .................................................. 87