DATED 2 November 2004
ARLINGTON TANKERS LTD.
(AS BORROWER)
- AND -
FORTIS BANK (NEDERLAND) N.V.
AND
HSBC BANK PLC
(AS MANDATED LEAD ARRANGERS)
- AND -
FORTIS BANK NEDERLAND N.V.
(AS AGENT AND SECURITY TRUSTEE)
- AND -
FORTIS BANK (NEDERLAND) N.V.
AND
HSBC BANK PLC
AND OTHERS
(AS LENDERS)
- AND -
FORTIS BANK (NEDERLAND) N.V.
AND
HSBC BANK PLC
(AS SWAP PROVIDERS)
-----------------------------------
US$135,000,000 SECURED
LOAN FACILITY AGREEMENT
-----------------------------------
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▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
REF: 819/1162
CONTENTS
PAGE
1 Definitions and Interpretation.........................................2
2 The Loan and its Purpose..............................................18
3 Conditions Precedent and Subsequent...................................20
4 Representations and Warranties........................................24
5 Repayment and Prepayment..............................................28
6 Interest..............................................................28
7 The Master Agreements.................................................30
8 Fees..................................................................31
9 Security Documents....................................................32
10 Agency and Trust......................................................32
11 Covenants.............................................................42
12 Earnings Account and Cash Collateral Account..........................49
13 Events Of Default and Event of Mandatory Prepayment...................50
14 Set-Off, Lien and Application.........................................55
15 Assignment and Sub-Participation......................................55
16 Payments, Mandatory Prepayment, Reserve Requirements and Illegality...58
17 Communications........................................................62
18 General Indemnities...................................................63
19 Miscellaneous.........................................................65
20 Law and Jurisdiction..................................................69
SCHEDULE 1..................................................................71
The Guarantors and the Vessels.........................................71
SCHEDULE 2..................................................................72
The Banks and the Commitments..........................................72
SCHEDULE 3..................................................................73
Calculation of the Mandatory Cost......................................73
APPENDIX A..................................................................76
Form of Drawdown Notice................................................76
APPENDIX B..................................................................77
Form of Transfer Certificate...........................................77
LOAN AGREEMENT
DATED: 2 November 2004
BETWEEN:-
(1) ARLINGTON TANKERS LTD., a company incorporated under the laws of Bermuda
with its registered office at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇
▇▇, ▇▇▇▇▇▇▇ ("▇▇▇ BORROWER"); and
(2) FORTIS BANK (NEDERLAND) N.V. acting through its office at ▇▇▇▇▇▇ ▇▇▇'▇ ▇▇
▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ and HSBC BANK PLC acting through its office at ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as mandated lead arrangers
(the "ARRANGERS"); and
(3) FORTIS BANK (NEDERLAND) N.V., acting as agent and security trustee through
its office at ▇▇▇▇▇▇ ▇▇▇'▇ ▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ (in that capacity "THE
AGENT"); and
(4) the banks listed in Schedule 2, each acting through its office at the
address indicated against its name in Schedule 2 (together "THE BANKS" and
each a "BANK"); and
(5) FORTIS BANK (NEDERLAND) N.V. acting through its office at ▇▇▇▇▇▇ ▇▇▇'▇ ▇▇
▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ and HSBC BANK PLC acting through its office at ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as swap providers (each a
"SWAP PROVIDER" and together the "SWAP PROVIDERS").
WHEREAS:-
(A) Each of the Guarantors is or will be the registered owner of the Vessel
listed against its name in Schedule 1.
(B) Each of the Vessels is or will be registered in the ownership of her Owner
under the flag of the country indicated against its name in Schedule 1.
(C) Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate amount not exceeding one hundred and thirty five
million Dollars ($135,000,000) in order to allow the Borrower to downstream
such sums to the Guarantors to assist the Guarantors in financing the
acquisition of the Vessels.
(D) Each of the Swap Providers has entered or will enter into a Master
Agreement with the Borrower on or around the date of this Agreement.
IT IS AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
1.1.1 "THE ACCOUNT SECURITY DEED" means the Account Security
Deed referred to in Clause 9.4.
1.1.2 "THE ADDRESS FOR SERVICE" means c/o Conyers ▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or, in
relation to any of the Security Parties, such other
address in England and Wales as that Security Party may
from time to time designate by no fewer than ten days'
written notice to the Agent.
1.1.3 "THE ADMINISTRATION" has the meaning given to it in
paragraph 1.1.3 of the ISM Code.
1.1.4 the "ADVANCE DATE", in relation to the Drawing, means
the date on which the Drawing is advanced by the Banks
to the Borrower pursuant to Clause 2.
1.1.5 "AFFILIATES" means, in respect of a specified Person,
any Person that directly or indirectly controls, is
controlled by, or is under common control with, the
specified Person, and for this purpose "control" means
the ownership of more than fifty percent (50%) of the
voting share capital (or equivalent rights of
ownership) of such Person.
1.1.6 "APPROVED BROKERS" means Fearnleys AS, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Salles and any other broker so designated by the
Borrower and the Agent.
1.1.7 "ARLINGTON CHARTER GUARANTEES" means the guarantees and
indemnities executed by the Borrower in favour of each
of the Charterers in respect of the Owners' obligations
under the Charters (each an "ARLINGTON CHARTER
GUARANTEE").
1.1.8 "ARLINGTON MANAGEMENT GUARANTEE" means the guarantee
and indemnity executed by the Borrower in favour of the
Manager in respect of each of the Owners obligations
under the relevant Management Agreements.
1.1.9 "THE ASSIGNMENTS" means the deeds of assignment of
(inter alia) the Insurances, Earnings, Requisition
Compensation, Management Agreements, Charters and
Charter Guarantees referred to in Clause 9.2 (each an
"ASSIGNMENT").
1.1.10 "ATTRIBUTABLE PERCENTAGE" means, in respect of each
Vessel, the percentage set out against such Vessel in
Schedule 1.
1.1.11 "THE AVAILABILITY TERMINATION DATE" means 31 December
2004 or such later date as the Banks may in their
discretion agree.
1.1.12 "BREAK COSTS" means all costs, losses, premiums or
penalties incurred by the Agent or any Bank in the
circumstances contemplated by Clause 18.4, or as a
result of it receiving any prepayment of all or any
part of the Loan (whether pursuant to Clause 5 or
otherwise), or any other payment under or in relation
to the Security Documents on a day other than the due
date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in
liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan, and any
liabilities, expenses or losses incurred by the Agent
or any Bank in terminating or reversing, or otherwise
in connection with, any Transaction or any other
interest rate and/or currency swap, transaction or
arrangement entered into by the Agent or any Bank to
hedge any exposure arising under this Agreement, or in
terminating or reversing, or otherwise in connection
with, any open position arising under this Agreement.
1.1.13 "BUSINESS DAY" means a day on which banks are open for
the transaction of business of the nature contemplated
by this Agreement (and not authorised by law to close)
in ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
Rotterdam, the Netherlands and any other financial
centre which any Bank may consider appropriate for the
operation of the provisions of this Agreement.
1.1.14 "CASH COLLATERAL ACCOUNT" means a bank account opened
or to be opened in the name of the Borrower with the
Agent and designated "Arlington - Cash Collateral
Account".
1.1.15 "CASH COLLATERAL" means cash standing to the credit of
the Cash Collateral Account.
1.1.16 "CASH EQUIVALENTS" means the following where the
Borrower has free, immediate and direct access:
(a) any security issued directly or fully
guaranteed or insured by the United States of
America or any OECD government whose
securities are readily marketable in London,
Paris, Frankfurt or New York City, or any
agency or instrumentality thereof;
(b) other readily marketable securities or other
easily realisable investments having a rating
of at least A from Standard and Poor's
Ratings Group or ▇▇▇▇▇'▇ Investors Service,
Inc;
(c) any Eurodollar time deposit, overnight
deposit or banker's acceptance, issued by, or
time deposit of a commercial banking
institution which has, on a combined basis,
capital, surplus and undivided profit of not
less than $250,000,000 and has a Moody's
Agent Credit Service rating for short term
Agent deposits of at least P2;
(d) repurchase obligations with a term of not
more than ninety (90) days for underlying
securities of the types described in
paragraph (a) above entered into with any
commercial banking institution meeting the
qualifications specified in paragraph (c)
above;
(e) short term commercial paper issued by any
person, having one of the top two investment
ratings from either Standard & Poor's Ratings
Group or ▇▇▇▇▇'▇ Investors Service, Inc;
(f) investments in money market funds
substantially all of whose assets are
comprised of securities of the types
described in paragraphs (a) to (e) above;
(g) deposits which are unrestricted as to
withdrawal with commercial banking
institutions meeting the criteria set forth
in paragraph (c) above; and
(h) undrawn committed credit lines.
1.1.17 "CHARTERS" means in respect of each Vessel, the time
charters entered into or to be entered into between the
relevant Owner and the relevant Charterer (each a
"CHARTER" and together the "CHARTERS").
1.1.18 "CHARTERERS" means:
(a) in respect of the V-MAX Vessels, CM V-MAX I
Limited and CM V-▇▇▇ ▇▇ Limited or, at any
stage following a change of charterer as
contemplated by Clause 11.2.2(iii), Stena
Bulk AB; and
(b) in respect of the Stena Vessels, Stena Bulk
AB,
(each a "CHARTERER" and together the "CHARTERERS")
1.1.19 "CHARTER GUARANTEES" means:
(a) in respect of each of the V-MAX Vessels, a
performance guarantee issued or to be issued
by Concordia Maritime AB in favour of the
relevant Owner or, at any stage following a
change of charterer as contemplated by
Clause 11.2.2(iii), Stena AB; and
(b) in respect of each of the Stena Vessels, a
performance guarantee issued or to be issued
by Stena AB in favour of the relevant Owner.
1.1.20 "CHARTER SUBSTITUTION AGREEMENTS" means the agreements
entered into or to be entered into between Stena AB and
each Owner of a V-MAX Vessel pursuant to which Stena AB
has agreed that in the event that the Charter for that
Vessel terminates Stena AB will procure that Stena Bulk
AB will, in certain circumstances, enter into a
replacement charter for the remainder of the Facility
Period and that Stena AB will guarantee the obligations
of Stena Bulk AB as charterer thereunder.
1.1.21 "COMMERCIAL DOCUMENTS" means the Charters, the
Management Agreements, the Intercompany Funding
Agreement, the Sun Charters, the Management Agreement
Guarantees, the V-Max Charter Side Letters, the V-Max
Management Side Letters, the Charter Substitution
Agreements, the Arlington Charter Guarantees and the
Arlington Management Guarantee.
1.1.22 "COMMERCIAL PARTIES" means the Charterers, Concordia
Maritime AB, Stena AB and the Managers.
1.1.23 "COMMITMENT" means, in relation to each Bank, the
amount of the Loan which that Bank agrees to advance to
the Borrower as its several liability as indicated
against the name of that Bank in Schedule 2 and/or,
where the context permits, the amount of the Loan
advanced by that Bank and remaining outstanding.
1.1.24 a "COMMUNICATION" means any notice, approval, demand,
request or other communication from one party to this
Agreement to any other party to this Agreement.
1.1.25 "THE COMMUNICATIONS ADDRESS" means First Floor, The
Hayward Building, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ (fax no: + ▇▇ ▇ ▇▇▇ ▇▇▇▇) marked for the
attention of The President.
1.1.26 "THE COMPANY" means, at any given time and in relation
to any Vessel, the company responsible for the Vessel's
compliance with the ISM Code pursuant to paragraph
1.1.2 of the ISM Code.
1.1.27 "CONFIRMATION" means a Confirmation exchanged, or
deemed exchanged, between a Swap Provider and the
Borrower as contemplated by a Master Agreement.
1.1.28 "CREDIT SUPPORT DOCUMENT" means any document described
as such in either of the Master Agreements and, where
the context permits, any other document referred to in
any Credit Support Document which has the effect of
creating an Encumbrance in favour of a Swap Provider.
1.1.29 "CREDIT SUPPORT PROVIDER" means any person (other than
the Borrower) described as such in a Master Agreement.
1
1.1.30 "CURRENCY OF ACCOUNT" means, in relation to any payment
to be made to the Finance Parties under or pursuant to
any of the Security Documents, the currency in which
that payment is required to be made by the terms of the
relevant Security Document.
1.1.31 "THE DEEDS OF COVENANTS" means the deeds of covenants
referred to in Clause 9.1 (each a "DEED OF Covenants").
1.1.32 "DEFAULT RATE" means the rate of three per centum (3%)
per annum above the cost to the Agent of obtaining
funds in amount similar to the amount of the
Indebtedness or any relevant part of the Indebtedness
for such periods as the Agent shall determine in
accordance with Clause 6.4.
1.1.33 "DOC" means, in relation to each Company, a valid
Document of Compliance issued for the Company by the
Administration pursuant to paragraph 13.2 of the ISM
Code.
1.1.34 "DOLLARS" and "$" each means available and freely
transferable and convertible funds in lawful currency
of the United States of America.
1.1.35 "DRAWDOWN NOTICE" means a notice complying with Clause
2.3.
1.1.36 "DRAWING" means the Loan advanced by the Banks to the
Borrower in accordance with Clause 2.3.
1.1.37 "EARNINGS", in relation to a Vessel, means all hires,
freights, pool income and other sums payable to or for
the account of the Owner 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 the Vessel.
1.1.38 "THE EARNINGS ACCOUNT" means a bank account to be
opened in the name of the Borrower with the Agent and
designated "Arlington - Earnings Account".
1.1.39 "ENCUMBRANCE" means any mortgage, charge (fixed or
floating), pledge, lien, assignment, hypothecation,
preferential right, option, title retention or trust
arrangement or any other agreement or arrangement which
has the effect of creating security or payment
priority.
1.1.40 "EVENT OF DEFAULT" means any of the events set out in
Clause 13.2.
1.1.41 "EVENT OF MANDATORY PAYMENT" means the event set out in
Clause 13.3.
1.1.42 "THE 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 Borrower has ceased to be under any further actual
or contingent liability to the Finance Parties under or
in connection with the Security Documents.
1.1.43 "THE FEE LETTER" means a letter from the Agent to the
Borrower setting out certain fees, commissions and
other sums payable by the Borrower to the Agent in
connection with the Loan.
1.1.44 "FINAL MATURITY DATE" means the date which is five (5)
calendar years from the Advance Date.
1.1.45 "FINANCE PARTIES" means each of the Agent, the Banks
and the Swap Providers and "FINANCE PARTY" means any
one of them.
1.1.46 "GAAP" means generally accepted accounting principles
and procedures in the USA.
1.1.47 "THE GUARANTEE" means the joint and several guarantee
and indemnity of the Guarantors referred to in Clause
9.3.
1.1.48 "THE GUARANTORS" means each of the companies listed in
Schedule 1, each of which is a company incorporated
under the laws of Bermuda with its registered office at
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇,
Bermuda (together the "GUARANTORS" and each a
"GUARANTOR") and/or (where the context permits) any
other person or company who shall at any time during
the Facility Period give to the Finance Parties a
guarantee and/or indemnity for the repayment of all or
part of the Indebtedness.
1.1.49 a "HEDGING TRANSACTION" means a Transaction entered
into between a Swap Provider and the Borrower pursuant
to a Master Agreement for the purpose of hedging all or
part of the Borrower's interest rate risk pursuant to
this Agreement.
1.1.50 "THE INDEBTEDNESS" means the Loan; any Master Agreement
Liabilities; all other sums of any nature (together
with all interest on any of those sums) which from time
to time may be payable by the Borrower to the Finance
Parties pursuant to the Security Documents; any damages
payable as a result of any breach by any Security Party
of any of the Security Documents; and any damages or
other sums payable as a result of any of the
obligations of any Security Party under or pursuant to
any of the Security Documents being disclaimed by a
liquidator or any other person, or, where the context
permits, the amount thereof for the time being
outstanding.
1.1.51 an "INSTRUCTING GROUP" means any one or more Banks
whose combined Proportionate Shares exceed sixty six
point six per centum (66.6%).
1.1.52 "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 or her Earnings and
(where the context permits) all benefits thereof,
including all claims of any nature and returns of
premium.
1.1.53 "THE INTERCOMPANY FUNDING AGREEMENT" means the
agreement made between the Borrower and the Guarantors
under which (amongst other things) the Borrower will
provide funding to the Guarantors.
1.1.54 "INTEREST PAYMENT DATE" means each date for the payment
of interest in accordance with Clause 6.
1.1.55 "INTEREST PERIOD" means each interest period selected
by the Borrower or agreed by the Agent pursuant to
Clause 6.
1.1.56 "THE ISM CODE" means the International Management Code
for the Safe Operation of Ships and for Pollution
Prevention, as adopted by the
Assembly of the International Maritime Organisation on
4 November 1993 by resolution A.741 (18) and
incorporated on 19 May 1994 as chapter IX of the Safety
of Life at Sea Convention 1974.
1.1.57 "LAW" means any law, statute, treaty, convention,
regulation, instrument or other subordinate legislation
or other legislative or quasi-legislative rule or
measure, or any order or decree of any government,
judicial or public or other body or authority, or any
directive, code of practice, circular, guidance note or
other direction issued by any competent authority or
agency (whether or not having the force of law).
1.1.58 "LEVERAGE RATIO" means the ratio of the amount of the
Loan to the aggregate of the Market Values (as most
recently determined at the date of determination of the
Leverage Ratio) of those of the Vessels which remain
subject to the Mortgages and which have not become a
Total Loss, and in the case of any Vessel which has
been or may be declared a Total Loss but for which no
mandatory prepayment has yet fallen due pursuant to
Clause 13.3 the Market Value of such Vessel shall be
determined as if such Vessel had not become or been
declared a Total Loss.
1.1.59 "LIBOR" means the rate, rounded to the nearest four
decimal places downwards (if the digit displayed in the
fifth decimal place is 1,2,3 or 4) or upwards (if the
digit displayed in the fifth decimal place is 5,6,7,8
or 9) displayed as the British Bankers' Association
Interest Settlement Rate on any information service
selected by the Agent on which that rate is displayed,
for deposits in Dollars of amounts equal to the amount
of the Loan or any relevant part of the Loan for a
period equal in length to the relevant Interest Period,
or (if the Agent is for any reason unable to ascertain
that rate) the rate (rounded upwards to the nearest
whole multiple of one-sixteenth of one per centum) at
which deposits in Dollars of amounts comparable to the
amount of the Loan (or any relevant part of the Loan)
are offered to the Agent in the London Interbank market
for a period equal in length to the relevant Interest
Period.
1.1.60 "THE LOAN" means the aggregate amount from time to time
advanced by the Banks to the Borrower pursuant to
Clause 2 or, where the context permits, the amount
advanced and for the time being outstanding.
1.1.61 "THE MANAGERS" means in respect of the technical
management of the Vessels, Northern Marine Management
Ltd., or such other technical managers of the Vessels
nominated by the Borrower as the Finance Parties may
approve.
1.1.62 "THE MANAGEMENT AGREEMENTS" means the management
agreements entered into between the Owners and the
Managers relating to the Vessels.
1.1.63 "MANAGEMENT AGREEMENT GUARANTEES" means the guarantees
and indemnities executed by Stena AB in favour of each
of the Owners guaranteeing and indemnifying the Owner
in respect of the off-hire and reduced-hire payment
obligations of the Managers pursuant to the Management
Agreements (each a "MANAGEMENT AGREEMENT GUARANTEE").
1.1.64 "MANDATORY COST" means, for each Bank to which it
applies, the cost imputed to that Bank of compliance
with the mandatory liquid asset requirements of the
Bank of England and/or the banking supervision or other
costs imposed by the Financial Services Authority,
determined in accordance with Schedule 3.
1.1.65 "THE MARGIN" means:
(a) where on the first Business Day of any
Interest Period the Leverage Ratio
(calculated by reference to the then most
recent Market Value of the Vessels) is more
than fifty per centum (50%), the margin for
that Interest Period will be one point two
five per centum (1.25%) per annum; and
(b) where on the first Business Day of any
Interest Period the Leverage Ratio
(calculated by reference to the then most
recent Market Value of the Vessels) is less
than or equal to fifty per centum (50%), the
margin for that Interest Period will be one
point zero per centum (1.00%) per annum.
PROVIDED ALWAYS that the Margin may not change more
than once in any three month period.
1.1.66 "MARKET VALUE" means in respect of a valuation of a
Vessel the arithmetic average of three valuations
provided by two Approved Brokers (or other independent
sale and purchase brokers appointed by the Agent and
acceptable to the Borrower) and by a third broker
appointed by the Borrower and approved by the Agent.
Any such valuations shall, unless otherwise required by
the Banks, be made on the basis of a charter free sale
for prompt delivery for cash at arms length on normal
commercial terms as between a willing seller and a
willing buyer. In the case of any Vessel which has been
or may be declared a Total Loss, but for which no
mandatory prepayment has yet fallen due pursuant to
Clause 13.3, the Market Value of such Vessel shall be
determined as if such Vessel had not become or been
declared a Total Loss.
1.1.67 "MASTER AGREEMENTS" means any ISDA Master Agreement (or
any other form of master agreement relating to interest
or currency exchange transactions) entered into between
a Swap Provider and the Borrower during the Facility
Period, including each Schedule to any Master Agreement
and each Confirmation exchanged pursuant to any Master
Agreement (each of which shall be referred to as a
"MASTER AGREEMENT").
1.1.68 "THE MASTER AGREEMENT LIABILITIES" means, at any
relevant time, all liabilities of the Borrower to the
Swap Providers under or pursuant to the Master
Agreements, whether actual or contingent, present or
future.
1.1.69 "MATERIAL ADVERSE EFFECT" means a material adverse
effect on the business or financial condition of any
Security Party, the ability of any Security Party to
perform its obligations under any Security Document, or
the validity or enforceability of any Security
Document.
1.1.70 "THE MAXIMUM LOAN AMOUNT" means, subject to Clause 2.8,
one hundred and thirty five million Dollars
($135,000,000).
1.1.71 "THE MORTGAGEES' INSURANCES" means all policies and
contracts of mortgagees' interest insurance,
mortgagees' additional perils (oil pollution) insurance
and any other insurance which is or becomes customarily
taken out by banks or other financial institutions in
respect of vessels of similar age and type and under
similar management arrangements to the Vessels,
from time to time taken out by the Agent on behalf of
the Finance Parties in relation to the Vessels.
1.1.72 "THE MORTGAGES" means the first priority mortgages
referred to in Clause 9.1 (each a "MORTGAGE").
1.1.73 "NOTIONAL AMOUNT", in respect of any Hedging
Transaction, means the Notional Amount as defined in
the Confirmation relating to that Hedging Transaction.
1.1.74 "OWNER" means, in relation to a Vessel, the Guarantor
against whose name the name of that Vessel appears in
Schedule 1.
1.1.75 "PERSON" means any individual or entity.
1.1.76 "PERMITTED ENCUMBRANCES" means any Encumbrance which
has the prior written approval of the Agent, or any
Encumbrance arising either by the operation of law or
in the ordinary course of business of the Borrower or
an Owner which is promptly discharged.
1.1.77 "POTENTIAL EVENT OF DEFAULT" means any event which,
with the giving of notice and/or the passage of time
and/or the satisfaction of any materiality test, would
constitute an Event of Default.
1.1.78 "PROCEEDINGS" means any suit, action or proceedings
begun by a Finance Party arising out of or in
connection with the Security Documents.
1.1.79 "PROPORTIONATE SHARE" means, at any time, the
proportion which that Bank's Commitment (whether or not
advanced) then bears to the aggregate Commitments of
all the Banks (whether or not advanced).
1.1.80 "QUIET ENJOYMENT AGREEMENTS" means the agreements, one
for each Vessel, entered or to be entered into between
the relevant Owner, the relevant Charterer, the Manager
and the Agent.
1.1.81 "REPAYMENT DATE" means the date for payment of any
Repayment Instalment in accordance with Clause 5.
1.1.82 "REPAYMENT INSTALMENT" means any instalment of the Loan
to be repaid by the Borrower pursuant to Clause 5.
1.1.83 "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 the
Vessel being requisitioned for title or in any other
way compulsorily acquired (other than by way of
requisition for hire).
1.1.84 "THE SECURITY DOCUMENTS" means this Agreement, the
Mortgages, the Deeds of Covenants, the Assignments, the
Guarantee, the Account Security Deed, the Share Charge,
the Master Agreements and any other Credit Support
Documents 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.
1.1.85 "SECURITY PARTIES" means the Borrower, the Guarantors,
any other Credit Support Providers, and any other
person or company who may at any time during the
Facility Period be liable for, or provide security for,
all or any part of the Indebtedness, and "SECURITY
PARTY" means any one of them PROVIDED ALWAYS that any
Guarantor that is released pursuant to Clause 5.7 of
the Guarantee shall cease to be a Security Party with
effect from the date of such release.
1.1.86 "SELLERS" means, in relation to a Vessel, the companies
named as such in Schedule 1 to this Agreement, and
"Seller" means any one of them.
1.1.87 "THE SHARE CHARGE" means the charge over the issued
share capital of each of the Guarantors referred to in
Clause 9.5 (each a "SHARE CHARGE").
1.1.88 "SMC" means, in relation to each Vessel, a valid safety
management certificate issued for that Vessel by or on
behalf of the relevant Administration pursuant to
paragraph 13.4 of the ISM Code.
1.1.89 "SMS" means, in relation to each Vessel, a safety
management system for that Vessel developed and
implemented in accordance with the ISM Code and
including the functional requirements, duties and
obligations required by the ISM Code.
1.1.90 "STENA VESSELS" means (a) the two panamax tankers known
as "Stena Companion" and "Stena Compatriot" and (b) the
two product tankers known as "Stena Concord" and "Stena
Consul", each as identified in Schedule 1.
1.1.91 "SUN CHARTERS" means, in respect of each V-MAX Vessel,
the sub time charter entered into between Stena Bulk AB
(as agent for the relevant Charterer) and Sun
International Limited, and shall include any extension
thereof or any replacement thereof between the same
parties on terms conforming to the requirements of
Clause 11.2.2.
1.1.92 "TAXES" means all taxes, levies, imposts, duties,
charges, fees, deductions and withholdings (including
any related interest, fines, surcharges and penalties)
and any restrictions or conditions resulting in any
charge, other than taxes on the overall net income of
any of the Finance Parties and "TAX" and "TAXATION"
shall be interpreted accordingly.
1.1.93 "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 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 one month
after the capture, seizure, arrest, detention
or confiscation in question.
1.1.94 "TRANSACTION" means a transaction entered into between
either of the Swap Providers and the Borrower governed
by the Master Agreements.
1.1.95 "TRANSFER CERTIFICATE" means a certificate materially
in the form of Appendix B.
1.1.96 "TRANSFER DATE", in relation to a transfer of any of a
Bank's rights and/or obligations under or pursuant to
this Agreement, means the fifth Business
Day after the date of delivery of the relevant Transfer
Certificate to the Agent, or such later Business Day as
may be specified in the relevant Transfer Certificate.
1.1.97 "TRANSFEREE" means any bank or financial institution to
which a Bank transfers any of its rights and/or
obligations under or pursuant to this Agreement.
1.1.98 "THE TRUST PROPERTY" means:-
(a) the benefit of the covenant contained in
Clause 10; and
(b) all benefits arising under (including,
without limitation, all proceeds of the
enforcement of) each of the Security
Documents (other than this Agreement), with
the exception of any benefits arising solely
for the benefit of the Agent.
1.1.99 "VALUE ADJUSTED EQUITY" means the amount which is equal
to the Value Adjusted Total Assets of the Borrower less
the total liabilities of the Borrower as shown in the
Borrower's latest audited consolidated balance sheet.
1.1.100 "VALUE ADJUSTED TOTAL ASSETS" means the amount which is
equal to the total consolidated assets of the Borrower
as shown in the Borrower's latest audited consolidated
balance sheet less the goodwill (if any) of the
Borrower as shown in the Borrower's latest audited
balance sheet, as adjusted (in the case of the Vessels)
to reflect the current Market Values of the Vessels.
1.1.101 "THE VESSELS" means the vessels listed in Schedule 1
and everything now or in the future belonging to them
on board and ashore (each a "VESSEL").
1.1.102 "V-MAX CHARTER SIDE LETTERS" means the letters issued
by Stena AB addressed to each of the V-Max Vessel
Owners confirming that in the event that a V-Max Vessel
Owner terminates the Charter of its Vessel, Stena AB
will (i) procure that Stena Bulk AB enters into a new
time charter for the Vessel for the duration of the
original Charter, and (ii) guarantee the
obligations of Stena Bulk AB under such replacement
charters (each a "V-MAX CHARTER SIDE LETTER").
1.1.103 "V-MAX MANAGEMENT SIDE LETTERS" means the agreements
entered into by the Manager and the relevant Charterer
relating to the V-Max Vessels pursuant to which the
relevant Charterer agrees to indemnify the Manager in
the event that the Manager's costs under the relevant
Management Agreement for a V-Max Vessel exceed a
certain amount (each a "V-MAX MANAGEMENT SIDE LETTER").
1.1.104 "V-MAX VESSELS" means the two V-MAX tankers "Stena
Vision" and Stena Victory" identified in Schedule 1.
1.1.105 "WORKING CAPITAL" means current assets less current
liabilities (but ignoring for this purpose any
repayments of principal herunder).
1.2 INTERPRETATION
In this Agreement:-
1.2.1 words denoting the plural number include the singular
and vice versa;
1.2.2 words denoting persons include corporations,
partnerships, associations of persons (whether
incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
1.2.3 references to Recitals, Clauses, Schedules and
Appendices are references to recitals and clauses of,
and schedules and appendices to, this Agreement;
1.2.4 references to this Agreement include the Recitals, the
Schedules and the Appendices;
1.2.5 the headings and contents page(s) are for the purpose
of reference only, have no legal or other significance,
and shall be ignored in the interpretation of this
Agreement;
1.2.6 references to any document (including, without
limitation, to all or any of the Security Documents)
are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or
replaced from time to time;
1.2.7 references to statutes or provisions of statutes are
references to those statutes, or those provisions, as
from time to time amended, replaced or re-enacted;
1.2.8 words and expressions defined in the Master Agreements,
unless the context otherwise requires, have the same
meaning;
1.2.9 references to a Finance Party include its successors,
transferees and assignees;
1.2.10 references to times of day are to London time.
1.3 OFFER LETTER
Unless otherwise specifically agreed in writing between the
Borrower and the Arrangers, this Agreement supersedes the terms
and conditions contained in any correspondence relating to the
subject matter of this Agreement exchanged between a Finance
Party and the Borrower or their representatives prior to the date
of this Agreement.
2 THE LOAN AND ITS PURPOSE
2.1 AGREEMENT TO LEND Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of
the Security Documents, each of the Banks agrees to advance to
the Borrower its Commitment of an aggregate amount not exceeding
the Maximum Loan Amount to be used by the Borrower for the
purposes referred to in Recital (C).
2.2 DRAWINGS Subject to satisfaction by the Borrower of the
conditions set out in Clause 3.1, and subject to Clause 2.3, the
Loan shall be advanced to the Borrower in one Drawing by the
Agent transferring the amount of the Drawing to the Borrower by
such method of funds transfer as the Agent and the Borrower shall
agree.
2.3 ADVANCE OF DRAWINGS The Drawing shall be advanced in Dollars on a
Business Day provided that the Borrower shall have given to the
Agent not more than ten and not fewer than two (2) Business Days'
notice (to be given no later than 10.00 am) in writing materially
in the form set out in Appendix A of the required Advance Date
of the Drawing. The Drawdown Notice once given shall be
irrevocable and shall constitute a warranty by the Borrower
that:-
2.3.1 all conditions precedent to the advance of the Drawing
requested in that Drawdown Notice will have been
satisfied on or before the Advance Date requested;
2.3.2 no Event of Default or Potential Event of Default will
then have occurred;
2.3.3 no Event of Default or Potential Event of Default will
result from the advance of the Drawing in question; and
2.3.4 there has been no material adverse change in the
business, affairs or financial condition of any of the
Security Parties from that pertaining at the date of
this Agreement.
The Agent shall promptly notify each Bank of the receipt of each
Drawdown Notice, following which each Bank will make its
Proportionate Share of the amount of the requested Drawing
available to the Borrower through the Agent on the Advance Date
requested.
2.4 AVAILABILITY TERMINATION DATE No Bank shall be under any
obligation to advance all or any part of its Commitment after the
Availability Termination Date.
2.5 SEVERAL OBLIGATIONS The obligations of the Banks under this
Agreement are several. The failure of a Bank to perform its
obligations under this Agreement shall not affect the obligations
of the Borrower to any of the Finance Parties nor shall the
Finance Parties be liable for the failure of a Bank to perform
any of its obligations under or in connection with this
Agreement.
2.6 APPLICATION OF LOAN Without prejudice to the obligations of the
Borrower under this Agreement, the Finance Parties shall not be
obliged to concern themselves with the application of the Loan by
the Borrower.
2.7 LOAN AND CONTROL ACCOUNTS The Borrower will open and maintain
with the Agent such loan and control accounts as the Agent shall
consider necessary or desirable.
2.8 TOTAL LOSS OF VESSEL If a Vessel shall become a Total Loss prior
to drawdown, or is not tendered to the relevant Owner for
delivery or is rejected by the relevant
Owner when tendered for delivery, it is agreed that the Maximum
Loan Amount and each Bank's Commitment shall be reduced by the
relevant Attributable Percentage, but otherwise shall be
available for drawing. In such circumstances the conditions
precedent relating to such Vessel shall be deemed waived.
3 CONDITIONS PRECEDENT AND SUBSEQUENT
3.1 CONDITIONS PRECEDENT Before any Bank shall have any obligation to
advance any part of the Drawing, the Borrower shall deliver or
cause to be delivered to or to the order of the Agent the
following documents and evidence to the satisfaction of the Agent
(and the Agent shall notify the Borrower and the Banks upon being
so satisfied):
3.1.1 EVIDENCE OF INCORPORATION Such evidence as the Agent
may reasonably require that each Security Party and
each Commercial Party was duly incorporated in its
country of incorporation and remains in existence and,
where appropriate, in good standing, with power to
enter into, and perform its obligations under, those of
the Security Documents to which it is, or is intended
to be, a party, including (without limitation) a copy,
certified by a director or the secretary of the
Security Party or Commercial Party in question as true,
complete, accurate and unamended, of all documents
establishing or limiting the constitution of each
Security Party or Commercial Party.
3.1.2 CORPORATE AUTHORITIES A copy, certified by a director
or the secretary of the Security Party or Commercial
Party in question as true, complete, accurate and
neither amended nor revoked, of a resolution of the
directors of each Security Party
and each Commercial Party (together, where appropriate,
with signed waivers of notice of any directors'
meetings) approving, and authorising or
ratifying the execution of, those of the Security
Documents to which that Security Party or that
Commercial Party (as the case may be) is or is intended
to be a party and all matters incidental thereto.
3.1.3 OFFICER'S CERTIFICATE A certificate signed by a duly
authorised officer of each of the Security Parties and
each Commercial Party setting out the
names of the directors, officers and (except in the
case of the Borrower) shareholders of that Security
Party or that Commercial Party (as the case may be)
together with such evidence of the identity of each
signatory to a Security Document (other than the
Finance Parties) as the Agent may require.
3.1.4 POWER OF ATTORNEY The power of attorney of each of the
Security Parties and each Commercial Party under which
any documents are to be executed or transactions
undertaken by that Security Party or that Commercial
Party.
3.1.5 VESSEL DOCUMENTS Photocopies, certified as true,
accurate and complete by a director or the secretary or
other officer of the Borrower, of (in respect of each
Vessel):-
(a) the protocols of delivery and acceptance
relating to that Vessel between the relevant
Seller and the Owner;
(b) that Vessel's current Safety Construction,
Safety Equipment, Safety Radio and Load Line
Certificates;
(c) that Vessel's current Certificate of
Financial Responsibility issued pursuant to
the United States Oil Pollution ▇▇▇ ▇▇▇▇;
(d) that Vessel's current SMC;
(e) that Vessel's current ISSC;
(f) the relevant Company's current DOC; and
(g) if applicable, the Owner's current Carrier
Initiative Agreement with the United States'
Custom Service;
in each case together with all addenda, amendments or
supplements.
3.1.6 EVIDENCE OF OWNERSHIP Transcripts of register (or
equivalent) issued by the Registrar of Ships (or
equivalent official) at the Vessel's port of registry
confirming that each Vessel is on the Advance Date
owned by her Owner and free of registered Encumbrances
other than these for which discharges are available for
immediate registration upon drawdown of the Loan.
3.1.7 EVIDENCE OF INSURANCE Evidence that each Vessel is
insured in the manner required by the Security
Documents and that letters of undertaking will be
issued in the manner required by the Security
Documents.
3.1.8 CONFIRMATION OF CLASS A Certificate of Confirmation of
Class for hull and machinery confirming that each
Vessel is classed in accordance with the requirements
of the relevant Deed of Covenants.
3.1.9 THE SECURITY DOCUMENTS The Security Documents, together
with all notices and other documents required by any of
them, duly executed and, in the case of the Mortgages,
in a form capable of immediate registration with first
priority through the Registrar of Ships (or equivalent
official) at the port of registry of the Vessel
concerned.
3.1.10 THE CHARGE DOCUMENTS The documents required by the
Share Charges.
3.1.11 DRAWDOWN NOTICE A Drawdown Notice.
3.1.12 PROCESS AGENTS A letter from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
accepting their appointment by each of the Security
Parties as agent for service of Proceedings pursuant to
the Security Documents, and a letter from Stena (UK)
Limited accepting their appointment by each of the
Charterers and the Manager as agent for service of
Proceedings under each of the Quiet Enjoyment
Agreements.
3.1.13 PASSPORTS Copies of the passports of each of the
directors of the Borrower.
3.1.14 MANDATES Such duly signed forms of mandate, and/or
other evidence of the opening of the Earnings Account
and the Cash Collateral Account, as the Agent may
require.
3.1.15 THE FEE LETTER The Fee Letter countersigned on behalf
of the Borrower by way of acceptance of its terms and
such evidence as the Agent may reasonably require that
the fees and expenses payable pursuant to the Fee
Letter have been paid in full.
3.1.16 LEGAL OPINIONS Confirmation satisfactory to the Agent
that legal opinions required by the Agent on the laws
of England and Wales, Bermuda, The
Netherlands, Scotland and Sweden will be given
substantially in the form required by the Agent.
3.1.17 CONSENTS A certificate from the Borrower that all (if
any) consents, licences, approvals and authorisations
of, or registrations with or declarations to, any
governmental authority, bureau or agency which may be
required in connection with the Security Documents have
been made or obtained and remain in full force and
effect.
3.1.18 CASH COLLATERAL ACCOUNT The sum of one Dollar ($1)
shall have been deposited in the Cash Collateral
Account.
3.1.19 INTEREST RATE SWAPS The Borrower shall have entered
into Transactions which give the Borrower fixed
interest rate exposure for the whole of the Loan for
the Facility Period.
3.1.20 EVIDENCE OF FUNDS Such evidence as the Agent may
reasonably require that the Borrower or the Guarantors
have sufficient funds available to pay the balance of
the purchase price of the Vessels.
3.1.21 COMMERCIAL DOCUMENTS Photocopies, certified as true,
accurate and complete by a director, secretary or other
officer of a party thereto, of each of the Commercial
Documents.
3.1.22 QUIET ENJOYMENT AGREEMENTS The Quiet Enjoyment
Agreements, duly executed.
3.1.23 LETTERS FROM NORTHERN MARINE MANAGEMENT USA LLC AND
STENA BULK AB A duly executed letter from each of
Northern Marine Management USA LLC and Stena Bulk AB
confirming its agreement to the terms of the loss
payable clauses for the Vessels.
3.2 CONDITIONS SUBSEQUENT The Borrower undertakes to deliver or to
cause to be delivered to the Agent on, or as soon as practicable
after, the Advance Date, the following additional documents and
evidence:-
3.2.1 EVIDENCE OF REGISTRATION Evidence of registration of
the Mortgages, in each case with first priority, with
the Registrar of Ships (or equivalent official) at the
port of registry of the Vessel concerned.
3.2.2 LETTERS OF UNDERTAKING Letters of undertaking as
required by the Security Documents in form and
substance acceptable to the Agent.
3.2.3 LEGAL OPINIONS The legal opinions referred to in Clause
3.1.16.
3.2.4 COMPANIES ACT REGISTRATIONS Evidence that the
prescribed particulars of the Security Documents have
been delivered to the Registrar of Companies of
Bermuda.
3.3 NO WAIVER If the Banks in their sole discretion agree to advance
any part of the Loan 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 and the
advance of any part of the Loan shall not be taken as a waiver of
the Agent's right to require production of all the documents and
evidence required by Clause 3.1.
3.4 FORM AND CONTENT All documents and evidence delivered to the
Agent pursuant to this Clause shall:-
3.4.1 be in form and substance acceptable to the Agent acting
reasonably;
3.4.2 be accompanied, if required by the Agent, by
translations into the English language, certified in a
manner acceptable to the Agent;
3.4.3 if reasonably required by the Agent, be certified,
notarised, legalised or attested in a manner acceptable
to the Agent.
3.5 EVENT OF DEFAULT No Bank shall be under any obligation to advance
any part of its Commitment nor to act on any Drawdown Notice if,
at the date of the Drawdown Notice or at the date on which the
advance of the Drawing is requested in the Drawdown Notice, an
Event of Default or Potential Event of Default shall have
occurred, or if an Event of Default or Potential Event of Default
would result from the advance of the Drawing.
4 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Finance Parties at the
date of this Agreement and (by reference to the facts and circumstances
then pertaining) at the date of
the Drawdown Notice, at the Advance Date and (in relation only to Clauses
4.1, 4.3, 4.4, 4.5, 4.15 and 4.16) at each Interest Payment Date as
follows:
4.1 INCORPORATION AND CAPACITY Each of the Security Parties is a body
corporate duly constituted and existing and (where applicable) in
good standing under the law of its country of incorporation, in
each case with perpetual corporate existence and the power to ▇▇▇
and be sued, to own its assets and to carry on its business, and
all of the corporate shareholders (if any) of each Security Party
(other than the Borrower) are duly constituted and existing under
the laws of their countries of incorporation with perpetual
corporate existence and the power to ▇▇▇ and be sued, to own
their assets and to carry on their business.
4.2 SOLVENCY None of the Security Parties is insolvent or in
liquidation or administration or subject to any other insolvency
procedure, and no receiver, administrative receiver,
administrator, liquidator, trustee or analogous officer has been
appointed in respect of any of the Security Parties or all or any
part of their assets.
4.3 BINDING OBLIGATIONS The Security Documents when duly executed and
delivered will constitute the legal, valid and binding
obligations of the Security Parties enforceable in accordance
with their respective terms subject to laws affecting creditors'
rights generally.
4.4 SATISFACTION OF CONDITIONS All acts, conditions and things
required to be done and satisfied and to have happened prior to
the execution and delivery of the Security Documents in order to
constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their
respective terms have been done, satisfied and have happened in
compliance with all applicable laws.
4.5 REGISTRATIONS AND CONSENTS All (if any) consents, licences,
approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency
which may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents
have been obtained or made and remain in full force and effect
and the Borrower is not aware of any event or circumstance which
could reasonably be expected adversely to affect the right of the
relevant Security Parties to hold and/or
obtain renewal of any such consents, licences, approvals or
authorisations. The provisions of this Clause 4.5 shall not apply
to the registrations set out in Clause 3.2 until such time as
those registrations have been completed.
4.6 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 adversely affected
the decision of a person considering whether or not to make loan
facilities of the nature contemplated by this Agreement available
to the Borrower.
4.7 MATERIAL ADVERSE CHANGE The Borrower is not aware of any event of
series of events which is likely to have a Material Adverse
Effect.
4.8 NO MATERIAL LITIGATION There is no action, suit, arbitration or
administrative proceeding pending or to its knowledge about to be
pursued before any court, tribunal or governmental or other
authority which would, or would be likely to, have a materially
adverse effect on the business, assets, financial condition or
creditworthiness of any of the Security Parties.
4.9 NO BREACH OF LAW OR CONTRACT The execution, delivery and
performance of the Security Documents will not contravene any
contractual restriction or any law binding on any of the Security
Parties or (except in relation to the Borrower) on any
shareholder (whether legal or beneficial) of any of the Security
Parties, or the constitutional documents of any of the Security
Parties, nor result in the creation of, nor oblige any of the
Security Parties to create, any Encumbrance over all or any of
its assets, with the exception of the Encumbrances created by or
pursuant to the Security Documents, and, in entering into those
of the Security Documents to which it is, or is to be, a party,
and in borrowing the Loan, the Borrower is acting for its own
account.
4.10 NO DEDUCTIONS The Borrower is not required to make any deduction
or withholding from any payment which it may be obliged to make
to the Finance Parties under or pursuant to the Security
Documents.
4.11 NO ESTABLISHED PLACE OF BUSINESS IN THE UNITED KINGDOM OR UNITED
STATES None of the Security Parties has, nor will any of them
have during the Facility Period, an
established place of business in the United Kingdom or the United
States of America.
4.12 PARI PASSU RANKING The payment obligations of each of the
Security Parties under the Security Documents to which it is a
party rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies incorporated
in the relevant Security Party's country of incorporation.
4.13 NO DEFAULT No Event of Default is continuing or might reasonably
be expected to result from the advance of the Loan, and no other
event or circumstance is outstanding which constitutes a default
under any other document which is binding on any of the Security
Parties or to which its assets are subject which might have a
Material Adverse Effect.
4.14 NO STAMP TAXES Under the law of jurisdiction of incorporation of
each relevant Security Party it is not necessary that any stamp,
registration or similar tax be paid on or in relation to the
Security Documents or the transactions contemplated by the
Security Documents.
4.15 GOVERNING LAW AND ENFORCEMENT The choice of English law as the
governing law of any of the Security Documents expressed to be
governed by English law will be recognised and enforced in the
jurisdiction of incorporation of each relevant Security Party,
and any judgment obtained in England in relation to any such
Security Document will be recognised and enforced in the
jurisdiction of incorporation of each relevant Security Party.
4.16 IMMUNITY IN LEGAL PROCEEDINGS None of the Security Parties has
any immunity in any legal proceedings.
4.17 ADVERSE CONSEQUENCES To the best of the Borrower's knowledge the
execution, delivery and subsequent performance by each of the
Security Parties and Finance Parties of the Security Documents
will not have any adverse consequences for the Finance Parties.
4.18 USE OF LOAN The Loan will be used for the purposes specified in
Recital (C).
5 REPAYMENT AND PREPAYMENT
5.1 REPAYMENT The Borrower agrees to repay the Loan to the Agent as
agent for the Banks by one single Repayment Instalment payable on
the Final Maturity Date.
5.2 PREPAYMENT The Borrower may prepay the Loan in whole or in part
in an amount equal to an integral multiple of five million
Dollars ($5,000,000) (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 of its intention to do so. Any notice pursuant to this Clause
once given shall be irrevocable and shall oblige the Borrower to
make the prepayment referred to in the notice on the Business Day
specified in the notice, together with all interest accrued on
the amount prepaid up to and including that Business Day.
5.3 PREPAYMENT INDEMNITY If the Borrower shall, subject always to
Clause 5.2, make a prepayment on a Business Day other than the
last day of an Interest Period in respect of the whole of the
Loan, they shall, in addition to the amount prepaid and accrued
interest, pay to the Agent on behalf of the Banks any amount
which the Agent may certify is necessary to compensate the Banks
for any Break Costs incurred by the Agent or any of the Banks as
a result of the making of the prepayment in question.
5.4 APPLICATION OF PREPAYMENTS Any voluntary prepayment in an amount
less than the Indebtedness shall be applied in satisfaction or
reduction first of any costs and other amounts outstanding;
secondly of all interest outstanding; and thirdly against the
Repayment Instalments on a pro rata basis and all amounts due
under the Master Agreements arising as a consequence of the
operation of Clause 7 in relation to such payment. Any
involuntary prepayments as a result of the sale or total loss of
a Vessel shall be applied in accordance with clause 14.2.
5.5 NO REBORROWING No amount repaid or prepaid pursuant to this
Agreement may in any circumstances be reborrowed.
6 INTEREST
6.1 INTEREST PERIODS The period during which the Loan shall be
outstanding pursuant to this Agreement shall be divided into
consecutive Interest Periods of one, two, three, or six months'
duration, as selected by the Borrower by written notice to the
Agent not later than 11.00 a.m. on the third Business Day (or, in
the case of the first Interest Period, the second Business Day)
before the beginning of the Interest Period in question, or such
other duration as may be agreed by the Banks in their discretion.
6.2 BEGINNING AND END OF INTEREST PERIODS The first Interest Period
shall begin on the Advance Date. Notwithstanding Clause 6.1 the
final Interest Period shall end on the Final Maturity Date.
6.3 INTEREST RATE During each Interest Period interest shall accrue
on the Loan at the rate determined by the Agent to be the
aggregate of (a) the Margin, (b) LIBOR determined at or about
11.00 a.m. on the second Business Day prior to the beginning of
that Interest Period and (c) the Mandatory Cost.
6.4 FAILURE TO SELECT INTEREST PERIOD If the Borrower at any time
fails to select or agree an Interest Period in accordance with
Clause 6.1, the interest rate applicable after the expiry of the
then current Interest Period shall be the rate determined by the
Agent in accordance with Clause 6.3 for consecutive Interest
Periods each of one (1) month's duration.
6.5 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 in the London Interbank market differs, in
accordance with the prevailing market practice) and shall be paid
by the Borrower to the Agent on behalf of the Banks on the last
day of each Interest Period and additionally, during any Interest
Period exceeding six months, on the last day of each successive
six month period after the beginning of that Interest Period.
6.6 ENDING OF INTEREST PERIODS Each Interest Period shall, subject to
Clauses 6.2 and 6.3, end on the date which numerically
corresponds to the date on which the immediately preceding
Interest Period ended (or, in the case of the first Interest
Period, to the Advance Date) in the calendar month which is the
number of months selected or agreed after the calendar month in
which the immediately preceding Interest Period ended (or, in the
case of the first Interest Period, in which the Advance Date
occurred), except that:-
6.6.1 if there is no numerically corresponding date in the
calendar month in which the Interest Period ends, the
Interest Period shall end on the last Business Day in
that calendar month; and
6.6.2 if any Interest Period would end on a day which is not
a Business Day, that Interest Period shall end on the
next succeeding Business Day (unless the next
succeeding Business Day falls in the next calendar
month, in which event the Interest Period in question
shall end on the next preceding Business Day).
Any adjustment made pursuant to Clause 6.6.1 or 6.6.2 shall be
ignored for the purpose of determining the date on which any
subsequent Interest Period shall end.
6.7 DEFAULT RATE If the Borrower fails to pay any amount payable by
it under the Security Documents, such amount shall bear interest
up to the date of actual payment (both before and after judgment)
at the Default Rate, compounded at such intervals of not less
than one month as the Agent shall determine, which interest shall
be payable from time to time by the Borrower to the Agent on
behalf of the Banks on demand.
6.8 DETERMINATIONS CONCLUSIVE Each determination of an interest rate
made by the Agent in accordance with Clause 6 shall (save in the
case of manifest error or on any question of law) be final and
conclusive.
7 THE MASTER AGREEMENTS
7.1 PURPOSE The Swap Providers and the Borrower have entered, and/or
may during the Facility Period enter, into one or more
Transactions pursuant to a Master Agreement, the terms and
conditions of each of which are or will be specified in a
Confirmation sent by a Swap Provider to the Borrower.
7.2 ADDITIONAL TERMINATION EVENT If the Loan is for any reason not
advanced to the Borrower on or before the Availability
Termination Date, and the Swap Provider and the Borrower have
entered into any Transactions on or before the Availability
Termination Date, for the purposes of the relevant Master
Agreement an Additional Termination Event (with the Swap Provider
as the Affected Party) shall be deemed to have occurred on the
Availability Termination Date.
7.3 ADJUSTMENT OF NOTIONAL AMOUNTS If the aggregate amount of the
Loan actually advanced by the Banks to the Borrower is less than
the Notional Amount (or the aggregate Notional Amounts) of the
Hedging Transactions entered into on or before the last Advance
Date, the obligations of the Borrower in respect of those Hedging
Transactions shall, unless otherwise agreed by the Swap Provider,
be calculated, so far as the Swap Provider considers it
practicable to do so, by reference to a Notional Amount (or
aggregate Notional Amounts) equal to the amount of the Loan
actually advanced.
7.4 EFFECT OF PREPAYMENT If the Borrower, subject always to Clause 5,
prepays part of the Loan (whether pursuant to Clause 5, Clause
11.2.2 or any other provision of this Agreement), and the amount
of the Loan remaining outstanding after application of that
prepayment is less than the Notional Amount (or the aggregate
Notional Amounts) of the Hedging Transactions then in effect
(reduced, if appropriate, in accordance with the Confirmations
relating to those Hedging Transactions), the obligations of the
Borrower in respect of those Hedging Transactions shall, unless
otherwise agreed by the Swap Provider, be calculated, so far as
the Swap Provider considers it practicable to do so, by reference
to a Notional Amount (or aggregate Notional Amounts) equal to the
amount of the Loan remaining outstanding after application of the
prepayment in question.
7.5 AUTHORITY In order and to the extent necessary to give effect to
Clauses 7.3 and 7.4, or in the event of voluntary or mandatory
prepayment by the Borrower of the whole of the Loan, the Borrower
irrevocably authorises the Swap Provider to amend, restructure,
unwind, cancel, net out, terminate, liquidate, transfer or assign
any of the rights and/or obligations created pursuant to the
Master Agreement in respect of those Hedging Transactions, and/or
to enter into any other interest rate exchange and/or hedging
transaction or commitment with the Borrower or with any other
counterparty approved by the Swap Provider for the purpose of
terminating that part of the Hedging Transaction attributable to
the amount by which such Notional Amount is reduced under such
Clause.
8 FEES
The Borrower shall pay to or to the order of the Agent the fees,
commissions and other sums referred to in the Fee Letter in the amounts and
on the dates set out in the Fee Letter.
9 SECURITY DOCUMENTS
As security for the repayment of the Indebtedness, the Borrower shall
execute and deliver to the Agent or cause to be executed and delivered to
the Agent, on or before the Advance Date, the following Security Documents
in such forms and containing such terms and conditions as the Agent shall
require:-
9.1 THE MORTGAGES a first priority statutory mortgage over each
Vessel together in each case with a collateral deed of covenants;
9.2 THE ASSIGNMENTS a deed of assignment of (inter alia) the Charter,
Charter Guarantee, Management Agreement, Insurances, Earnings and
Requisition Compensation of each Vessel;
9.3 THE GUARANTEE the joint and several guarantee and indemnity of
the Guarantors;
9.4 THE ACCOUNT SECURITY DEED an account security deed in respect of
all amounts from time to time standing to the credit of the
Earnings Account and the Cash Collateral Account; and
9.5 THE SHARE CHARGE a charge over all the issued shares of each of
the Guarantors.
10 AGENCY AND TRUST
10.1 APPOINTMENT Each of the Finance Parties appoints the Agent its
agent for the purpose of administering the Loan and the Security
Documents.
10.2 AUTHORITY Each of the Finance Parties irrevocably authorises the
Agent (subject to Clauses 10.4 and 10.19):-
10.2.1 to execute the Security Documents (other than this
Agreement) and the Quiet Enjoyment Agreements on its
behalf;
10.2.2 to collect, receive, release or pay any money on its
behalf;
10.2.3 acting on the instructions from time to time of an
Instructing Group or the Finance Parties (as the case
may be) to give or withhold any waivers, consents or
approvals under or pursuant to any of the Security
Documents;
10.2.4 acting on the instructions from time to time of and
Instructing Group to exercise, or refrain from
exercising, any discretions under or pursuant to any of
the Security Documents; and
10.2.5 to enforce the Security Documents on its behalf.
The Agent shall have no duties or responsibilities as agent or as
security trustee other than those expressly conferred on it by
the Security Documents and shall not be obliged to act on any
instructions from the Finance Parties or an Instructing Group if
to do so would, in the opinion of the Agent, be contrary to any
provision of the Security Documents or to any law, or would
expose the Agent to any actual or potential liability to any
third party.
10.3 TRUST The Agent agrees and declares, and each of the Finance
Parties acknowledges, that, subject to the terms and conditions
of this Clause, the Agent holds the Trust Property on trust for
the Finance Parties, in accordance with their respective
Proportionate Shares, absolutely. Each of the Finance Parties
agrees that the obligations, rights and benefits vested in the
Agent in its capacity as security trustee shall be performed and
exercised in accordance with this Clause. The Agent in its
capacity as security trustee shall have the benefit of all of the
provisions of this Agreement benefiting it in its capacity as
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:
10.3.1 the Agent (and any attorney, agent or delegate of the
Agent) may indemnify itself or himself out of the Trust
Property against all liabilities, costs, fees, damages,
charges, losses and expenses sustained or incurred by
him or it in relation to the taking or holding of any
of the Trust Property or in connection with the
exercise or purported exercise of the rights, trusts,
powers and discretions vested in the Agent or any other
such person by or pursuant to the Security Documents or
in respect of anything else done or omitted to be done
in any way relating to the Security Documents; and
10.3.2 the Finance Parties acknowledge that the Agent shall be
under no obligation to insure any property nor to
require any other person to insure any property and
shall not be responsible for any loss which may be
suffered by any person as a result of the lack or
insufficiency of any insurance; and
10.3.3 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.
10.4 LIMITATIONS ON AUTHORITY Except with the prior written consent of
each of the Finance Parties, the Agent shall not be entitled to
:-
10.4.1 release or vary any security given for the Borrower'
obligations under this Agreement; nor
10.4.2 waive the payment of any sum of money payable by any of
the Security Parties under the Security Documents; nor
10.4.3 change the meaning of the expressions "INSTRUCTING
GROUP" or "MARGIN"; nor
10.4.4 exercise, or refrain from exercising, any discretion,
or give or withhold any consent, the exercise or giving
of which is, by the terms of this Agreement, expressly
reserved to the Banks or the Swap Providers; nor
10.4.5 extend the due date for the payment of any sum of money
payable by any of the Security Parties under the
Security Documents; nor
10.4.6 take or refrain from taking any step if the effect of
such action or inaction may lead to the increase of the
obligations of a Bank or the Swap Providers under any
of the Security Documents; nor
10.4.7 agree to change the currency in which any sum is
payable under the Security Documents (other than in
accordance with the terms of the Security Documents);
nor
10.4.8 agree to amend this Clause 10.4.
10.5 LIABILITY Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Finance Parties for
anything done or omitted to be done by the
Agent under or in connection with the Security Documents unless
as a result of the Agent's gross negligence or wilful misconduct.
10.6 ACKNOWLEDGEMENT Each of the Finance Parties acknowledges that:-
10.6.1 it has not relied on any representation made by the
Agent or any of the Agent's directors, officers,
employees or agents or by any other person acting or
purporting to act on behalf of the Agent to induce it
to enter into any of the Security Documents;
10.6.2 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;
10.6.3 it has made its own appraisal of the creditworthiness
of the Security Parties;
10.6.4 the Agent shall not have any duty or responsibility at
any time to provide it with any credit or other
information relating to any of the Security Parties
unless that information is received by the Agent
pursuant to the express terms of the Security
Documents.
Each of Finance Parties 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.
10.7 LIMITATIONS ON RESPONSIBILITY The Agent shall have no
responsibility to any of the Security Parties or to the Finance
Parties on account of:-
10.7.1 the failure of a Finance Party or of any of the
Security Parties to perform any of their respective
obligations under the Security Documents;
10.7.2 the financial condition of any of the Security Parties;
10.7.3 the completeness or accuracy of any statements,
representations or warranties made in or pursuant to
any of the Security Documents, or in or
pursuant to any document delivered pursuant to or in
connection with any of the Security Documents;
10.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any
document executed or delivered pursuant to or in
connection with any of the Security Documents.
10.8 THE AGENT'S RIGHTS The Agent may:
10.8.1 assume that all representations or warranties made or
deemed repeated by any of the Security Parties in or
pursuant to any of the Security Documents are true and
complete, unless, in its capacity as the Agent, it has
acquired actual knowledge to the contrary; and
10.8.2 assume that no Event of Default or Potential Event of
Default has occurred unless, in its capacity as the
Agent, it has acquired actual knowledge to the
contrary; and
10.8.3 rely on any document or Communication believed by it to
be genuine; and
10.8.4 rely as to legal or other professional matters on
opinions and statements of any legal or other
professional advisers selected or approved by it; and
10.8.5 rely as to any factual matters which might reasonably
be expected to be within the knowledge of any of the
Security Parties on a certificate signed by or on
behalf of that Security Party; and
10.8.6 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 Finance Parties (or, where
applicable, by an Instructing Group) and unless and
until the Agent has received from the Finance Parties
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.
10.9 THE AGENT'S DUTIES The Agent shall:-
10.9.1 if requested in writing to do so by a Finance Party
make enquiry and advise the Finance Parties as to the
performance or observance of any of the provisions of
the Security Documents by any of the Security Parties
or as to the existence of an Event of Default; and
10.9.2 inform the Finance Parties promptly of any Event of
Default of which the Agent has actual knowledge.
10.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any
representation or warranty made or deemed repeated by any of the
Security Parties or actual knowledge of the occurrence of any
Event of Default or Potential Event of Default unless a Finance
Party or any of the Security Parties 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.
10.11 OTHER BUSINESS The Agent may, without any liability to account to
the Finance Parties generally engage in any kind of banking or
trust business with any of the Security Parties or any of their
respective subsidiaries or associated companies or with a Finance
Party as if it were not the Agent.
10.12 INDEMNITY The Finance Parties 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:-
10.12.1 all amounts payable by the Borrower to the Agent
pursuant to Clause 18 to the extent that those amounts
are not paid by the Borrower;
10.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security
Documents, or the performance of its duties and
obligations, or the exercise of its rights, powers,
discretions or remedies under or pursuant to any of the
Security Documents; or in connection with any action
taken or omitted by the Agent under or pursuant to any
of the Security Documents, unless in any case those
liabilities, damages, costs or claims arise solely from
the Agent's wilful misconduct.
10.13 EMPLOYMENT OF AGENTS In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of
money and documents and the payment of money) and to act or
refrain from taking action in reliance on the opinion of, or
advice or information obtained from, any lawyer, banker, broker,
accountant, valuer or any other person believed by the Agent in
good faith to be competent to give such opinion, advice or
information.
10.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the
order of each of the Banks that Bank's Proportionate Share of
every sum of money received by the Agent pursuant to the Security
Documents or the Mortgagees' Insurances (with the exception of
any amounts payable pursuant to Clause 8 and/or the Fee Letter
and any amounts which, by the terms of the Security Documents,
are paid to the Agent for the account of the Agent alone or
specifically for the account of one or more Banks and except for
amounts in respect of the Master Agreement which shall be paid to
the Swap Provider) and until so paid such amount shall be held by
the Agent on trust absolutely for that Bank.
10.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to
a Finance Party until it has itself received payment of that sum.
If, however, the Agent does pay any sum to a Finance Party on
account of any amount prospectively due to that Finance Party
pursuant to Clause 10.14 before it has itself received payment of
that amount, and the Agent does not in fact receive payment
within five Business Days after the date on which that payment
was required to be made by the terms of the Security Documents or
the Mortgagees' Insurances, each Finance Party receiving any such
payment will, on demand by the Agent, refund to the Agent an
amount equal to the amount received by it, together with an
amount sufficient to reimburse the Agent for any amount which the
Agent may certify that it has been required to pay by way of
interest on money borrowed to fund the amount in question during
the period beginning on the date on which that amount was
required to be paid by the terms of the Security Documents or the
Mortgagees' Insurances and ending on the date on which the Agent
receives reimbursement.
10.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the
Banks and the Agent, if at any time a Bank receives or recovers
by way of set-off, the exercise of any lien or otherwise (other
than from any assignee or transferee of or sub-participant in
that Bank's Commitment), an amount greater than that Bank's
Proportionate Share of any sum due from any of the Security
Parties under the Security Documents (the amount of the excess
being referred to in this Clause as the "EXCESS AMOUNT") then:-
10.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
10.16.2 that Bank shall pay to the Agent an amount equal to the
Excess Amount within ten days of its receipt or
recovery of the Excess Amount; and
10.16.3 the Agent shall treat that payment as if it were a
payment by the Security Party in question on account of
the sum owed to the Banks as aforesaid and shall
account to the Banks in respect of the Excess Amount in
accordance with the provisions of this Clause.
However, if a Bank has commenced any Proceedings to recover sums
owing to it under the Security Documents and, as a result of, or
in connection with, those Proceedings has received an Excess
Amount, the Agent shall not distribute any of that Excess Amount
to any other Bank which had been notified of the Proceedings and
had the legal right to, but did not, join those Proceedings or
commence and diligently prosecute separate Proceedings to enforce
its rights in the same or another court.
10.17 RESCISSION OF EXCESS AMOUNT If all or any part of any Excess
Amount is rescinded or must otherwise be restored to any of the
Security Parties or to any other third party, the Banks which
have received any part of that Excess Amount by way of
distribution from the Agent pursuant to this Clause shall repay
to the Agent for the account of the Bank which originally
received or recovered the Excess Amount, the amount which shall
be necessary to ensure that the Banks share rateably in
accordance with their Proportionate Shares in the amount of the
receipt or payment retained, together with interest on that
amount at a rate equivalent to that (if any) paid by the Bank
receiving or recovering the Excess Amount to the person to whom
that Bank is liable to make payment in respect of such amount,
and Clause 11.16.3 shall apply only to the retained amount.
10.18 PROCEEDINGS Each of the Finance Parties shall notify one another
of the proposed commencement of any Proceedings under any of the
Security Documents prior to their commencement.
10.19 INSTRUCTIONS Other than in the circumstances set out in clauses
10.2.3 and 10.2.4, for which no further instructions are
required, where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the
Banks or of an Instructing Group each of the Banks shall provide
the Agent with instructions within three Business Days of the
Agent's request (which request may be made orally or in writing).
If a Bank does not provide the Agent with instructions within
that period, that Bank shall be bound by the decision of the
Agent. Nothing in this Clause shall limit the right of the Agent
to take, or refrain from taking, any action without obtaining the
instructions of the Banks or an Instructing Group if the Agent in
its discretion considers it necessary or appropriate to take, or
refrain from taking, such action in order to preserve the rights
of the Banks under or in connection with the Security Documents.
In that event, the Agent will notify the Banks of the action
taken by it as soon as reasonably practicable, and the Banks
agree to ratify any action taken by the Agent pursuant to this
Clause.
10.20 COMMUNICATIONS Any Communication under this Clause shall be
given, delivered, made or served, in the case of the Agent (in
its capacity as Agent or as one of the Banks), and in the case of
the other Banks, at the address or fax number indicated in
Schedule 2 and in the case of the Swap Providers the
communication details set forth in clause 17.1.2.
10.21 PAYMENTS All amounts payable to a Finance Party under this Clause
shall be paid to such account at such bank as that Bank or that
Swap Provider may from time to time direct in writing to the
Agent.
10.22 RETIREMENT Subject to a successor being appointed in accordance
with this Clause, the Agent (a) may retire as agent and/or
security trustee at any time without assigning any reason by
giving to the Borrower, the Banks and the Swap Providers
notice of its intention to do so and (b) must retire when
instructed to do so in writing by an Instructing Group, in which
event the following shall apply:
10.22.1 the Finance Parties may within thirty days after the
date of the Agent's notice appoint a successor to act
as agent and/or security trustee or, if they fail to do
so, the Agent may appoint any other bank or financial
institution as its successor;
10.22.2 the resignation of the Agent shall take effect
simultaneously with the appointment of its successor on
written notice of that appointment being given to the
Borrower and the Finance Parties;
10.22.3 the Agent shall thereupon be discharged from all
further obligations as agent and/or security trustee
but shall remain entitled to the benefit of the
provisions of this Clause;
10.22.4 the Agent's successor and each of the other parties to
this Agreement shall have the same rights and
obligations amongst themselves as they would have had
if that successor had been a party to this Agreement.
10.23 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 10.3 and
10.14, the Agent shall not have any fiduciary relationship with
or be deemed to be a trustee of or for a Finance Party and
nothing contained in any of the Security Documents shall
constitute a partnership between any two or more Finance Parties
or between the Agent and any Finance Party.
10.24 THE AGENT AS A BANK The expression "THE BANKS" when used in the
Security Documents includes the Agent in its capacity as one of
the Banks. The Agent shall be entitled to exercise its rights,
powers, discretions and remedies under or pursuant to the
Security Documents in its capacity as one of the Banks in the
same manner as any other Bank and as if it were not also the
Agent.
10.25 THE AGENT AS A "FINANCE PARTY" The expression "THE FINANCE
PARTIES" when used in the Security Documents includes the Agent
in its capacity as one of the Finance Parties. The Agent shall be
entitled to exercise its rights, powers, discretions and remedies
under or pursuant to the Security Documents in its capacity as
one of the Finance Parties in the same manner as any other
Finance Party and as if it were not also the Agent.
10.26 THE AGENT AS SECURITY TRUSTEE Unless the context otherwise
requires, the expression "THE AGENT" when used in the Security
Documents includes the Agent acting in its capacities both as
agent and security trustee.
11 COVENANTS
The Borrower covenants with the Finance Parties in the following terms.
11.1 NEGATIVE COVENANTS
The Borrower will not without the Agent's prior written consent:
11.1.1 NO DISPOSALS OR THIRD PARTY RIGHTS dispose of or create
or permit to arise or continue any Encumbrance or other
third party right on or over all or any part of its
present or future assets or undertaking (including,
without limitation, any of its rights under or in
connection with the Master Agreements and any amount at
any time payable by it to the Agent under or pursuant
to the Master Agreements) or permit any Encumbrance or
other third party right on or over all or any of the
Guarantors' present or future assets or undertaking
other than Permitted Encumbrances; nor
11.1.2 NO BORROWINGS except from the Guarantors, borrow any
money or incur any obligations under leases other than
office premises and office equipment for their own use;
nor
11.1.3 NO SUBSTANTIAL LIABILITIES except in the ordinary
course of business, incur any liability to any third
party which is of a substantial nature; nor
11.1.4 NO DEALINGS WITH MASTER AGREEMENTS assign, novate or in
any other way transfer any of its rights or obligations
under or pursuant to either of the Master Agreements,
nor enter into any interest rate exchange or hedging
agreement with anyone other than a Swap Provider, nor
any other agreement or commitment the effect of which
is materially to prejudice the hedging of the
Borrower's interest rate risk effected by the Hedging
Transactions from time to time entered into between the
Borrower and a Swap Provider; nor
11.1.5 NO OTHER BUSINESS engage in no other business other
than acting as the holding company of the Guarantors
and will procure that the Guarantors
engage in no business other than the ownership,
operation, chartering and management of the Vessel
owned by them; nor
11.1.6 NO LOANS OR OTHER FINANCIAL COMMITMENTS make any loan
nor enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability
in respect of any obligation of any other person other
than loans to the Guarantors and guarantees by the
Borrower of the obligations of each Owner under the
Charter and the Management Agreement in respect of its
Vessel on an unsecured basis; nor
11.1.7 NO DIVIDENDS (i) pay any dividends or make any other
distributions to shareholders or enter into any
transaction which has the same commercial effect as a
distribution to shareholders during the continuance of
an Event of Default or Potential Event of Default; and
(ii) prior to the occurrence of an Event of Default or
Potential Event of Default, pay any dividends or make
any other distributions to shareholders or enter into
any transaction which has the same commercial effect as
a distribution to shareholders unless the ratio of the
aggregate of the Market Values of those Vessels which
remain subject to the Mortgages and which have not
become a Total Loss to the amount of the Loan
(expressed as a percentage) is not less than one
hundred and forty per centum (140%); nor
11.1.8 DE-LISTING permit its shares to be de-listed from the
New York Stock Exchange; nor
11.1.9 MERGER enter into any amalgamation, demerger, merger or
corporate reconstruction; nor
11.1.10 ARMS LENGTH TRANSACTIONS enter into transactions with
Affiliates (other than the Guarantors) other than on an
arms-length basis.
11.2 POSITIVE COVENANTS
11.2.1 REGISTRATION OF VESSELS The Borrower undertakes to
procure that the registration of the Vessels under the
flags indicated in Schedule 1 is maintained by the
Guarantors for the duration of the Facility Period. A
change of flag shall only be permitted with the Agent's
prior written consent, such consent not to be
unreasonably withheld.
11.2.2 CHARTERS AND MANAGEMENT AGREEMENTS Any changes to the
Charters and the Management Agreements may only be made
with the Agent's prior written consent acting on the
instructions of the Banks (not to be unreasonably
withheld). On expiration of the relevant Sun Charters,
unless they are extended at a time charter rate at
least equal to the basic hire payable under the Charter
of such Vessel, or if either Sun Charter should
otherwise terminate during the Facility Period, the
Borrower undertakes to procure that the relevant
Charterer (or, in the case of (iii) below, the relevant
Owner), within a period of thirty (30) days from any
such expiration or termination, either
(i) enters in to a new charter for that Vessel at
a time charter rate at least equal to the
basic hire payable under the relevant
Charter, with a company having a credit
rating of at least BBB with Standard & Poors
or Baa 2 from ▇▇▇▇▇'▇; or
(ii) provides cash collateral initially in an
amount of seven million five hundred thousand
Dollars ($7,500,000) decreasing quarterly
thereafter pro rata as security for its
payment obligations under the relevant
Charter; or
(iii) enters into a new time charter for such
Vessel with Stena Bulk AB for a period at
least equal to the balance of the Facility
Period and at a rate at least equal to the
basic hire payable under the relevant
Charter, such charter to be guaranteed by
Stena AB
and that first priority security will be granted to the
Agent on behalf of the Finance Parties over any such
replacement charters, charter guarantees and/or cash
deposits standing as security for charter obligations
to the extent within the control of the Borrower or the
Owners, and that reasonable endeavours will be used to
obtain the same security (and any relevant
acknowledgements to notices of assignment) from other
parties to such documentation.
11.2.3 ADDITIONAL SECURITY The Vessels shall be valued at
least once per year and on such other occasions as the
Agent may require. One valuation each year during the
Facility Period, any valuations following an Event of
Default
and any valuations conducted when the Leverage Ratio is
equal to or more than seventy five per centum (75%)
shall be at the Borrower's expense. Any other
valuations shall be at the expense of the Banks. If and
so often as the aggregate of the Market Values of the
Vessels (determined in accordance with clause 1.1.66)
plus the value of any additional security (other than
Cash Collateral or Cash Equivalents) for the time being
provided to the Finance Parties pursuant to this Clause
shall be less than one hundred and twenty five per
centum (125%) of the amount of the Loan less any Cash
Collateral or Cash Equivalents provided as security
under this Clause, the Borrower will, within thirty
days of the request of the Agent to do so, at the
Borrower's option:-
(a) pay to the Agent for credit to the Cash
Collateral Account a cash deposit in the
amount of the shortfall to be secured in
favour of the Finance Parties as additional
security for the payment of the Indebtedness;
or
(b) give to Agent as security trustee for the
Finance Parties other additional security in
amount and form acceptable to the Finance
Parties in their discretion (with Cash
Collateral or Cash Equivalents being
automatically deemed acceptable); or
(c) prepay the amount of the Indebtedness which
will ensure that the aggregate of the Market
Values of the Vessels (determined as
aforesaid) plus the value of any such
additional security is not less than one
hundred and twenty five per centum (125%) of
the amount of the Loan less any Cash
Collateral or Cash Equivalents.
Clauses 5.4, 5.5 and 5.6 shall apply, mutatis mutandis,
to any prepayment made pursuant to this Clause and the
value of any additional security provided pursuant to
this Clause shall be determined by the Agent in its
discretion, other than Cash Collateral or Cash
Equivalents which shall be given face value on a Dollar
for Dollar basis.
Where the Borrower has provided additional security
pursuant to this Clause, the Borrower may request that
the Agent obtain new valuations on a date falling not
earlier than three months after the date such
additional
security was provided. If the aggregate amount of the
Market Values of the Vessels plus the value of any
additional security (other than Cash Collateral or Cash
Equivalents) (the "NEW SECURITY Amount") is greater
than one hundred and thirty five per centum (135%) of
the amount of the Loan (less any Cash Collateral or
Cash Equivalents) then provided that no Event of
Default has occurred and is continuing, the Agent shall
release to the Borrower, upon the Borrower's written
request and at the Borrower's expense, any such
additional security such that after its release the New
Security Amount will be at least equal to one hundred
and thirty five per centum (135%) of the amount of the
Loan (less any Cash Collateral or Cash Equivalents).
The Agent shall also release any Cash Collateral if and
to the extent that the Borrower simultaneously makes a
voluntary prepayment of the Loan in an equivalent
amount.
11.2.4 FINANCIAL STATEMENTS The Borrower will supply to the
Agent, without request:
(a) the annual consolidated financial statements
of the Borrower for each financial year of
the Borrower ending during the Facility
Period, containing (amongst other things) the
Borrower's profit and loss account for, and
balance sheet at the end of, each such
financial year, prepared in accordance with
GAAP consistently applied, and audited by a
firm of chartered accountants (or equivalent)
acceptable to the Agent, in each case as soon
as these are available and in any event
within one hundred and twenty (120) days of
the end of the financial year to which they
relate; and
(b) the interim unaudited financial statements of
the Borrower for each quarter-year ending
during the Facility Period, prepared in
accordance with generally accepted accounting
principles and practices applicable to
companies incorporated in the Borrower's
country of incorporation consistently
applied, in each case as soon as these are
available and in any event within sixty (60)
days of the end of the quarter to which they
relate.
11.2.5 COMPLIANCE CERTIFICATE The Borrower will promptly
supply to the Agent a at the same time as delivering to
the Agent its interim unaudited financial
statements pursuant to Clause 11.2.4(b) above a
compliance certificate demonstrating its compliance
with the financial covenants contained in Clause 11.3.
11.2.6 OTHER INFORMATION The Borrower will promptly supply to
the Agent details of any change to its board of
directors, copies of all financial and other
information from time to time given by the Borrower to
its shareholders and creditors and such information and
explanations as the Agent may from time to time require
in connection with the operation of the Vessels and the
Borrower's profit and liquidity, and will procure that
the Agent be given the like information and
explanations relating to all other Security Parties.
11.2.7 EVIDENCE OF GOODSTANDING The Borrower will from time to
time on the request of the Agent provide the Agent with
evidence in form and substance satisfactory to the
Agent that the Security Parties and all corporate
shareholders of any of the Security Parties (except the
Borrower) remain in good standing.
11.2.8 EVIDENCE OF CURRENT COFR Without limiting the
Borrower's obligations under Clause 11.2.6, the
Borrower will from time to time on the request of the
Agent provide the Agent with such evidence as the Agent
may reasonably require that each Vessel (whilst subject
to a Mortgage) has a valid and current Certificate of
Financial Responsibility pursuant to the United States
Oil Pollution ▇▇▇ ▇▇▇▇.
11.2.9 ISM CODE COMPLIANCE The Borrower will:-
(a) procure that each of the Vessels remains for
the duration of the Facility Period subject
to a SMS;
(b) maintain a valid and current SMC for each of
the Vessels throughout the Facility Period;
(c) procure that each Company maintains a valid
and current DOC throughout the Facility
Period;
(d) immediately notify the Agent in writing of
any actual or threatened withdrawal,
suspension, cancellation or modification of
the SMC of any Vessel or of the DOC of any
Company;
(e) immediately notify the Agent in writing of
any "accident" or "major non-conformity", as
each of those terms is defined in the
Guidelines on the Implementation of the
International Safety Management Code by
Administrations adopted by the Assembly of
the International Maritime Organisation
pursuant to Resolution A.788(19), and of the
steps being taken to remedy the situation;
and
(f) not without the prior written consent of the
Agent (which will not be unreasonably
withheld) change the identity of any Company.
11.2.10 INSPECTION OF RECORDS The Borrower will permit the
inspection of financial records and accounts at
reasonable times by the Agent or its nominee on
reasonable notice.
11.2.11 PARI PASSU OBLIGATIONS The Borrower will ensure that,
throughout the Facility Period, the obligations of the
Security Parties under or pursuant to the Security
Documents rank at least pari passu with all other
existing or future unsecured indebtedness, obligations
or liabilities of the Security Parties, other than any
mandatorily preferred by law.
11.2.12 NOTIFICATION OF EVENT OF DEFAULT The Borrower will
notify the Agent in writing of the occurrence of any
Event of Default or Potential Event of Default promptly
upon becoming aware of the same.
11.2.13 OTHER INFORMATION The Borrower shall provide the Agent
with such other information concerning the business and
financial condition of the Borrower and the Guarantors
as the Agent may reasonably require.
11.3 FINANCIAL COVENANTS
The Borrower covenants that throughout the Facility Period (with
such covenants being assessed on a group basis to include all
subsidiaries of the Borrower whose results are consolidated into
the results of the Borrower):
11.3.1 the Leverage Ratio (expressed as a percentage) will be
not less than eighty per centum (80%);
11.3.2 its Value Adjusted Equity (expressed as a
percentage)will be not less than thirty per centum
(30%) of its Value Adjusted Total Assets; and
11.3.3 it will maintain a positive Working Capital at all
times.
12 EARNINGS ACCOUNT AND CASH COLLATERAL ACCOUNT
12.1 MAINTENANCE OF ACCOUNTS The Borrower shall maintain the Earnings
Account, the Cash Collateral Account and any other accounts it
may have (other than one account to be held at Bank of Bermuda,
which shall have a balance of under one hundred thousand Dollars
($100,000) at all times) with the Agent for the duration of the
Facility Period free of Encumbrances and rights of set off other
than as created by or pursuant to the Security Documents.
12.2 EARNINGS The Borrower shall procure that all Earnings are
credited to the Earnings Account.
12.3 RELEASE OF SURPLUS Any amount remaining to the credit of the
Earnings Account shall (unless an Event of Default or Potential
Event of Default shall have occurred and be continuing) be
released to or to the order of the Borrower. Amounts standing to
the credit of the Cash Collateral Account shall be released to or
to the order of the Borrower in accordance with Clause 11.2.3.
12.4 RESTRICTION ON WITHDRAWAL During the Facility Period no sum may
be withdrawn from the Earnings Account (except in accordance with
this Clause) without the prior written consent of the Agent.
12.5 RELOCATION OF EARNINGS ACCOUNT At any time following the
occurrence and during the continuation of an Event of Default,
the Agent may without the consent of the Borrower relocate the
Earnings Account to any other branch of the Agent, without
prejudice to the continued application of this Clause and the
rights of the Finance Parties under or pursuant to the Security
Documents.
13 EVENTS OF DEFAULT AND EVENT OF MANDATORY PREPAYMENT
13.1 THE AGENT'S RIGHTS If any of the events set out in Clause 13.2
occurs, the Agent may (and, if instructed to do so by an
Instructing Group, shall) by notice to the Borrower declare the
Banks to be under no further obligation to the Borrower under or
pursuant to this Agreement and may (and, if instructed to do so
by an Instructing Group shall) declare all or any part of the
Indebtedness (including such unpaid interest as shall have
accrued) to be immediately payable, in which event the
Indebtedness (or the part of the Indebtedness referred to in the
Agent's notice) shall immediately become due and payable without
any further demand or notice of any kind.
13.2 EVENTS OF DEFAULT The events referred to in Clause 13.1 are:-
13.2.1 PAYMENT DEFAULT if the Borrower defaults in the payment
of any part of the Indebtedness when due (except as a
result of banking error, provided the payment default
is remedied within two (2) Business Days of the
Borrower being made aware of the non-payment); or
13.2.2 OTHER DEFAULT if any of the Security Parties fails to
observe or perform any of the covenants, conditions,
undertakings, agreements or obligations on its part
contained in any of the Security Documents in any
material respect or shall in any other way be in breach
of or do or cause to be done any act repudiating or
evidencing an intention to repudiate any of the
Security Documents and such breach (if capable of
remedy) is not remedied within fourteen (14) days after
the Agent has given the Borrower notice thereof; or
13.2.3 MISREPRESENTATION OR BREACH OF WARRANTY if any
representation or warranty made or repeated by any of
the Security Parties to any of the Finance Parties in
any of the Security Documents, or in or pursuant to any
notice delivered to the Agent under or pursuant to any
of the Security Documents, is false or incorrect or
misleading in any material respect; or
13.2.4 EXECUTION if a distress or execution or other process
of a court or authority is levied on any of the
property of any of the Security Parties before or after
final judgment or by order of any competent court or
authority and is not satisfied within seven days of
levy; or
13.2.5 INSOLVENCY EVENTS if any of the Security Parties:-
(a) resolves to appoint, or applies for, or
consents to, the appointment of a receiver,
administrative receiver, trustee,
administrator or liquidator of itself or of
all or part of its assets; or
(b) is unable or admits its inability to pay its
debts as they fall due; or
(c) makes a general assignment for the benefit of
creditors or enters into a moratorium on
payment of any of its indebtedness; or
(d) ceases trading or threatens to cease trading;
or
(e) has appointed an Inspector under the
Companies ▇▇▇ ▇▇▇▇ or any statutory provision
analogous thereto; or
13.2.6 INSOLVENCY PROCEEDINGS if any order or judgment is
given by any court, for the bankruptcy, liquidation,
winding up, administration or re-organisation of any of
the Security Parties or for the appointment of a
receiver, administrative receiver, administrator,
liquidator or trustee of any of the Security Parties or
of all or part of the assets of any of the Security
Parties, or if any of the Security Parties appoints or
purports to appoint such receiver, administrative
receiver, administrator, liquidator or trustee; or
13.2.7 IMPOSSIBILITY OR ILLEGALITY if any event occurs which
would, or would with the passage of time, render
performance of any of the Security Documents by any of
the Security Parties impossible, unlawful or
unenforceable by the Finance Parties; or
13.2.8 CONDITIONS SUBSEQUENT if any of the conditions set out
in Clause 3.2 is not satisfied in accordance with that
Clause; or
13.2.9 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any
consent, licence, approval, authorisation, filing,
registration or other requirement of any governmental,
judicial or other public body or authority 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 not
obtained or is revoked, suspended, withdrawn or
withheld, or is modified in a manner which is, or
is likely to be, prejudicial to the interests of the
Finance Parties, or ceases to remain in full force and
effect; or
13.2.10 CURTAILMENT OF BUSINESS if the business of any of the
Security Parties is wholly or partially curtailed or
suspended 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
13.2.11 MASTER AGREEMENT TERMINATION if a notice is sent by
either of the Swap Providers under section 6(a) of a
Master Agreement, or by any person under section
6(b)(iv) of a Master Agreement, in either case
designating an Early Termination Date for the purpose
of a Master Agreement, or if either of the Master
Agreements are for any other reason terminated,
cancelled, suspended, rescinded, revoked or otherwise
ceases to remain in full force and effect unless
promptly replaced by alternative Master Agreements and
Confirmations giving the Borrower fixed interest rate
exposure for the Loan for the remainder of the Facility
Period; or
13.2.12 ACCELERATION OF OTHER INDEBTEDNESS if any obligation
for borrowed money or other financial indebtedness of
any of the Security Parties which is in excess of one
million Dollars ($1,000,000) becomes due or capable of
being declared due prior to its stated maturity by
reason of default on the part of that Security Party,
or is not repaid or satisfied at maturity, or any
commitment for financial indebtedness in excess of one
million Dollars ($1,000,000) is cancelled or suspended
by reason of default of a Security Party; or
13.2.13 CHALLENGE TO REGISTRATION if the registration of any
Vessel or any Mortgage is contested by the relevant
Guarantor or becomes void or voidable or liable to
cancellation or termination, or if the validity or
priority of any Mortgage is contested by the relevant
Guarantor; or
13.2.14 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 in its discretion considers that, as a
result, the security conferred by the Security
Documents is materially prejudiced; or
13.2.15 MATERIAL ADVERSE CHANGE ETC. if
(a) anything is done or permitted or omitted to
be done by any of the Security Parties which
in the reasonable opinion of the Agent
jeopardises or imperils (or may jeopardise or
imperil) the rights conferred on the Finance
Parties by the Security Documents in a
material respect; or
(b) there occurs (in the reasonable opinion of
the Agent) any change in the business,
affairs or financial condition of any of the
Security Parties or any of the Commercial
Parties from that pertaining at the date of
this Agreement; or
(c) if any of the Charters are for any reason
terminated, cancelled, suspended, rescinded,
revoked or otherwise cease to remain in full
force and effect other than due to effluxion
of time or Total Loss (or, in the case of a
V-MAX Vessel, alternative arrangements being
put in place within the periods, and in
conformity with the requirements of, Clause
11.2.2),
where the occurrence of such event or circumstances
has a Material Adverse Effect; or
13.2.16 DE-LISTING if the shares in the Borrower are de-listed
from the New York Stock Exchange; or
13.2.17 CHANGE OF OWNERSHIP any Guarantor ceases to be wholly
owned (either legally and/or beneficially) by the
Borrower or (while it is the manager of a Vessel)
Northern Marine Management Ltd. ceases to be a wholly
owned (directly or indirectly) subsidiary of Stena AB;
or
13.2.18 ANALOGOUS EVENTS if any event which (in the reasonable
opinion of the Agent) is analogous to any of the events
set out in Clauses 13.2.4, 13.2.5 and/or 13.2.6 above
shall occur.
13.3 EVENT OF MANDATORY PREPAYMENT if any Vessel or any other vessel
which may from time to time be mortgaged to the Finance Parties
as security for the repayment of all or any part of the
Indebtedness is sold, destroyed, abandoned, confiscated,
forfeited, condemned as prize or becomes a Total Loss the
Borrower shall prepay such amount as is equal to:
B
(i) A x -
C
together with accrued interest and any Break Costs on the
amount being prepaid, where A = the Loan outstanding at the
relevant date; B = the Market Value of the relevant Vessel;
and C = the aggregate Market Values of the relevant Vessel
and of all remaining Vessels. For the purposes of this
Clause, the Market Value shall be determined by reference to
the then most recent valuations (if within three (3) months
of the relevant date) or (in all other circumstances) by a
further valuation carried out in accordance with Clause
11.2.3; and
(ii) any additional amount as may be required to ensure
that, after such application, the Loan (less any Cash
Collateral or Cash Equivalents) shall be less than
sixty per centum (60%) of the Market Value of the
remaining Vessels and any additional security provided
under Clause 11.2.3,
and any balance shall, subject to no Event of Default or
Potential Event of Default then being in existence, be
released to the Owner.
The Borrower's obligation to make such Mandatory Prepayment
shall fall due, in the case of a sale, on the date of
completion of such sale, and in the case of a Total Loss on
the earlier of (a) receipt of the insurance proceeds
relating thereto and (b) the date falling one hundred and
eighty (180) days after such Total Loss.
For the avoidance of doubt any such sale and release or the
Total Loss of a Vessel and the resulting mandatory
prepayment in accordance with the terms of this Clause 13.3
will not constitute a Credit Event Upon Merger under the
Master Agreements.
14 SET-OFF, LIEN AND APPLICATION
14.1 SET-OFF The Borrower irrevocably authorises the Finance Parties
at any time while an Event of Default is in existence to set off
without notice any liability of any of the Borrower to any of
Finance Parties (whether present or future, actual or contingent,
and irrespective of the branch or office, currency or place of
payment) against any credit balance from time to time standing on
any account of any of the Borrower (whether current or otherwise
and whether or not subject to notice) with any branch of the
Finance Parties in or towards satisfaction of the Indebtedness
and, in the name of that Finance Party, to do all acts
(including, without limitation, converting or exchanging any
currency) and execute all documents which may be required to
effect such application.
14.2 APPLICATION Save as otherwise provided by the Security Documents
or the Quiet Enjoyment Agreements, the Borrower irrevocably
authorises the Agent to apply all sums which the Agent may
receive arising under or in connection with any of the Security
Documents executed by the Borrower in or towards satisfaction, or
by way of retention on account, of the Indebtedness, in such
manner as the Agent may determine.
14.3 MASTER AGREEMENT RIGHTS The rights conferred on the Agent by this
Clause shall be in addition to, and without prejudice to or
limitation of, the rights of netting and set off conferred on the
Swap Providers by the Master Agreements. The Borrower
acknowledges that the Swap Providers shall be under no obligation
to make any payment to the Borrower under or pursuant to the
Master Agreements if, at the time that payment becomes due, there
shall have occurred an Event of Default or Potential Event of
Default, or an Event of Default or Termination Event (as those
terms are respectively defined in the Master Agreements), but
shall pay any such sums (and are hereby authorised to make such
payments) to the Agent on behalf of the Borrower to be applied in
accordance with Clause 14.2, with any balance thereafter to be
paid to the Borrower or as it may direct.
15 ASSIGNMENT AND SUB-PARTICIPATION
15.1 RIGHT TO ASSIGN Each of the Banks may assign or transfer any of
its rights and/or obligations under or pursuant to this Agreement
to any other branch of that Bank or to another Bank or an
Affiliate of another Bank or, subject to the approval of the
Borrower which shall not be unreasonably withheld or delayed and
which shall be deemed given after five (5) Business Days if no
response is received by the Agent, to any other bank or financial
institution, and may grant sub-participations in all or any part
of its Commitment PROVIDED ALWAYS that no consent of the Borrower
shall be required for any transfer or assignment during the
continuance of an Event of Default.
15.2 BORROWER'S CO-OPERATION The Borrower will co-operate fully with
the Banks in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such
documents as the Banks may require in connection therewith;
irrevocably authorises the Agent to sign any Transfer Certificate
on its behalf; and irrevocably authorises the Agent and the Banks
(subject to receipt of an appropriate confidentiality undertaking
from the proposed recipient of the information) 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 or the Security Documents which the Agent or
the Bank may in its discretion consider necessary or desirable.
15.3 RIGHTS OF ASSIGNEE Any assignee or transferee of a Bank shall
(unless limited by the express terms of the assignment or
transfer) take the full benefit of every provision of the
Security Documents benefitting that Bank.
15.4 TRANSFER CERTIFICATES If any Bank wishes to transfer any of its
rights and/or 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:-
15.4.1 to the extent that that Bank seeks to transfer its
rights and/or obligations, the Borrower (on the one
hand) and the Bank in question (on the other) shall be
released from all further obligations towards the
other(s);
15.4.2 the Borrower (on the one hand) and the Transferee (on
the other) shall assume obligations towards the
other(s) identical to those released pursuant to Clause
15.4.1;
15.4.3 the Agent, each of the Banks 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 Bank; and
15.4.4 the Transferee shall pay to the Agent for its own
account a transfer fee of two thousand Dollars
($2,000).
Each Bank irrevocably authorises the Agent to sign on
its behalf any Transfer Certificate relating to the
transfer of any of the rights and/or obligations of any
other Bank.
15.5 COSTS RESULTING FROM CHANGE OF BANK OR FACILITY OFFICE
If:
(a) a Bank assigns or transfers any of its rights and
obligations hereunder or changes its facility office;
and
(b) as a result of circumstances existing at the date the
assignment, transfer or change occurs, the Borrower
would be obliged to pay an additional or increased cost
under this Agreement.
then, unless the assignment, transfer or change is made by a Bank
to mitigate any circumstance giving rise to the additional or
increased cost and/or cancelled by reason of illegality, the
Borrower need only pay that additional or increased cost to the
same extent that it would have been obliged to if no assignment,
transfer or change had occurred.
15.6 SECURITY DOCUMENTS
Unless otherwise expressly provided in any Security Document or
otherwise expressly agreed between a Bank and any proposed
Transferee and notified by that Bank to the Agent on or before
the relevant Transfer Date, there shall automatically be assigned
to the Transferee with any transfer of a Bank's rights and/or
obligations under or pursuant to this Agreement the rights of
that Bank under or pursuant to the Security Documents (other than
this Agreement) which relate to the portion of the Bank's rights
and/or obligations transferred by the relevant Transfer
Certificate.
16 PAYMENTS, MANDATORY PREPAYMENT, RESERVE REQUIREMENTS AND ILLEGALITY
16.1 PAYMENTS All amounts payable by the Borrower under or pursuant to
any of the Security Documents shall be paid to such accounts at
such banks as the Agent may from time to time direct to the
Borrower, and (unless payable in any other Currency of Account)
shall be paid in Dollars in same day funds (or such funds as are
required by the authorities in the United States of America for
settlement of international payments for immediate value).
Payments shall be deemed to have been received by the Agent on
the date on which the Agent receives authenticated advice of
receipt, unless that advice is received by the Agent on a day
other than a Business Day or at a time of day (whether on a
Business Day or not) when the Agent in its discretion considers
that it is impossible or impracticable for the Agent to utilise
the amount received for value that same day, in which event the
payment in question shall be deemed to have been received by the
Agent on the Business Day next following the date of receipt of
advice by the Agent.
16.2 NO DEDUCTIONS OR WITHHOLDINGS All payments (whether of principal
or interest or otherwise) to be made by the Borrower pursuant to
the Security Documents shall, subject only to Clause 16.3, 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.
16.3 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 Agent and the Finance Parties
receive a net sum equal to the sum which they would have received
had no deduction or withholding been made.
16.4 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 pursuant to any of the Security Documents, 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 days after making that
payment, deliver to the Agent an original receipt issued by the
relevant authority, or other evidence acceptable to the Agent
acting reasonably, evidencing the payment to that authority of
all amounts required to be deducted or withheld.
16.5 ADJUSTMENT OF DUE DATES If any payment or transfer of funds to be
made under any of the Security Documents, other than a payment of
interest on the Loan or a payment pursuant to the Master
Agreements, 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.
16.6 CHANGE IN LAW If, by reason of the introduction of any law, or
any change in any law, or the interpretation or administration of
any law, or in compliance with any request or requirement from
any central bank or any fiscal, monetary or other authority:-
16.6.1 any Bank or the Agent (or the holding company of any
Bank or the Agent) shall be subject to any Tax (other
than Tax on its overall net income) with respect to
payments of all or any part of the Indebtedness; or
16.6.2 the basis of Taxation of payments to any Bank or to the
Agent in respect of all or any part of the Indebtedness
shall be changed save where a deduction or withholding
for or on account of Tax from a payment under a
Security Document is required by law to be made by the
Borrower; or
16.6.3 any reserve requirements shall be imposed, modified or
deemed applicable against assets held by or deposits in
or for the account of or loans by any branch of any
Bank except to the extent included in the Mandatory
Cost; or
16.6.4 the manner in which any Finance Party allocates capital
resources to its obligations under this Agreement or
any ratio (whether cash, capital adequacy, liquidity or
otherwise) which any Finance Party is required or
requested to maintain shall be affected; or
16.6.5 there is imposed on any Finance Party (or on the
holding company of any Finance Party) any other
condition in relation to the Indebtedness or the
Security Documents;
and the result of any of the above shall be to increase the cost
to any Bank (or to the holding company of any Bank) of that Bank
making or maintaining its Commitment or to cause any 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
unless such an increase of cost is attributable to the wilful
breach by any Bank or its Affiliate of any law or regulation, or
is compensated for by any other provision hereunder or would have
been compensated for under another provision hereunder but was
not compensated solely because an exception contained therein;
the Bank affected shall notify the Agent and the Borrower shall
from time to time pay to the Agent on demand for the account of
the Bank affected the amount which shall compensate that Bank or
the Agent (or the relevant holding company) for such additional
cost or reduced return. A certificate signed by an authorised
signatory of the Finance Party affected setting out the amount of
that payment and the basis of its calculation shall be submitted
to the Borrower and shall be conclusive evidence of such amount
save for manifest error or on any question of law.
16.7 ILLEGALITY Notwithstanding anything contained in the Security
Documents, the obligations of the Banks to advance or maintain
the Loan shall terminate in the event that a change in any law or
in the interpretation of any law by any authority charged with
its administration shall make it unlawful for that Bank to
advance or maintain its Commitment. In that event the Bank
affected shall notify the Agent and the Agent shall, by written
notice to the Borrower, declare that Bank's obligations to be
immediately terminated. If all or any part of the Loan shall have
been advanced by the Banks to the Borrower, the Indebtedness
(including all accrued interest) shall be prepaid within thirty
days from the date of such notice. Clause 5.3 shall apply to that
prepayment if it is made on a day other than the last day of an
Interest Period.
16.8 If (i) at or about 11 am on the second Business Day prior to the
beginning of an Interest Period LIBOR is not available and none
or only one of the Banks supplies a rate to the Agent to
determine LIBOR for the relevant Interest Period or (2) if at or
about 11 am on the second Business Day prior to the beginning of
an Interest Period the Agent receives notification from at least
two Banks (whose participation in the Loan exceeds fifty per cent
of the Loan) that the cost to them of obtaining matching deposits
in the relevant interbank market would be in excess of LIBOR,
16.8.1 the Agent shall give notice to the Borrower of the
occurrence of such event; and
16.8.2 the Agent shall as soon as reasonably practicable
certify to the Borrower in writing the effective cost
to the Banks of maintaining the Loan for such further
period as shall be selected by the Banks and the rate
of interest payable by the Borrower for that period;
or, if that is not acceptable to the Borrower,
16.8.3 the Agent on behalf of the Banks will negotiate with
the Borrower in good faith with a view to modifying
this Agreement to provide a substitute basis for the
Loan which is financially a substantial equivalent to
the basis provided for in this Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 16.8.1, the Borrower and the Agent fail to agree in
writing on a substitute basis for the Loan, the Borrower will
immediately prepay the Indebtedness. Clause 5.3 shall apply to
that prepayment if it is made on a day other than the last day of
an Interest Period.
16.9 16.9.1 (a) Each Finance Party shall, in consultation
with the Borrower take all reasonable steps
to mitigate any circumstances which would
arise and which would result in any amount
becoming payable under or pursuant to, or
cancelled pursuant to, any of Clause 16.3,
Clause 16.6, Clause 16.7 or Clause 16.8
including (but not limited to) transferring
its rights and obligations under the Security
Documents.
(b) Paragraph (a) above does not in any way limit
the obligations of the Borrower or Guarantors
under the Security Documents.
16.9.2 (a) The Borrower shall indemnify each Finance
Party for all costs and expenses reasonably
incurred by that Finance Party as a result of
steps taken by it under Clause 16.9.1.
(b) A Finance Party is not obliged to take any
steps under Clause 16.9.1 if in the opinion
of that Finance Party (acting reasonably), to
do so might be prejudicial to it.
17 COMMUNICATIONS
17.1 METHOD Any Communication may be given, delivered, made or served
(as the case may be) under or in relation to this Agreement by
letter or fax and shall be in the English language and sent
addressed:-
17.1.1 in the case of the Banks or the Agent to the Agent in
accordance with the details set out in Schedule 2; and
17.1.2 in the case of the Swap Providers to the relevant Swap
Provider in accordance with the details set out in
Schedule 2;
17.1.3 in the case of the Borrower to the Communications
Address;
or to such other address or fax number as the Banks, the Swap
Providers, the Agent or the Borrower may designate for themselves
by written notice to the others.
17.2 TIMING A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by, the
Borrower:-
17.2.1 in the case of a fax when the sender receives one or
more transmission reports showing the whole of the
Communication to have been transmitted to the correct
fax number; or
17.2.2 if delivered to an officer of any of the Borrower or
left at the Communications Address at the time of
delivery or leaving.
A Communication shall only be deemed to have been duly given,
delivered, made or served to or on, and received by, the Banks,
or the Agent on actual receipt of the whole of that Communication
by the Agent and by a Swap Provider on actual receipt of the
whole of that Communication by that Swap Provider.
17.3 INDEMNITY The Borrower shall indemnify the Finance Parties
against any cost, claim, liability, loss or expense (including
legal fees and any Value Added Tax or any similar or replacement
tax (if applicable)) which the Finance Parties may sustain or
incur as a consequence of any Communication sent by or on behalf
of the Borrower by fax not being received by its intended
recipient, or being received incomplete, or by reason of any
Communication purportedly having been sent by or on behalf of the
Borrower having been sent fraudulently.
18 GENERAL INDEMNITIES
18.1 CURRENCY In the event of a Finance Party receiving or recovering
any amount payable under any of the Security Documents in a
currency other than the Currency of Account, and if the amount
received or recovered is insufficient when converted into the
Currency of Account at the date of receipt to satisfy in full the
amount due, the Borrower shall, on the Agent's written demand,
pay to the Agent such further amount in the Currency of Account
as is sufficient to satisfy in full the amount due and that
further amount shall be due to the Agent on behalf of the Finance
Parties as a separate debt under this Agreement.
18.2 COSTS AND EXPENSES The Borrower will, within fourteen days of the
Agent's written demand, reimburse the Agent (on behalf of the
Finance Parties) for all costs and expenses (including Value
Added Tax or any similar or replacement tax if applicable) of and
incidental to:-
18.2.1 the negotiation, preparation, execution and
registration of the Security Documents (whether or not
any of the Security Documents are actually executed or
registered and whether or not all or any part of the
Loan is advanced);
18.2.2 any amendments, addenda or supplements to any of the
Security Documents (whether or not completed);
18.2.3 any other documents which may at any time be required
by any Finance Party to give effect to any of the
Security Documents or which any Finance Party is
entitled to call for or obtain pursuant to any of the
Security Documents; and
18.2.4 the exercise of the rights, powers, discretions and
remedies of the Finance Parties under or pursuant to
the Security Documents.
18.3 EVENTS OF DEFAULT The Borrower shall indemnify the Finance
Parties from time to time on demand against all losses and costs
incurred or sustained by any Finance Party as a consequence of
any Event of Default, including (without limitation) any Break
Costs.
18.4 FUNDING COSTS The Borrower shall indemnify the Finance Parties
from time to time on demand against all losses and costs incurred
or sustained by any Finance Party if, for any reason, any Drawing
is not advanced to the Borrower after the relevant Drawdown
Notice has been given to the Agent, or is advanced on a date
other than that requested in the Drawdown Notice (unless, in
either case, as a result of any default by the Finance Parties)
including (without limitation) any Break Costs.
18.5 PROTECTION AND ENFORCEMENT The Borrower shall indemnify the
Finance Parties from time to time on demand against all losses,
costs and liabilities which any Finance Party may from time to
time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on
the Finance Parties by the Security Documents or in or about the
exercise or purported exercise by the Finance Parties of any of
the rights, powers, discretions or remedies vested in them under
or arising out of the Security Documents, including (without
limitation) any losses, costs and liabilities which any Finance
Party may from time to time sustain, incur or become liable for
by reason of the Finance Party being mortgagees of any Vessel
and/or a lender to the Borrower, or by reason of any Finance
Party being deemed by any court or authority to be an operator or
controller, or in any way concerned in the operation or control,
of any Vessel other than if caused by its gross negligence or
wilful misconduct.
18.6 LIABILITIES OF FINANCE PARTIES The Borrower will from time to
time reimburse the Finance Parties on demand for all sums which
any Finance Party may pay or
become actually or contingently liable for on account of the
Borrower or in connection with any Vessel (whether alone or
jointly or jointly and severally with any other person) including
(without limitation) all sums which any Finance Party may pay or
guarantees which any Finance Party may give in respect of the
Insurances, any expenses incurred by any Finance Party in
connection with the maintenance or repair of any Vessel or in
discharging any lien, bond or other claim relating in any way to
any Vessel, and any sums which any Finance Party may pay or
guarantees which they may give to procure the release of any
Vessel from arrest or detention.
18.7 TAXES The Borrower shall pay all Taxes (other than Taxes on the
overall net income of any of the Finance Parties) to which any of
the Security Documents may be at any time subject and shall
indemnify the Finance Parties on demand against all liabilities,
costs, claims and expenses resulting from any omission to pay or
delay in paying any such Taxes.
19 MISCELLANEOUS
19.1 WAIVERS No failure or delay on the part of the Finance Party in
exercising any right, power, discretion or remedy under or
pursuant to any of the Security Documents, nor any actual or
alleged course of dealing between the Finance Parties and the
Borrower, shall operate as a waiver of, or acquiescence in, any
default on the part of any Security Party, unless expressly
agreed to do so in writing by the Agent, nor shall any single or
partial exercise by a Finance Party of any right, power,
discretion or remedy preclude any other or further exercise of
that right, power, discretion or remedy, or the exercise by that
Finance Party of any other right, power, discretion or remedy.
19.2 NO ORAL VARIATIONS No variation or amendment of any of the
Security Documents shall be valid unless in writing and signed on
behalf of the Banks and the Agent.
19.3 SEVERABILITY If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect
that provision shall be severed from the remainder and the
validity, legality and enforceability of the remaining provisions
shall not be affected or impaired in any way.
19.4 SUCCESSORS ETC. The Security Documents shall be binding on the
Security Parties and on their successors and permitted
transferees and assignees, and shall inure to the benefit of the
Finance Parties and their respective successors, transferees and
assignees. The Borrower may not assign nor transfer any of its
rights under or pursuant to any of the Security Documents without
the prior written consent of the Agent.
19.5 FURTHER ASSURANCE If any provision of the Security Documents
shall be invalid or unenforceable in whole or in part by reason
of any present or future law or any decision of any court, or if
the documents at any time held by the Finance Parties are
considered by the Finance Parties 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 Finance Parties are necessary to provide adequate security
for the repayment of the Indebtedness.
19.6 OTHER ARRANGEMENTS The Finance Parties may, without prejudice to
their rights under or pursuant to the Security Documents, at any
time and from time to time, on such terms and conditions as they
may in their discretion determine, and without notice to the
Borrower, grant time or other indulgence to, or compound with,
any other person liable (actually or contingently) to the Finance
Parties in respect of all or any part of the Indebtedness, and
may release or renew negotiable instruments and take and release
securities and hold funds on realisation or suspense account
without affecting the liabilities of the Borrower or the rights
of the Finance Parties under or pursuant to the Security
Documents.
19.7 ADVISERS The Borrower irrevocably authorises the Agent, at any
time and from time to time during the Facility Period, to consult
insurance advisers on any matters relating to the Insurances,
including, without limitation, the collection of insurance
claims, and from time to time to consult or retain advisers or
consultants to monitor or advise on any other claims relating to
the Vessels. The Borrower will provide such advisers and
consultants with all information and documents which they may
from time to time require and will reimburse the Agent on demand
for all costs and expenses incurred by the Agent in connection
with the consultation or retention of such advisers or
consultants.
19.8 DELEGATION The Finance Parties may at any time and from time to
time delegate to any person any of their rights, powers,
discretions and remedies pursuant to the Security Documents on
such terms as they may consider appropriate (including the power
to sub-delegate).
19.9 RIGHTS ETC. CUMULATIVE Every right, power, discretion and remedy
conferred on the Finance Parties under or pursuant to the
Security Documents shall be cumulative and in addition to every
other right, power, discretion or remedy to which they may at any
time be entitled by law or in equity. The Finance Parties may
exercise each of their rights, powers, discretions and remedies
as often and in such order as they deem appropriate. The exercise
or the beginning of the exercise of any right, power, discretion
or remedy shall not be interpreted as a waiver of the right to
exercise that or any other right, power, discretion or remedy
either simultaneously or subsequently.
19.10 NO ENQUIRY The Finance Parties shall not be concerned to enquire
into the powers of the Security Parties or of any person
purporting to act on behalf of any of the Security Parties, even
if any of the Security Parties or any such person shall have
acted in excess of their powers or if their actions shall have
been irregular, defective or informal, whether or not any Finance
Party had notice thereof.
19.11 CONTINUING SECURITY The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall
have been repaid in full and Finance Parties shall not be under
any further actual or contingent liability to any third party in
relation to the Vessels, the Insurances, Earnings or Requisition
Compensation or any other matter referred to in the Security
Documents.
19.12 SECURITY CUMULATIVE The security constituted by the Security
Documents shall be in addition to any other security now or in
the future held by the Finance Parties for or in respect of all
or any part of the Indebtedness, and shall not merge with or
prejudice or be prejudiced by any such security or any other
contractual or legal rights of the Finance Parties, nor affected
by any irregularity, defect or informality, or by any release,
exchange or variation of any such security. Section 93 of the Law
of Property ▇▇▇ ▇▇▇▇ and all provisions which the Agent considers
analogous thereto under the law of any other relevant
jurisdiction shall not apply to the security constituted by the
Security Documents.
19.13 NO LIABILITY None of the Finance Parties, nor any agent or
employee of any Finance Party, nor any receiver and/or manager
appointed by the Agent, shall be liable for any losses which may
be incurred in or about the exercise of any of the rights,
powers, discretions or remedies of the Finance Parties under or
pursuant to the Security Documents nor liable as mortgagee in
possession for any loss on realisation or for any neglect or
default of any nature for which a mortgagee in possession might
otherwise be liable other than if caused by its gross negligence
or wilful misconduct.
19.14 RESCISSION OF PAYMENTS ETC. Any discharge, release or
reassignment by the Finance Parties of any of the security
constituted by, or any of the obligations of any Security Party
contained in, any of the Security Documents shall be (and be
deemed always to have been) void if any act (including, without
limitation, any payment) as a result of which such discharge,
release or reassignment was given or made is subsequently wholly
or partially rescinded or avoided by operation of any law.
19.15 RELEASES If any Finance Party shall at any time release any party
from all or any part of any of the Security Documents, the
liability of any other party to the Security Documents shall not
be varied or diminished.
19.16 DISCRETIONS Unless otherwise expressly indicated, where any
Finance Party is stated in the Security Documents to have a
discretion and/or where the opinion of any Finance Party is
referred to and/or where the consent, agreement or approval of
any Finance Party is required for any course of action, or where
anything is required to be acceptable to any Finance Party, the
Finance Party shall have a sole, absolute and unfettered
discretion and/or may give or withhold their consent, agreement
or approval at their sole, absolute and unfettered discretion.
19.17 CERTIFICATES Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other
amount referred to in any of the Security Documents shall, save
for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that amount.
19.18 SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations
and warranties on the part of the Borrower contained in this
Agreement shall survive the execution of this Agreement and the
advance of the Loan.
19.19 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.
19.20 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 No term of this
Agreement is enforceable by a person who is not a party to it.
20 LAW AND JURISDICTION
20.1 GOVERNING LAW This Agreement shall in all respects be governed by
and interpreted in accordance with English law.
20.2 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.
20.3 ALTERNATIVE JURISDICTIONS Nothing contained in this Clause shall
limit the right of the Finance Parties to commence any
Proceedings against the Borrower in 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.
20.4 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, 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.
20.5 SERVICE OF PROCESS Without prejudice to the right of the Finance
Parties to use any other method of service permitted by law, the
Borrower irrevocably agrees that any writ, notice, judgment or
other legal process shall be sufficiently served on it if
addressed to it and left at or sent by post to the Address for
Service, and in that event shall be conclusively deemed to have
been served at the time of leaving or, if posted, at 9.00 a.m. on
the Business Day after posting by prepaid first class post.
20.6 REPLACEMENT AGENT FOR SERVICE If any person appointed as process
agent is unable for any reason to act as agent for service of
process, the Borrower (on behalf of the relevant Security
Parties) must immediately (and in any event within ten days of
such event taking place) appoint another agent on terms
acceptable to the Agent. Failing this, the Agent may appoint
another agent for this purpose.
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
SCHEDULE 1
THE GUARANTORS AND THE VESSELS
----------------------------------------------------------------------------------------------------------------------------------
NAME OF COUNTRY OF SELLER REGISTERED NAME OF VESSEL FLAG ATTRIBUTABLE
GUARANTOR INCORPORATION OFFICE VESSEL PERCENTAGE
----------------------------------------------------------------------------------------------------------------------------------
Vision Ltd. Bermuda CM V-MAX I Clarendon House "Stena Vision" Bermuda 28.2%
Limited ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
Victory Ltd. Bermuda CM V-▇▇▇ ▇▇ Clarendon House "Stena Victory" Bermuda 28.2%
Limited ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
Companion Ltd. Bermuda Panisland Ltd. Clarendon House "Stena Companion" Bermuda 11.5%
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
Compatriot Ltd. Bermuda Panocean Ltd. Clarendon House "Stena Compatriot" Bermuda 11.5%
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
Concord Ltd. Bermuda Oceanspirit Ltd. Clarendon House "Stena Concord" Bermuda 10.3%
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
Consul Ltd. Bermuda Oceansong Ltd. Clarendon House "Stena Consul" Bermuda 10.3%
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 2
THE BANKS AND THE COMMITMENTS
THE BANKS THE COMMITMENTS (IN $)
Fortis Bank (Nederland) N.V. 67,500,000
For credit matters:
▇▇▇▇▇▇ ▇▇▇'▇ ▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Attn: Global Shipping Group
Fax: ▇▇▇ ▇▇ ▇▇▇▇▇▇
For administrative matters:
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇-▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attn: Global Shipping Group
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
HSBC Bank plc 67,500,000
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: Process Manager, Loans Administration
Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
SCHEDULE 3
CALCULATION OF THE MANDATORY COST
(a) The Mandatory Cost for the Loan for each Interest Period is the rate
determined by the Agent to be equal to the arithmetic mean (rounded
upwards, if necessary, to four decimal places) of the respective rates
notified to it by each of the Banks and calculated in accordance with the
following formulae:
F x 0.01 % per annum = Mandatory Cost
--------
300
where on the day of application of the formula:
F is the charge payable by the Bank to the Financial Services
Authority under paragraph 2.02 or 2.03 (as appropriate) of
the Fees Regulations or the equivalent provisions in any
replacement regulations (with, for this purpose, the figure
for the minimum amount in paragraph 2.02b or such equivalent
provision deemed to be zero), expressed in pounds per
(pound)1 million of the fee base of the Bank.
(b) For the purpose of this Schedule:
(ii) "FEE BASE" has the meaning given to it in the Fees Regulations;
(iii) "FEES REGULATIONS" means:-
(A) up to and including 31 March 2002, the Banking Supervision
(Fees) Regulations 2001; and
(B) after that date any regulations governing the payment of
fees for banking supervision;
(iv) "RELEVANT PERIOD" in relation to each Interest Period, means:-
(A) if it is three months or less, that Interest Period; or
(B) if it is more than three months, three months.
(d) (i) The formula is applied on the first day of each relevant period
comprised in the relevant Interest Period.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
(e) If a Bank does not supply a rate to the Agent when requested to do so, the
applicable Mandatory Cost shall be determined on the basis of the rate(s)
supplied by the remaining Banks.
(f) If a change in circumstances has rendered, or will render, the formula
inappropriate, the Agent shall notify the Borrower of the manner in which
the Mandatory Cost will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the absence of manifest
error, be binding on the Borrower.
SIGNED by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
for and on behalf )
of ARLINGTON TANKERS LTD. ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
pursuant to a power of attorney )
dated 1 November 2004 )
in the presence of:- )
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇ )
duly authorised for and on behalf ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
of FORTIS BANK (NEDERLAND) N.V. ) Attorney in fact
(as Arranger, Bank and Swap Provider) )
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇ )
duly authorised for and on behalf ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
of FORTIS BANK (NEDERLAND) N.V. ) Attorney in fact
(as Agent and security trustee) )
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ )
duly authorised for and on behalf ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
of HSBC BANK PLC )
(as Arranger, Bank and Swap Provider) )
APPENDIX A
FORM OF DRAWDOWN NOTICE
To: Fortis Bank (Nederland) N.V.
From: Arlington Tankers Ltd.
2004
Dear Sirs,
DRAWDOWN NOTICE
We refer to the Loan Agreement dated 2004 made between, amongst
others, ourselves and yourselves ("THE AGREEMENT").
Words and phrases defined in the Agreement have the same meaning when used
in this Drawdown Notice.
Pursuant to Clause 2.3 of the Agreement, we irrevocably request that you
advance a Drawing of [ ] to us on 2004, which is a Business
Day, by paying the amount of the Drawing to [ ].
We warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date of this Drawdown Notice and will
be true and correct on 2004; that no Event of Default nor Potential Event of
Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Drawing requested
in this Drawdown Notice.
[We select the period of [ ] months as the first Interest Period].
Yours faithfully
.......................
For and on behalf of
ARLINGTON TANKERS LTD.
APPENDIX B
FORM OF TRANSFER CERTIFICATE
TRANSFER CERTIFICATE
To: Fortis Bank (Nederland) N.V.
This transfer certificate relates to a secured loan facility agreement (as from
time to time amended, varied, supplemented or novated "THE LOAN AGREEMENT")
dated 2004, on the terms and subject to the conditions of which a secured loan
facility of up to $135,000,000 was made available to Arlington Tankers Ltd. by a
syndicate of banks on whose behalf you act as agent and security trustee.
1 Terms defined in the Loan Agreement shall, unless otherwise expressly
indicated, have the same meaning when used in this certificate. The terms
"TRANSFEROR" and "TRANSFEREE" are defined in the schedule to this
certificate.
2 The Transferor:-
2.1 confirms that the details in the Schedule under the heading
"TRANSFEROR'S COMMITMENT" accurately summarise its Commitment; and
2.2 requests the Transferee to accept by way of novation the transfer to
the Transferee of the amount of the Transferor's Commitment specified
in the Schedule by counter-signing and delivering this certificate to
the Agent at its address for Communications specified in the Loan
Agreement.
3 The Transferee requests the Agent to accept this certificate as being
delivered to the Agent pursuant to and for the purposes of clause [ ] of
the Loan Agreement so as to take effect in accordance with the terms of
that clause on the Transfer Date specified in the Schedule.
4 The Agent (on its own behalf and on behalf of the Borrower and each of the
Banks other than the Transferor) confirms its acceptance of this
certificate for the purposes of clause [ ] of the Loan Agreement.
5 The Transferee confirms that:-
5.1 it has received a copy of the Loan Agreement together with all other
information which it has required in connection with this transaction;
5.2 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to check or enquire on its behalf
into the legality, validity, effectiveness, adequacy, accuracy or
completeness of any such information; and
5.3 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to keep under review on its
behalf the financial condition, creditworthiness, condition, affairs,
status or nature of any of the Security Parties.
6 Execution of this certificate by the Transferee constitutes its
representation to the Transferor and to all other parties to the Loan
Agreement that it has the power to become a party to the Loan Agreement as
a Bank on the terms of the Loan Agreement and has taken all steps to
authorise execution and delivery of this certificate.
7 The Transferee undertakes with the Transferor and each of the other parties
to the Loan Agreement that it will perform in accordance with their terms
all those obligations which by the terms of the Loan Agreement will be
assumed by it after delivery of this certificate to the Agent and the
satisfaction of any conditions subject to which this certificate is
expressed to take effect.
8 The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any of the Security Documents or any document
relating to any of the Security Documents, and assumes no responsibility
for the financial condition of any of the Security Parties or for the
performance and observance by the Security Parties of any of their
obligations under any of the Security Documents or any document relating to
any of the Security Documents and any conditions and warranties implied by
law are expressly excluded.
9 The Transferee acknowledges that nothing in this certificate or in the Loan
Agreement shall oblige the Transferor to:-
9.1 accept a re-transfer from the Transferee of the whole or any part of
the rights, benefits and/or obligations transferred pursuant to this
certificate; or
9.2 support any losses directly or indirectly sustained or incurred by the
Transferee for any reason including, without limitation, the
non-performance by any party to
any of the Security Documents of any obligations under any of the
Security Documents.
10 The address and fax number of the Transferee for the purposes of clause [ ]
of the Loan Agreement are set out in the Schedule.
11 This certificate may be executed in any number of counterparts each of
which shall be original but which shall together constitute the same
instrument.
12 This certificate shall be governed by and interpreted in accordance with
English law.
THE SCHEDULE
1 TRANSFEROR:
2 TRANSFEREE:
3 TRANSFER DATE (not earlier that the fifth Business Day after the date of
delivery of the Transfer Certificate to the Agent):
4 TRANSFEROR'S COMMITMENT:
5 AMOUNT TRANSFERRED:
6 Transferee's address and fax number for the purposes of clause 10.20 of the
Loan Agreement:
[NAME OF TRANSFEROR] [NAME OF TRANSFEREE]
By: By:
Date: Date:
FORTIS BANK (NEDERLAND) N.V. as Agent
for and on behalf of itself, the Borrower and each of the Banks (other than the
Transferor)
By:
Date: