REVOLVING CREDIT FACILITY
UP TO
USD 125,000,000
SEAWAY (UK) LIMITED
AS BORROWER
▇▇▇▇▇ COMEX SEAWAY S.A.
AS GUARANTOR
DEN NORSKE BANK ASA
AND
MIDLAND BANK PLC
AS BANKS
MIDLAND BANK PLC
AS FACILITY AGENT
DEN NORSKE BANK ASA
AS SECURITY AGENT
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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ANS - Advokatfirma MNA
▇.▇.▇▇▇ 1958 Vika, 0125 Oslo
Tel.: (▇▇▇) ▇▇ ▇▇ ▇▇ ▇▇ Fax.: (▇▇▇) ▇▇ ▇▇ ▇▇ ▇▇
1. FACILITY AND PURPOSE................................................6
2. DEFINITIONS.........................................................6
3. CONDITIONS PRECEDENT...............................................11
3.1 CONDITIONS..................................................11
3.2 CERTIFIED COPIES............................................12
3.3 NO EVENT OF DEFAULT.........................................13
3.4 WAIVERS.....................................................13
4. AVAILABILITY.......................................................13
4.1 NOTICE TO THE FACILITY AGENT................................13
4.2 MANNER OF PAYMENT...........................................13
4.3 INDEMNITY...................................................13
4.4 SEVERALITY OF OBLIGATIONS...................................13
5. REPRESENTATION AND WARRANTIES......................................14
6. SECURITY - NEGATIVE PLEDGE.........................................15
6.1 SECURITY....................................................15
6.2 SET-OFF.....................................................15
6.3 NEGATIVE PLEDGE.............................................15
7. CURRENCIES.........................................................15
7.1 NOMINATION OF CURRENCY......................................15
7.2 CALCULATION OF CURRENCY AMOUNT..............................16
7.3 RENEWALS....................................................16
7.4 UNAVAILABILITY OF CURRENCY..................................16
7.5 EXTRA COST..................................................16
8. INTEREST...........................................................17
8.1 INTEREST RATE...............................................17
8.2 INTEREST PERIOD.............................................17
8.2.1 ABSENCE OF NOMINATION...........................17
8.2.2 INSTALMENTS.....................................17
8.2.3 BANKING DAY.....................................17
8.2.4 ONE MONTH INTEREST PERIODS......................17
8.2.5 NUMBER OF ADVANCES..............................17
8.3 INTEREST CALCULATION........................................17
8.4 DEFAULT INTEREST............................................18
8.5 NO LIBOR QUOTATION..........................................18
9. COMMITMENT REDUCTION/PREPAYMENT/
CANCELLATION.......................................................18
9.1 REDUCTION...................................................18
9.2 CANCELLATION................................................18
9.3 REBORROWING.................................................18
9.4 PREPAYMENT UPON TOTAL LOSS..................................18
10. COVENANTS..........................................................19
10.1 GENERAL COVENANTS...........................................19
10.1.1 INFORMATION.....................................19
10.1.2 FINANCIAL INFORMATION...........................19
10.1.3 INSURANCES......................................20
10.1.4 MORTGAGEE INTEREST..............................20
10.1.5 CERTIFICATE OF INSURANCES.......................20
10.1.6 NOTIFICATION....................................20
10.1.7 CLASS...........................................20
10.1.8 REPAIRS AND ALTERATION OF THE VESSELS...........21
10.1.9 FLAG............................................21
10.1.10 MANAGEMENT......................................21
10.1.11 SALE OF VESSEL..................................21
10.1.12 EMPLOYMENT OF VESSELS...........................21
10.1.13 BANK ACCOUNTS...................................21
10.1.14 NO FURTHER ENCUMBRANCES.........................21
10.1.15 MERGER OR DEMERGER..............................21
10.1.16 CORPORATE DOCUMENTS.............................21
10.1.17 LAWFUL CONDUCT..................................21
10.1.18 PUBLIC LISTING..................................21
10.2 FINANCIAL COVENANTS ........................................22
10.2.1 CERTIFICATE OF COMPLIANCE.......................22
10.2.2 CONSOLIDATED TANGIBLE NET WORTH.................22
10.2.3 CONSOLIDATED DEBT TO CONSOLIDATED TANGIBLE
NET WORTH RATIO.................................22
10.2.4 CONSOLIDATED DEBT TO EBITDA RATIO...............22
10.3 BANKS APPROVAL..............................................22
11. MINIMUM VALUE......................................................22
11.1 VALUATION...................................................22
11.2 MINIMUM VALUE REQUIREMENT...................................22
11.3 PREPAYMENT..................................................22
11.4 RELEASE OF ADDITIONAL SECURITY..............................22
12. EVENTS OF DEFAULT..................................................23
12.1 EVENTS......................................................23
12.1.1 OVERDUE PAYMENT.................................23
12.1.2 DEFAULT UNDER OTHER PROVISIONS..................23
12.1.3 INFORMATION FROM BORROWER.......................23
12.1.4 CROSS DEFAULT...................................23
12.1.5 LIENS AND MATERIAL LITIGATION...................23
12.1.6 LOSS OF PROPERTY................................24
12.1.7 LIQUIDATION.....................................24
12.1.8 ADMITTANCE OF NON-PAYMENT.......................24
12.1.9 TERMINATION OF BUSINESS.........................24
12.1.10 PERMITS.........................................24
12.1.11 OWNERSHIP OF THE BORROWER.......................24
12.2 LOAN ACCELERATION...........................................24
12.3 IMPOSSIBILITY OR ILLEGALITY.................................24
13. DEFAULT INDEMNITY..................................................25
13.1 DEFAULT INTEREST............................................25
13.2 INDEMNITY BY BORROWER.......................................25
13.3 INDEMNITY AMOUNT CERTIFICATE................................25
14. CHANGES IN CIRCUMSTANCES...........................................25
14.1 INCREASED COSTS.............................................25
14.2 ILLEGALITY..................................................26
14.3 UNAVAILABILITY OF FUNDS.....................................26
14.4 ALTERNATIVE FUNDING.........................................26
14.5 PREPAYMENT..................................................26
15. FEES, COSTS AND EXPENSES...........................................27
15.1 COMMITMENT COMMISSION.......................................27
15.2 UNDERWRITING FEE............................................27
15.3 COSTS.......................................................27
16. PAYMENTS...........................................................27
16.1 TAXES.......................................................27
16.2 GENERAL PREPAYMENT PROVISIONS...............................27
16.3 REFUND OBLIGATION...........................................28
17. AGENCY.............................................................28
17.1 AGENT'S AUTHORITY...........................................28
17.2 APPLICATION OF FUNDS........................................28
17.3 SHARING OF PAYMENT..........................................28
17.4 INFORMATION TO BANKS........................................29
17.5 INDEMNIFICATION OF AGENTS...................................29
17.6 DISCLAIMER OF LIABILITY.....................................29
17.7 INDIVIDUAL CREDIT RISK ASSESSMENT...........................29
17.8 AGENTS' OTHER BUSINESS WITH BORROWER........................29
18. ASSIGNMENT.........................................................29
18.1 PARENT & ▇▇▇▇▇▇▇▇...........................................29
18.2 BANK TO AFFILIATE...........................................29
18.3 BANK TO OTHER FINANCIAL INSTITUTIONS........................30
18.4 SUBSEQUENT PAYMENTS.........................................30
19. NOTICES AND CORRESPONDENCE.........................................30
20. CURRENCY INDEMNITY.................................................31
21. MISCELLANEOUS......................................................31
21.1 SEVERALITY OF PROVISIONS....................................31
21.2 CLAUSE HEADINGS.............................................31
22. GOVERNING LAW AND JURISDICTION.....................................31
SCHEDULE NO. Page
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1 LIST OF BANKS AND PARTICIPATIONS 34
2 DRAWDOWN NOTICE.. 35
3 NOMINATION NOTICE 36
4 FORM OF SHIP MORTGAGES 37
5 FORM OF INSURANCE ASSIGNMENT 102
6 FORM OF PARENT GUARANTEE/INTER COMPANY
GUARANTEE 106
7 SECURITY IN THE EARNINGS OF VESSELS 108
8 FORM OF CERTIFICATE OF COMPLIANCE 114
9 ASSOCIATED COST RATE 116
10 TECHNICAL MANAGEMENT AGREEMENT 118
11 CONTRACT INFORMATION
This Agreement is entered into on this 19th day of December 1997
BETWEEN:-
(1) SEAWAY (UK) LIMITED c/▇ ▇▇▇▇▇ COMEX SEAWAY M.S. LTD, Bucksburn House,
▇▇▇▇▇ Road, Bucksburn, UK - Aberdeen AB 2 9RQ, Scotland (the "BORROWER"),
a limited liability company incorporated under the laws of England.
(2) ▇▇▇▇▇ COMEX SEAWAY S.A., a limited liability company incorporated under
the laws of The Grand Duchy of Luxembourg, with the registered address ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ (the "PARENT") in its capacity as
Guarantor.
(3) THE BANKS AND FINANCIAL INSTITUTIONS whose names, addresses and
participations in the Loan are listed in Schedule 1 hereto (the "BANKS").
(4) MIDLAND BANK PLC ▇▇ - ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, England (the "FACILITY
AGENT").
and
(5) DEN NORSKE BANK ASA, ▇.▇.▇▇▇ 1171 Sentrum, N-0107 Oslo, Norway (the
"SECURITY AGENT")
WHEREAS:-
(A) The Borrower is a wholly owned indirect subsidiary of the Parent.
(B) The Borrower's sole purpose is borrowing money to finance the operation of
the SCS Group (as herein defined) or any member of the SCS Group and to
act as the founder for a pension fund.
(C) The Borrower on behalf of the SCS Group wishes to obtain from the Banks
financing assistance for the operations of the SCS Group as specified in
this Agreement.
(D) The Banks have agreed, pursuant to the terms and conditions set out
herein, to assist in the financing of the SCS Group's general corporate
purpose and operations including without limitation working capital and
capital expenditures.
NOW IT IS ▇▇▇▇▇▇ AGREED as follows:-
1. FACILITY AND PURPOSE
This Agreement sets out the terms and conditions upon which the Banks will
severally, in proportions as set out in Schedule 1 hereto, make available to the
Borrower a revolving multicurrency credit (the "FACILITY") in the amount of up
to USD 125,000,000 with the purpose of financing capital expenditures and
general corporate purposes of the SCS Group (as herein defined).
2. DEFINITIONS
In this Agreement the following terms and expressions shall have the meaning set
out below, always provided that where the context of this Agreement so allows
words importing the singular include the plural and vice versa:
"ACCOUNTS RECEIVABLE" means the aggregate amount due at any time to the SCS
Group.
"ADVANCE" means any amount advanced to the Borrower under the Facility.
"AGENT" means either of the Facility Agent and the Security Agent.
"APPLICABLE MARGIN" means a variable margin calculated by the Facility Agent
based upon the Parent's Consolidated Debt to EBITDA ratio ("D/EBITDA") as an
average of the immediately preceding four fiscal (4) quarters as follows:
D/EBITDA: APPLICABLE MARGIN PER ANNUM:
--------- ----------------------------
3 or greater 0,80%
2 or greater but less than 3 0,60%
1 or greater but less than 2 0,50%
less than 1 0,40%
The Applicable Margin shall be calculated by the Facility Agent on 28 February,
31 May, 31 August and 30 November each year (each a "MARGIN REVIEW DATE") for
the succeeding fiscal quarter and shall be the average of four consecutive
fiscal quarters, the most recent of which shall have ended on the previous
Margin Review Date.
The margin calculated as aforesaid shall be increased by 50% upon occurrence of
Change of Control, unless such Change of Control is certified by the Agents to
be acceptable to the Majority Banks in their sole discretion.
"ARTICLES OF ASSOCIATION" means in respect of a company the Articles of
Association, by- laws, Articles of Incorporation, Statutes, Certificate of Good
Standing and any other similar documents relevant to such body corporate under
the laws of the relevant country of incorporation.
"ASSIGNMENT ACCOUNTS" any account with the Facility Agent established pursuant
to the Assignment of Earnings in order to receive the assigned earnings of the
Vessels.
"ASSIGNMENT OF EARNINGS" means an assignment of the earnings of each of the
Vessels issued by the relevant Shipowning Company to the Security Agent in the
form set out in Schedule 7.
"ASSOCIATED COSTS RATE" means, in relation to any Advance or unpaid sum
denominated in GBP, the rate determined in accordance with Schedule 9.
"BANK ACCOUNTS" means the accounts referred to in Clause 10.1.13.
"BANKING DAY" means a day upon which banks and foreign exchange markets are open
for business in London, Oslo, New York and such other places contemplated for
the transactions required by this Agreement.
"CERTIFICATE OF COMPLIANCE" has the meaning ascribed thereto in Clause 10.2.1
and being in the form set out in Schedule 8.
"CHANGE OF CONTROL" means that ▇▇▇▇▇-▇▇▇▇▇▇▇ S.A. of Luxembourg ("SNSA") shall
cease, for any reason whatsoever, to own or control directly or indirectly,
shares of the Parent representing at least 30% of all votes capable of being
represented in any shareholders
meeting of the Parent or if any shareholder or group of shareholders acting in
concert outside SNSA at any time own or control, directly or indirectly, more of
the issued voting shares determined on a per vote basis of the Parent than those
being owned or controlled by SNSA.
"CONSOLIDATED TANGIBLE NET WORTH" means for the Parent and its Subsidiaries (on
a consolidated basis) at any time (a) the sum, to the extent shown on the
Parent's consolidated balance sheet, of (i) the amount of issued and outstanding
share capital, but less the cost of treasury shares, plus (ii) the amount of
surplus and retained earnings, less (b) intangible assets as determined in
accordance with US GAAP.
"CONSOLIDATED DEBT" ("DEBT") means for the Parent and its Subsidiaries (on a
consolidated basis) at any time, the aggregate value of (i) notes payable
(whether promissory notes or otherwise), plus (ii) long term debt (including
current portion of long term debt), plus (iii) capitalised lease obligations on
behalf of third parties and all contingent liabilities related to debt and
capital lease obligations which, according to US GAAP, are considered probable
and estimable, plus (iv) subordinated debt less (v) amount of debt for which
there is a restricted cash deposit which will repay all or part of such
financial debt obligation.
"DRAWDOWN DATE" means a date a portion of the Loan Commitment is made available
to the Borrower hereunder, such date always being a Banking Day, not to occur
later than the date falling one month prior to the Final Repayment Date.
"DRAWDOWN NOTICE" means a notice in the form set out in Schedule 1 hereto.
"DEED OF COVENANT" means a Deed of Covenant executed by the Borrower
substantially in the form set out in Schedule 4 hereto
"EARNINGS" means all freight, hire (including, but not limited to all payments
from any charterparty), compensation payable to the Borrower in the event of
requisition of any Vessel, remuneration for salvage and other services,
demurrage, retention moneys and all other moneys whatsoever due or to become due
to the Borrower in respect of the Vessels or otherwise.
"EBITDA" means the consolidated Earnings Before Interest, Taxes, Depreciation
and Amortization, at any time during the Facility Period as determined in
accordance with US GAAP.
"EUROCURRENCY" means each of the lawful currencies of the United States of
America ("USD"), United Kingdom ("GBP"), Norway ("NOK") and any other currency
always provided that such currency is generally available in the eurocurrency
market and in relation to other currencies than USD, freely convertible into
USD.
"EVENT OF DEFAULT" means each of the events and circumstances specified in
Clause 12.1
(Events of Default) below.
"FACILITY PERIOD" means the period from the date of this Agreement until all
amounts outstanding from the Borrower to the Agents and the Banks hereunder,
whether actual or contingent, have been repaid in full and the Banks are under
no further obligation to make Advances available under this Agreement.
"FINAL REPAYMENT DATE" means 28 February 2003.
"INTER COMPANY GUARANTEE" means an on demand guarantee for the full amount of
the facility substantially in the form as set out in Schedule 6 or an indemnity
being in form and substance satisfactory to the Agents, made by each of the
Shipowning Companies in favour of the Security Agent on behalf of the Banks.
"INTEREST PAYMENT DATE" means the last day of each Interest Period, and in
respect of any Interest Period exceeding 6 months, the date falling 6 months
after the commencement thereof and each date falling with six-monthly intervals
thereafter.
"INTEREST PERIOD" means a period, the duration of which is calculated in
accordance with the provisions of Clause 8 (Interest) hereof.
"LIBOR" means, in relation to any Advance or unpaid sum, the rate per annum
determined by the Facility Agent to be (i) the Screen Rate for the specified
period or (ii) (in the event that LIBOR cannot be determined by reference to the
Screen Rate) the rate per annum determined by the Facility Agent to be equal to
the arithmetic mean (rounded upwards, if not already such a multiple, to the
nearest whole multiple of the one-sixteenth of one per cent.) of the rates (as
notified to the Facility Agent) at which each of the Banks was offering to prime
banks in the London Interbank Market, deposits in the currency in which such
Advance or unpaid sum is denominated and for the specified period at or about
11.00 a.m. London time two Banking Days prior to the commencement of the
relevant Interest Period therefor and, for the purpose of this definition,
"SPECIFIED period" means the Interest Period of such Advance or, as the case may
be, the relevant period in respect of which LIBOR shall be determined in
relation to such unpaid sum.
"LOAN" means the aggregate principal amount outstanding hereunder at any time.
"LOAN COMMITMENT" means the maximum sum of USD 125,000,000.
"MAJORITY BANKS" means Banks accounting for more than 66% of the Loan
Commitment, or as the case may be, the Loan at any time.
"MANAGER" means the Technical Manager.
"MANAGEMENT AGREEMENT" means the Technical Management Agreement.
"MARKET VALUE" means the arithmetic means of valuations, made by two independent
ship brokers approved by the Agents, on the basis of a voluntary cash sale of
the Vessels between willing buyer and willing seller on "as is - where is"
terms, free of any employment obligations.
"MORTGAGE" means a first priority Ship Mortgage of USD 125,000,000 (together
with, in respect of M.V. SEAWAY OSPREY, M.V. SEAWAY HARRIER and M.V. SEAWAY
EAGLE, an additional amount of USD 12,500,000) registered on each Vessel in the
ships registry applicable to the relevant Vessel, and in respect of M.V. "SEAWAY
CONDOR" together with a Deed of Covenant, being substantially in the forms set
out in Schedule 4 hereto.
"NOMINATED CURRENCY" means USD or the Eurocurrency in which the Loan will be
made available to the Borrower pursuant to Clause 7 (Currencies) hereof, at any
time during the Facility Period.
"NOMINATION NOTICE" means a notice in the form set out in Schedule 3 hereto.
"OUTSTANDING INDEBTEDNESS" means all and any amount outstanding from the
Borrower to the Banks pursuant to this Agreement or any of the Security
Documents.
"PARENT GUARANTEE" means the guarantee substantially as set out in Schedule 6
hereto.
"PLAN" means the Norwegian Marine Insurance Plan of 1964.
"PRINCIPAL SUBSIDIARIES" means any member of the SCS Group having total assets
exceeding 10% of the consolidated assets of the SCS Group and/or having during
the last four quarters accounted for more than 10% of the consolidated turnover
of the SCS Group.
"REDUCTION DATES" means the date falling 36 months after the signing of this
Agreement and each of the dates falling at 6 months intervals thereafter up to
and including the Final Repayment Date.
"SCS GROUP" means the Parent and all Subsidiaries.
"SCREEN RATE" means the offered quotation appearing on page 3740 or 3750 of the
Telerate Screen (or such other page or service as may replace such pages on such
system for this purpose) which displays British Bankers Association Interest
Settlement Rates for deposits in the currency in which the relevant Advance or
unpaid sum is to be denominated at or about 11.00 a.m. London time two Banking
Days prior to the commencement of the relevant Interest Period therefor.
"SECURITY DOCUMENTS" means all or any documents and/or arrangements as may be
entered into from time to time pursuant to Clause 6 (Security) hereof, as
security for all or any of the obligations of the Borrower hereunder.
"SHIPOWNING COMPANIES" means SCS SHIPPING LIMITED an Isle of Man company (owning
M.V. "SEAWAY CONDOR", M.V. "SEAWAY OSPREY", M.V., "SEAWAY HARRIER" M.V. "SEAWAY
HAWK") and SCS SHIPPING CORPORATION, a Liberian corporation (owning M.V. "SEAWAY
EAGLE").
"SUBSIDIARY" means each corporate body and/or company within the definition of
ss. 2 - 1 of the Norwegian Companies Act or corresponding definition in any
other applicable company law in relation to the Parent or any other subsidiary.
"TAX" means any and all taxes, levies, imposts, duties, charges, fees,
deductions, and withholdings levied or imposed by any national or local
governmental or public body or authority.
"TECHNICAL MANAGER" means ▇▇▇▇▇ Comex Seaway AS.
"TECHNICAL MANAGEMENT AGREEMENT" means any one of the agreements between each
Shipowning Company and the Technical Manager dated 1 April 1993, 9 May 1997 and
1 December 1996 respectively in relation to the technical management of the
Vessels (Schedule 10).
"TOTAL LOSS" means any event which will entitle the respective Shipowning
Company to claim payment of the total insured value of each Vessel under such
Vessel's Hull and Machinery or War Risk insurance policies.
"US GAAP" means generally accepted accounting principles in The United States of
America, from time to time in effect, subject to any changes in the rules of US
GAAP, consistently applied always provided that if the Parent wishes to change
accounting principles within the applicable rules of US GAAP the Borrower shall
notify the Facility Agent of the intention together with an explanation of the
effects on the financial covenants in this Agreement. Should the Banks, and or
the Parent, find that such change will impact upon the result of the calculation
of the financial covenants herein, the Banks will, following consultation with
SCS, stipulate amendments to the financial covenants so that the ratio of SCS
Group's performance in respect of the covenant reflects the position which would
have been the case had no changes to SCS's accounting principles taken place.
"VESSEL" means each of M.V. "SEAWAY CONDOR" (Isle of Man), M.V. "SEAWAY HARRIER"
(Liberia), M.V. "SEAWAY OSPREY" (Liberia), M.V. "SEAWAY EAGLE" (Liberia) and
M.V. "SEAWAY HAWK" (Panama).
3. CONDITIONS PRECEDENT
3.1 CONDITIONS. The obligations of the Banks to make any portion of the Loan
Commitment available are conditional upon the Facility Agent having
received the following documents in form and substance satisfactory to
the Facility Agent, no later than 3 Banking Days prior to the first
Drawdown Date:
3.1.1 In respect of the Parent:
a. Articles of Association.
b. transcript of company register.
c. latest available audited accounts and unaudited
periodical report.
d. board resolution appointing an attorney to sign this
Agreement on behalf of the Parent in its capacity as
guarantor and the Parent Guarantee.
3.1.2 In respect of the Borrower:
a. Articles of Association.
b. company certificate.
c. latest available accounts and unaudited periodical
report.
d. board resolution authorising the Borrower's execution
of this Agreement and the Security Documents.
3.1.3 In respect of each Shipowning Company:
a. Articles of Association.
b. company certificate.
c. latest available accounts.
d. board resolution and to the extent applicable under the
relevant jurisdiction, shareholders approval, resolving
to execute and deliver the Inter Company Guarantee and
the relevant Mortgage, Assignment of Insurances and the
Security Documents set out in Schedule 7.
▇. receipt by the Security Agent of the Security Documents
referred to in sub-clause d, as duly recorded,
perfected to the satisfaction of the Security Agent.
3.1.4 In respect of each Vessel:
a. the relevant Charterparty at any time in existence.
b. the Management Agreement.
c. Certificate confirming insurance taken out pursuant to
Clauses 10.1.3 and 10.1.4.
d. Classification Certificates as specified in Clause
10.1.7 (Class).
e. a Certificate of Ownership and Encumbrances from the
relevant Ships Registry.
3.1.5 Evidence that all of the Security Documents including, but not
limited to the Mortgages having been arranged in a manner
satisfactory to the Security Agent, including, by way of
written confirmation from the relevant Ships Registry, that
the relevant Mortgage has been registered first priority and
that the relevant Vessel is free of other encumbrances.
3.1.6 Legal opinions by the Agents' and the Banks' legal advisers in
all jurisdictions affected by the transactions envisaged by
this Agreement, including, but not limited to, the legal,
valid, binding and enforceable execution of this Agreement and
each Security Document and perfection of all security
arrangements.
3.2 CERTIFIED COPIES. Each of the documents specified in Clause 3.1 shall
either be an original or a copy certified to be true and up-to-date by a
lawyer licensed to practice law in the relevant jurisdiction (or in
respect of Liberia, experienced in Liberian law) and where relevant, the
company secretary shall confirm in writing that the documents are correct
and up to date and that no subsequent changes have been made, approved or
is pending.
3.3 NO EVENT OF DEFAULT. The obligations of the Banks hereunder are subject
to the further general preconditions that at the time of request for and
at the time of making available an Advance no Event of Default and no
event which with the giving of notice or lapse of time, determination and
materiality or other condition may constitute such an Event of Default,
shall have occurred or be continuing or in the reasonable opinion of the
Facility Agent, will probably result from the making of such Advance.
3.4 WAIVERS. The Agents may, at their discretion, extend the period for
delivery of any of the documents referred to above on such conditions as
the Agents deem appropriate.
4. AVAILABILITY
4.1 NOTICE TO THE FACILITY AGENT. Each Advance shall be made available in
minimum amounts of USD 2 Mill. or the equivalent in any other
eurocurrency to the Borrower in one amount on a Drawdown Date, subject to
the Facility Agent having received the relevant Drawdown Notice, before
1100 hours London time not less than 3 Banking Days prior thereto.
4.2 MANNER OF PAYMENT. Each Advance under the Loan Commitment shall be made
available solely for the purposes referred to under Clause 1 (Facilities
and Purpose) above in a manner to be agreed between the Borrower and the
Facility Agent prior to the
Drawdown Date.
4.3 INDEMNITY. The Borrower shall indemnify each Bank against any loss or
expense which such Bank may sustain or incur as a consequence of any
portion of the Loan Commitment not being drawn or utilised after the
Drawdown Notice, has been served, including but not limited to any loss
or expenses incurred to fund the relevant portion of the Loan Commitment.
4.4 SEVERALITY OF OBLIGATIONS. The obligations of each Bank under this
Agreement are several, the failure of any Bank to perform any such
obligations shall not relieve the other Banks, the Agents or the Borrower
of any of their respective obligations or liabilities under this
Agreement, nor shall the Agents or any of the Banks be responsible for
the obligations of any other Bank under this Agreement.
5. REPRESENTATION AND WARRANTIES
5.1 Each of the Borrower and the Parent hereby represents and warrants
towards the Agents and the Banks jointly and severally that:
5.1.1 The Parent is a company duly organised and validly standing
under the laws of Luxembourg and has full power to enter into
and perform its obligations under this Agreement and the Parent
Guarantee.
5.1.2 The Borrower is a company duly organised and validly standing
under the laws of England and has full power to enter into and
perform its obligations under this Agreement.
5.1.3 This Agreement and the Parent Guarantee are binding on and is
enforceable against the Parent and the Borrower, respectively,
and will not be in breach of the Articles of Association,
agreements or other obligations of the Parent and the Borrower
or any other member of the SCS Group.
5.1.4 The Shipowning Companies are fully authorised to issue the Inter
Company Guarantee, the Assignment of Earnings, the Mortgage and
the Assignment of Insurances and these documents will be binding
and enforceable against the respective Shipowning Company.
None of the documents referred to above is in violation of any
Articles of Association, agreements or any other obligation of
the relevant Shipowning
Company.
5.1.5 Neither the Borrower, the Parent, nor any of the Shipowning
Company is entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceedings except for
limitations imposed by laws affecting creditors' rights
generally.
5.1.6 All consent, necessary authorisation or declaration to or
registration with any governmental or public bodies or courts in
order for the Parent, the Borrower and/or the Shipowning
Companies to perform its obligations hereunder have been
obtained and are in full force and effect.
5.1.7 No circumstances exist which may make the obligations of the
Parent, the Borrower and/or the Shipowning Companies pursuant to
this Agreement and documents to issued pursuant to this
Agreement invalid.
5.1.8 Any financial information given by the Borrower, the Shipowning
Companies, ▇▇▇▇▇ Comex Seaway MS Ltd and the Guarantor in
writing to the Agents and the Banks in connection with this
transaction are true and correct.
6. SECURITY - NEGATIVE PLEDGE
6.1 SECURITY. The Loan together with all unpaid interest, default interest,
commissions, charges, expenses and any derived liability whatsoever of
the Borrower towards the Banks and the Agents in connection therewith
shall be secured by:
a. the Mortgage on each Vessel together with a Deed of
Covenant (as applicable).
b. the first priority insurance assignment pertaining to
the insurances as detailed in Clauses 10.1.3
(Insurances) in respect of each Vessel, which are
hereby assigned to the Banks and the Security Agent.
c. the Parent Guarantee.
d. the Inter Company Guarantees.
e. the Assignment of Earnings.
6.2 SET-OFF. In the event of non-payment of any amount hereunder when due,
the Facility Agent, the Security Agent and each of the Banks individually
shall have a separate right of set-off in respect of any credit balance,
in any currency, on any account the Borrower or the Parent might have
with the Agents or any of the Banks (branches included) from time to
time, towards satisfaction of any sum due to it, to the Agents or any of
the other Banks hereunder.
6.3 NEGATIVE PLEDGE. The Borrower and the Parent hereby covenant and agree
that the
▇▇▇▇▇▇▇▇, the Parent or any member of the SCS Group in the Facility
Period, will not create or permit to arise or subsist any mortgage, lien,
charge, royalty, right of set-off or other encumbrance of whatever nature
upon any of the Accounts Receivable except as exist on the date hereof.
7. CURRENCIES
7.1 NOMINATION OF CURRENCY. Any Advance may be made in USD or any other
Eurocurrency, including but not limited to FRF, NOK, GBP, available to
the Banks always provided that
(i) the Borrower shall in the Drawdown Notice in relation to an
Advance to be made specify the currency in which such Advance
is to be made available (the "Nominated Currency");
(ii) the Facility Agent shall after consultation with the Banks
have confirmed to the Borrower that the requested currency and
Interest Period are available to all the Banks for lending to
the Borrower not later than two Banking Days before drawdown;
(iii) the Loan shall not be nominated in more than five currencies
at any time.
7.2 CALCULATION OF CURRENCY AMOUNT. The amount of an Advance in any Nominated
Currency shall be equal to the USD amount of the Advance at the spot rate
of exchange quoted by the Facility Agent to be ruling in the London
Interbank Currency Exchange Market for the buying of USD with the
Nominated Currency at or about 1000 hours London time two Banking Days
before the day on which the Advance is to be made available to the
Borrower.
7.3 RENEWALS. Subject to Clause 7.4 below any renewals of the Loan or any
part thereof shall be made in the Nominated Currency or Nominated
Currencies in the same amount as is outstanding at the date of renewal.
In the event that at the date of renewal or if earlier 6 months after the
last renewal the USD amount of the Advance exceeds the amount of the
Advance outstanding in another Nominated Currency or Currencies,
calculated as provided for in Clause 7.2, the Facility Agent shall notify
the Borrower in writing specifying the amount of the shortfall, which
shall be forthwith paid by the Borrower to the Facility Agent on behalf
of the Banks.
7.4 UNAVAILABILITY OF CURRENCY. If the Facility Agent shall certify after
consultation with the Banks that the currency or currencies requested are
available the Facility Agent shall comply with such request and as soon
as practicable notify the Borrower of the sum in the Nominated Currency
which will represent the Advance during the relevant Interest
Period following the date of such Advance or, as the case may be, the
Interest Payment Date to which the request relate, but, to the extent not
so requested or if the Facility Agent shall not so certify or if the
Facility Agent shall certify that adequate and reasonable means do not
exist for determining the interest rate which should apply to the loans
under Clause 7.1, then the Advance shall be made available or (as the
case may be) continued in USD and the Borrower shall be so notified by
the Facility Agent. If any Advance is to be renewed in USD as aforesaid
the USD amount of the Advance shall be equal to the amount of the said
Advance in the Nominated Currency at the spot rate of exchange quoted by
the Facility Agent to be ruling in the London Interbank Currency Exchange
market for the buying of USD with the said Nominated Currency at or about
1100 hours London time two Banking Days before the relevant Interest
Payment Date.
7.5 EXTRA COST. If any Advance is nominated in any currency other than USD
the Banks shall be reimbursed for any extra cost (including indirect
costs in respect of reserve requirement) due to such nomination as
conclusively determined by the Facility Agent. If an Advance is nominated
in GBP such extra costs shall be equal to the Associated Costs Rate.
8. INTEREST
8.1 INTEREST RATE. The Borrower shall pay interest on the Loan in respect of
each Interest Period in arrears on each Interest Payment Date at a rate
equivalent to the aggregate of LIBOR and the Applicable Margin.
8.2 INTEREST PERIOD. The Borrower shall be entitled to nominate in the
Nomination (Drawdown) Notice not later than 1100 hours Oslo time 3
Banking Days prior to the commencement of each Interest Period, whether
the length of the ensuing Interest Period for the relevant Advance shall
be one, three or six months or such other Interest Period as shall from
time to time be agreed in writing between the Borrower and the Facility
Agent (subject to availability to all the Banks), always provided that:-
8.2.1 ABSENCE OF NOMINATION. In the absence of any such nomination
by the Borrower, or if the Facility Agent after consultation
with the Banks shall certify to the Borrower that the funds
requested by the Borrower are not available to all the Banks,
the length of such Interest Period shall be three months.
8.2.2 INSTALMENTS. If any Reduction Date will occur during an
Interest Period to be nominated, a separate Interest Period
ending on such Reduction Date shall be nominated for an amount
equal to the amount by which the Loan would otherwise exceed
the amount of the Loan Commitment following the
Reduction Date.
8.2.3 BANKING DAY. If any Interest Period would end on a day which
is not a Banking Day such Interest Period shall end on the
next succeeding Banking Day in the same calendar month or, if
none, the preceding Banking Day.
8.2.4 ONE MONTH INTEREST PERIODS. The Borrower shall not be entitled
to nominate an Interest Period of one month's duration on more
than three occasions during each calendar year.
8.2.5 NUMBER OF ADVANCES. The Loan shall not be divided into more
than 10 Advances at any time.
8.3 INTEREST CALCULATION. Interest shall accrue from day to day and be
calculated on the actual number of days elapsed and on the basis of a
360-day year, but in the case of GBP on the basis of a 365-day year.
8.4 DEFAULT INTEREST. In the event of any payments hereunder not being
received on the due date therefore, interest will be charged by the
Facility Agent from the due date until the date that payment is received,
at a rate corresponding to the aggregate of LIBOR (for such periods as
the Facility Agent in its sole discretion shall decide), the Applicable
Margin and 1% p.a. (one per cent per annum). Interest charged under this
Clause 8.4 shall be added to the defaulted amount on each respective
Interest Payment Date until the defaulted amount has been repaid in full.
8.5 NO LIBOR QUOTATION. If for any reason the Facility Agent shall be unable
to establish LIBOR for the relevant Interest Period, the Borrower shall
pay interest on the Loan at a rate which equals the cost for each Bank of
making, funding and maintaining its participation in the Loan plus the
Applicable Margin.
9. LOAN COMMITMENT REDUCTION/PREPAYMENT/CANCELLATION
9.1 REDUCTION. On each Reduction Date the Loan Commitment shall be reduced by
USD 12,500,000. The Loan Commitment shall be reduced to nil on the Final
Repayment Date.
9.2 CANCELLATION. The Borrower shall be entitled to cancel the Loan
Commitment in whole or in part being at least USD 5,000,000 or any whole
multiple thereof upon giving the Facility Agent at least 5 Banking Days
prior written notice.
In case such cancellation entails to that the maximum amount of the Loan
Commitment is less than the Loan, the Borrower shall prepay an amount
necessary to reduce the Loan
to such maximum amount at the same day as the cancellation notice takes
effect. Clause 16.2 shall apply.
9.3 REBORROWING. Any amount prepaid pursuant to Clause 9.2 above shall not be
available for reborrowing.
9.4 PREPAYMENT UPON TOTAL LOSS. In the event that a Vessel suffers a Total
Loss (a "TOTAL LOSS VESSEL"), the amount of the Loan Commitment (as
previously modified from time to time in accordance with this Article 9)
shall be reduced by an amount equal to the product of (x) the amount of
the Loan Commitment immediately prior to the Total Loss and (y) a
fraction (the "TOTAL LOSS FRACTION") whose numerator is the total loss
insurance (including Hull and Machinery, Hull Interest and Freight
Interest) on the Total Loss Vessel and whose denominator is the total
loss insurance on all of the Vessels including the Total Loss Vessel. If,
as a result of this reduction, the Loan becomes greater than the Loan
Commitment, the Borrower shall repay the difference within 90 days of the
Total Loss, such amount to be applied towards cancellation/prepayment
pursuant to Clause 9.2 above. The amount of any subsequent reductions to
be effected in accordance with Clause 9.1 shall be reduced by an amount
equal to the product of the reduction as set forth therein and the Total
Loss Fraction. Notwithstanding the foregoing, upon occurrence of any
Event of Default the full amount of Total Loss Insurance shall be paid to
the Banks and applied as aforesaid.
10. COVENANTS
10.1 GENERAL COVENANTS. Each of the Borrower and the Parent undertakes with
the Agents and the Banks and each of them severally that, unless the
Agents has given their prior written consent to the contrary, it will and
procure that each Shipowning Company will to the extent applicable, in
the Facility Period:-
10.1.1 INFORMATION. Promptly inform each Agent about any event which
constitutes or may constitute (by giving of notice, lapse of
time and/or the making of any determination hereunder) an
Event of Default, or which will adversely affect the
Borrower's ability fully to perform its obligations under this
Agreement or any of the Guarantor, Shipowning Companies or
Principal Subsidiaries' ability fully to perform its
obligations under any of the Security Documents to which it is
respectively a party or which may adversely affect the
Parent's ability fully to perform its obligations hereunder or
under the Parent Guarantee.
10.1.2 FINANCIAL INFORMATION. Deliver to the Facility Agent for
distribution to the Banks as many copies (in English) as the
Facility Agent may reasonably require of (a) on a consolidated
basis its and the Parents and (if reasonably required by the
Facility Agent and the company in question is obliged by law
or other regulations to prepare accounts) on a
non-consolidated basis each of the Shipowning Companies and
Principal Subsidiaries' annual audited accounts as soon as
practicable after the same have been issued and in any event
not later than 180 days after the end of the relevant
financial year, (b) on a consolidated basis the SCS Group's
unaudited quarterly financial statements (including cash-flow
analysis) not later than 90 days after the end of the relevant
fiscal quarter (c) its, the Parent's and the SCS Group's
budgets, (d) any financial information delivered by the Parent
to its Shareholders, (e) statement of Accounts Receivable at
least once annually (f) such other information about its
business and financial conditions as the Majority Banks may
reasonably require and (g) a cash flow projection for the
following five years to be provided semi-annually (h) list and
broad description of all contracts with a value in excess of
USD 2 million to be performed by any company in the ▇▇▇▇▇
Comex Seaway Group to be provided semi-annually such
information to be in a format as exemplified in Schedule 11.
10.1.3 INSURANCES. Procure that each Vessel is kept fully insured
against such risks, in such amounts, on such terms and with
such underwriters as the Agents may reasonably require
including, but not limited to
▇. ▇▇▇▇ and Machinery plus Hull Interest and Freight
Interest insurance covering the Market Value of the
Vessels (or in aggregate 120% of the Loan if higher),
b. Protection and Indemnity insurances,
c. War Risk insurances covering the Market Value of the
Vessels (or in aggregate 120% of the Loan, if
higher),
The Borrower shall register and maintain the registration of
the Security Agent (on its own behalf and on behalf of the
Banks) as mortgagee in all insurance policies in accordance
with the provisions of Chapter 8 of the Plan.
10.1.4 MORTGAGEE INTEREST. Let the Security Agent order (at the
Borrower's expense), a Mortgagee Interest Insurance in form
and substance satisfactory to the Agents in favour of the
Security Agent (on its own behalf and on behalf of the Banks),
or, if so directed by the Security Agent, arrange for such
insurance cover to be established in accordance with
instructions from the Security Agent.
10.1.5 CERTIFICATE OF INSURANCES. Procure an annual certificate to
the Security Agent from each Vessel's underwriters evidencing
that all insurances referred to in Clause 10.1.3 (Insurances)
and , if relevant 10.1.4 (Mortgagee Interest), have been taken
out and are in full force and effect.
10.1.6 NOTIFICATION. Immediately notify the Agents of:-
a. any accident to a Vessel involving repairs the cost
of which is likely to exceed USD 2,500,000.
b. any occurrence in consequence whereof a Vessel has
become or is likely to become a Total Loss.
c. any arrest of a Vessel or the exercise or purported
exercise of any lien on a Vessel or her Earnings.
10.1.7 CLASS. Have each Vessel classified and maintained in the
highest class with Det Norske Veritas, Lloyds or another
classification society acceptable to the Agents, and shall not
change class. Further the Vessels shall from 1 July 1998
comply with the International Ship Management Code always
provided that this requirement shall not apply to Seaway
Osprey and Seaway Harrier until 1 July 2002.
10.1.8 REPAIRS AND ALTERATION OF THE VESSELS. Not bring any Vessel to
any yard for repairs the costs of which is likely to exceed
USD 2.5 million or, save for what is necessary in the course
of the normal operation of a Vessel without adversely changing
its class or trading capabilities, permit any major change or
structural alteration to be made to a Vessel.
10.1.9 FLAG. Not change the flag of any Vessel.
10.1.10 MANAGEMENT. Not terminate or amend the Management Agreement in
a manner which may be detrimental to the interest of the Banks
and the Agents.
10.1.11 SALE OF VESSEL. Not sell a Vessel (or a Shipowning Company).
10.1.12 EMPLOYMENT OF VESSELS. Not charter out any of the Vessels on
(i) bareboat terms or (ii) in any other way for more than 12
months. Committing the use of a Vessel with respect to any
service shall not be regarded as a charter unless such ▇▇▇▇▇▇
is committed for a consecutive period of not less than 12
months.
10.1.13 BANK ACCOUNTS. Maintain the Assignment Accounts with the
Facility Agent.
10.1.14 NO FURTHER ENCUMBRANCES. Not secure any debt or guarantee
obligation on any Vessel or on any other asset constituting
security pursuant to Clause 6 (Security), or on any Earnings
other than as contemplated in this Agreement.
10.1.15 MERGER OR DEMERGER. Not merge or otherwise permit any
amalgamation unless the Parent, the Borrower and each
Shipowning Company remains the surviving entity following such
merger or amalgamation and not demerge or otherwise divest any
part of its assets or operations.
10.1.16 CORPORATE DOCUMENTS. Procure that its Articles of Association
nor any of its corporate documents are not varied in any way
adverse to the interests of the Banks.
10.1.17 LAWFUL CONDUCT. At all times manage its business and the
Vessels in compliance with all relevant applicable laws and
regulations and immediately notify the Agents of any
significant breach thereof.
10.1.18 PUBLIC LISTING. Procure that the Parent shall be publicly
listed unless owned by, in the Banks' discretion, significant
and recognized bodies corporate in the sub-sea industry, being
of an investment grade of at least BBB as defined by Standard
& Poor or any other similar investment grade.
10.2 FINANCIAL COVENANTS
10.2.1 CERTIFICATE OF COMPLIANCE. The Borrower and the Parent shall
send to the Facility Agent on behalf of the Banks within 90
days after the end of each fiscal quarter, respectively, a
completed and signed Certificate of Compliance, confirming
that the requirements of this Clause 10.2 have been fulfilled.
10.2.2 CONSOLIDATED TANGIBLE NET WORTH. Maintain a Consolidated
Tangible Net Worth of the Parent of minimum USD 250,000,000 at
all times during the Facility Period.
10.2.3 CONSOLIDATED DEBT TO CONSOLIDATED TANGIBLE NET WORTH RATIO.
Maintain a Consolidated Debt to Consolidated Tangible Net
Worth ratio of maximum 1:1 as calculated semiannually, per 31
May and 30 November of each year.
10.2.4 CONSOLIDATED DEBT TO EBITDA RATIO. Maintain on a rolling four
fiscal quarters basis a D/EBITDA ratio of maximum 4:1.
10.3 BANK'S APPROVAL. A waiver by the Agents of the Borrower's compliance with
the provisions set out in Clause 10.1.2 (Financial Information), 10.1.4
(Mortgage Interest), 10.1.8 (Repairs and Alteration of Vessel), 10.1.9
(Flag), 10.1.10 (Management), 10.1.11 (Sale of Vessel), 10.1.12
(Employment of Vessels), 10.1.13 (Bank Accounts) and 10.1.17 (Class),
shall require the prior approval of the Majority Banks, and a waiver of
any other provision in Clause 10.1 shall require the prior approval of
all of the Banks.
11. MINIMUM VALUE
11.1 VALUATION. The Borrower shall at least once annually and at the
reasonable request by the Facility Agent, at any time during the Facility
Period, arrange for the Market Value of any Vessel to be determined at
the Borrower's expense.
11.2 MINIMUM VALUE REQUIREMENT. The aggregate Market Value of the Vessels
shall not be less than 120 % of the Loan at any time during the Facility
Period.
11.3 PREPAYMENT. If the aggregate Market Value of the Vessels is less than
required in Clause 11.2 (Minimum Value), the Borrower shall, if so
instructed by the Majority Banks, prepay such amount of the Loan as is
necessary to comply with Clause 11.2 (Minimum Value), or provide
additional security in form and substance acceptable to all of the Banks
(in their absolute discretion).
11.4 RELEASE OF ADDITIONAL SECURITY. If after having provided further security
pursuant to Clause 11.3 two consecutive valuations of the Vessels with at
least 6 months intervals results in that the aggregate Market Value
exceeds 120% of the Loan the additional security shall be released or the
Loan Commitment, be available for redrawing.
12. EVENTS OF DEFAULT
12.1 EVENTS. Each of the following events shall constitute an Event of
Default:-
12.1.1 OVERDUE PAYMENT. The Borrower fails to pay any amount payable
by it pursuant to the provisions of this Agreement when due.
12.1.2 DEFAULT UNDER OTHER PROVISIONS. The Borrower or the Parent
defaults under any of the covenants or the other provisions of
this Agreement (other than as referred to in 12.1.1 (Overdue
Payment)) or under the Security Documents, which (if such
default, in the reasonable opinion of the Majority Banks, is
capable of being remedied) is not remedied within 14 days
after notice has been given to the Borrower (such period of
remedy in any event not being applicable in the event of a
default by the Borrower under the provisions of Clause 10.1.3
(Insurances), 10.1.4 (Mortgagee Interest) or 10.1.7 (Class)
above).
12.1.3 INFORMATION FROM BORROWER. Any information given in writing by
the Borrower or the Parent in or in connection with this
Agreement or the Security Documents, proves to be materially
incorrect, misleading or inaccurate when made.
12.1.4 CROSS DEFAULT. Any other loan, guarantee, lease and charter
obligation or other indebtedness of the Borrower, the Parent
or any Principal Subsidiary is
declared, or is capable of being declared due prematurely by
reason of default, or the Borrower, the Parent any Shipowning
Companies or Principal Subsidiaries fails to make payment in
respect thereof on the due date for such payment, or security
for any such other loan, guarantee or indebtedness becomes
enforceable save for amounts less than USD 2,500,000 and
claims contested in good faith.
12.1.5 LIENS AND MATERIAL LITIGATION. Except for permitted liens, a
maritime or other lien, arrest, distress or similar charge is
levied upon, or against a Vessel or any substantial part of
the assets of the Parent (on a consolidated basis) and such is
not discharged within 14 Banking Days after the Borrower, the
Parent or (as the case may be) the relevant Shipowning
Company, has become aware of the same.
A final judgement involving amount in excess of USD 10,000,000
is rendered towards any company within the SCS Group in
respect of amounts including any tax claims and which remains
unsettled after 14 days.
12.1.6 LOSS OF PROPERTY. A substantial part of the SCS Group's
business or assets are destroyed, abandoned, seized,
appropriated or forfeited for any reason, except in the case
of Total Loss of a Vessel.
12.1.7 LIQUIDATION. An order of a competent court or an event
analogous thereto shall be made or any effective resolution
passed with a view to the bankruptcy, composition proceedings,
debt negotiations, liquidation, winding-up or similar event of
the Borrower, the Parent, any Shipowning Company or Principal
Subsidiary.
12.1.8 ADMITTANCE OF NON-PAYMENT. The Borrower, the Parent, any
Shipowning Company or Principal Subsidiary is unable or admits
in writing its inability to pay any lawful debts as they
mature.
12.1.9 TERMINATION OF BUSINESS. The Borrower, the Parent, any
Shipowning Company or Principal Subsidiary without the prior
written consent of the Agents, ceases or threatens to cease to
carry on its business or disposes or threatens to dispose of a
substantial part of its business or assets.
12.1.10 PERMITS. Any license, consent, permission or approval required
in connection with the implementation, maintenance and
performance of this Agreement and/or the Security Documents is
revoked, terminated or modified in a manner unacceptable to
the Majority Banks.
12.1.11 OWNERSHIP OF THE BORROWER. The Borrower shall cease to be 100%
directly or
indirectly owned by the Guarantor
12.2 LOAN ACCELERATION. Upon the occurrence of any Event of Default, the
Facility Agent may, and, upon instruction from the Majority Banks, shall,
forthwith notify the Borrower in writing whereupon the Outstanding
Indebtedness shall become immediately due and payable and the Banks shall
be under no further obligation to advance funds to the Borrower
hereunder.
12.3 IMPOSSIBILITY OR ILLEGALITY. If it becomes impossible or unlawful for the
Borrower, the Parent, any Shipowning Company or Principal Subsidiary to
fulfil any of the terms of this Agreement and/or the Security Documents
or for the Security Agent, the Facility Agent or for the Banks to
exercise any right or power vested in them under this Agreement and/or
the Security Documents, or the security created by any of the Security
Documents is imperilled the Borrower shall prepay the Loan within 7 days,
always provided that if such illegality or impossibility only apply to
parts of the Security Documents such payment shall made to the extent, in
the opinion of the Security Agent, necessary to secure any shortfall in
amount of security provided by the Borrower.
13. DEFAULT INDEMNITY
13.1 DEFAULT INTEREST. Without prejudice to the provisions of Clause 12
(Events of Default), if the Borrower fails to pay when due any sum
payable hereunder the Borrower shall, from the date when such sum falls
due, pay interest on the unpaid sum in the relevant Nominated Currency or
Currencies up to the date of payment at the rate, which is 1% p.a. (one
per cent per annum) above the rate per annum determined by the Facility
Agent as the rate per annum at which it was offered deposits in the
relevant Nominated Currency in an amount comparable to such unpaid sum
and for such period not exceeding three months as it may select, in the
London Interbank Eurocurrency Market at 1100 hours London time on the
Banking Day succeeding that on which it became aware of the default for
value two Banking Days later, provided that if for any such period the
Facility Agent was not offered by prime banks deposits in the relevant
Nominated Currency in the required amount and for the required period,
the rate of interest applicable to the unpaid sum shall be determined by
reference to the cost to the Banks of obtaining such deposits from such
sources as they may select. Such interest shall be payable at the end of
each such period selected as aforesaid and so long as the sum remains
unpaid, such rate shall re recalculated on the same basis at the end of
each period for which an interest rate is determined as aforesaid.
13.2 INDEMNITY BY ▇▇▇▇▇▇▇▇. Without prejudice to the foregoing the Borrower
will indemnify each Bank against any loss or expense incurred by such
Bank which is attributable to the default by the Borrower in the payment
of any sum due from the
Borrower hereunder, including, but not limited to, funds borrowed or
taken by any Bank in order to cover the amount of any sums paid to the
Beneficiary.
13.3 INDEMNITY AMOUNT CERTIFICATE. A certificate by the Issuing Bank or the
Facility Agent as to the amount payable by the Borrower to the Issuing
Bank or other Bank under Clause 13.2 shall , in the absence of manifest
error, be conclusive.
14. CHANGES IN CIRCUMSTANCES
14.1 INCREASED COSTS. If by any reason of: (i) any changes in any existing
law, rule or regulation, or (ii) the adoption of any new law, rule or
regulation, or (iii) any change in the interpretation or administration
of (i) or (ii) above by any governmental authority, or (iv) compliance
with any directive or request from any governmental authority (whether or
not having the force of law):
a) a Bank incurs a cost as a result of having entered into this
Agreement and/or as a result of performing its obligations
hereunder, or
b) there is an increase in the cost to a Bank of funding or
maintaining its participation in the Loan Commitment/Loan, or
c) a Bank becomes liable for any new Taxes (other than on net income)
calculated by reference to its participation in the Loan
Commitment/Loan, or
d) a Bank becomes subject to capital adequacy or similar requirements
not known to or reasonably anticipated by such Bank at the date
hereof which will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank based
on such Bank's participation in the Loan Commitment/Loan,
then any such cost, liability or reduced return shall be payable by the
Borrower upon request by the Facility Agent (on behalf of the Bank
affected) from the date such request was received by the Borrower either
in the form of an increased margin or in the form of an indemnification
in the amount conclusively (save in the case of manifest error)
determined in the Facility Agent's request.
14.2 ILLEGALITY. In the event that it shall be unlawful for any Bank to make
or maintain such Bank's participation in the Loan Commitment/Loan, the
Facility Agent shall, upon request from such Bank, serve notice of such
illegality on the Borrower.
14.3 UNAVAILABILITY OF FUNDS. In the event that any Bank is unable to obtain
deposits in USD in the London Interbank Eurocurrency Market, the Facility
Agent shall, upon
request from such Bank, serve notice of such inability on the Borrower.
14.4 ALTERNATIVE FUNDING. If so requested by the Borrower, the Facility Agent
and the Banks shall use reasonable efforts to make the participation in
the Loan Commitment/Loan of the Bank affected by the circumstances
contemplated in Clause 14.1 (Increased costs), 14.2 (Illegality) or 14.3
(Unavailability of funds), available from alternative sources.
14.5 PREPAYMENT. Upon occurrence of circumstances set out in Clause 14.2
(Illegality) or 14.3 (Unavailability of funds) the Borrower shall, unless
alternative funding/Issuing Bank has been or will be arranged within a
period acceptable to the Bank affected, prepay the affected Bank's
participation in the Loan pursuant to the provisions of Clause 16.2
(General prepayment provisions) on the first occurring Interest Payment
Date (and the Loan Commitment shall be reduced accordingly).
15. FEES, COSTS AND EXPENSES
The Borrower shall pay to the Facility Agent for distribution between the Banks
and the Agents pursuant to separate agreements:
15.1 COMMITMENT COMMISSION. A commitment commission equal to 50% p.a. (fifty
per cent per annum) of the Applicable Margin calculated on the from time
to time unutilised (and uncancelled) portion of the Loan Commitment (on a
day to day basis and calculated according to a 360 day year) from the
date of this Agreement until the Final Repayment Date and payable in
arrear on the last day of each successive period of three months and on
the Final Repayment Date.
15.2 FEES. Participation Fee and Agency Fee pursuant to a letter of even date
herewith.
15.3 COSTS. Upon demand, whether or not the Loan Commitment or any part
thereof is ever advanced to the Borrower hereunder, all reasonable costs,
charges and expenses (including external and internal legal fees)
incurred by the Agents and the Banks in connection with the syndication,
negotiation, preparation and execution of, and all costs, charges and
expenses of the Agents and the Banks in connection with the enforcement
and preservation of the Agents' and the Banks' rights under this
Agreement and under the Security Documents or otherwise in connection
with the Facility.
16. PAYMENTS
16.1 TAXES. All payments to be made by the Borrower under this Agreement shall
be made
in USD or such other Eurocurrency in which the relevant Advance is then
outstanding to the Facility Agent as directed by the Facility Agent and
shall be made without set-off or counterclaim or any deductions for, and
free and clear of any Taxes. In the event that the Borrower is required
by law or regulation to deduct or withhold any such Taxes the sums to be
paid shall be increased by such amount as shall be necessary to ensure
that the amount received by the Facility Agent and/or the Banks after
such deduction or withholding, is equal to the amount which would have
been received under this Agreement had no such deduction or withholding
been required.
The Banks undertake at the cost of the Borrower to render the Borrower
all reasonable assistance to obtain necessary clearances from relevant
tax authorities in order for the Borrower to be able to make payments of
interest without making withholdings of any Taxes.
16.2 GENERAL PREPAYMENT PROVISIONS. If the Loan, or any part thereof, for any
reason whatsoever, is prepaid or repaid on a day other than the relevant
Interest Payment Date, the Borrower shall, simultaneously with such
prepayment, pay to the Facility Agent, for the account of the affected
Banks, accrued interest on such prepaid amount to the date of actual
payment and all other sums payable by the Borrower to such Banks, and the
Agents pursuant to this Agreement, together with such additional amounts
as may be specified by such Banks in an explanatory certificate (which in
the absence of manifest error shall be conclusive) to be necessary to
compensate such Banks for any loss, premium or penalties incurred or to
be incurred by such Banks in liquidating deposits or redeploying funds
taken or borrowed to fund or maintain such Banks' participation in the
Facility for the remainder of the then current Interest Period.
16.3 REFUND OBLIGATION. If an Agent or any Bank pays any amount to the
Borrower, which should not have been paid to the Borrower, the Borrower
shall forthwith on demand refund such amount to such Agent or such Bank.
The Borrower shall also on demand pay interest equal to LIBOR on the
relevant sum for each day from the date such amount was so made available
by the relevant Agent or Bank until the date such amount is repaid to
such Agent or Bank.
17. AGENCY
17.1 AGENTS' AUTHORITY. Each Bank irrevocably authorises each Agent to take
such action on its behalf and to exercise such powers as are specifically
delegated to it by the terms of this Agreement and the Security Documents
together with all such powers as are reasonably incidental thereto. The
relationship between the Agents and the Banks is that of agent and
principal only, nothing herein shall (nor shall it be construed so as to)
constitute the Agents as trustees for the Banks or impose on either Agent
or any of the Banks any duties or obligations other than those for which
express provision is made in
this Agreement or under the Security Documents.
17.2 APPLICATION OF FUNDS. Any amounts received by the Agents hereunder shall
promptly be distributed and applied firstly against costs and expenses
incurred by the Agents hereunder, secondly against amounts due to the
Agents and the Banks hereunder other than interest and principal, thirdly
against interest due hereunder and fourthly against principal due
hereunder.
17.3 SHARING OF PAYMENT. If any Bank at any time receives or recovers by
set-off or otherwise any amount due to it hereunder (otherwise than
amounts specifically payable to that Bank under the terms of this
Agreement), then such Bank shall share such amount rateably with the
Agent and the other Banks pursuant to the principles of Clause 17.2
(Application of funds). ▇▇▇▇▇▇▇ received hereunder shall be subject to
adjustment if the Bank having shared a recovered amount, becomes obliged
to repay any such amount to the Borrower or any third party.
17.4 INFORMATION TO BANKS. Each Agent shall promptly advise the other Agent
and the Banks of each notice received by it from the Borrower hereunder.
The relevant Agent shall not be under any obligation towards the Banks to
ascertain or enquire as to the performance or observance of any of the
terms or conditions hereof, other than a failure to make payment of sums
due.
17.5 INDEMNIFICATION OF AGENTS. Each Bank shall, rateably in accordance with
its respective participation in the Loan, indemnify and hold the Agents
harmless against any loss or liability, which either Agent may suffer or
incur by reason of an action taken or omitted by it as Agent hereunder or
under the Security Documents (except in the event of gross negligence or
wilful misconduct) to the extent that such Agent shall not have been
reimbursed therefore by the Borrower.
17.6 DISCLAIMER OF LIABILITY. The Agents take no responsibility for the truth
of any covenants, representations or undertakings given or made herein or
in the Security Documents nor the validity, effectiveness, adequacy or
enforceability of this Agreement or the Security Documents and neither
Agent (except in the case of gross negligence or wilful misconduct) nor
any of their directors, officers or employees shall be liable for any
action taken or omitted by it or any of them.
17.7 INDIVIDUAL CREDIT RISK ASSESSMENT. Each Bank shall be responsible for
making its own independent investigation of the financial condition and
affairs of the Borrower in connection with the making and continuance of
the Facility or the relevant part thereof, and has made its own appraisal
of the creditworthiness of the Borrower and (on a consolidated basis) the
Parent.
17.8 AGENTS' OTHER BUSINESS WITH ▇▇▇▇▇▇▇▇. Each Agent may, without liability
to
account, accept deposits from, lend money to and generally engage in any
kind of banking or trust business with the Borrower, the Parent and any
member of the SCS Group.
18. ASSIGNMENT
18.1 PARENT & BORROWER. The Borrower, the Parent and the Shipowning Companies
may not assign any of its rights or obligations hereunder or under the
Security Documents to others.
18.2 BANK TO AFFILIATE. Each Bank may, by giving prior written notice to the
Facility Agent and the Borrower, assign all or a part of its rights
hereunder to an "Affiliate", and "Affiliate" shall for this purpose mean
the ownership (whether directly or indirectly) of 50 % or more of the
equity share capital (or similar right of ownership) of the relevant
institution or vice versa.
18.3 BANK TO OTHER FINANCIAL INSTITUTIONS. Each Bank may furthermore, subject
to the prior written approval of the Agents and the Borrower (such
approval not to be unreasonably withheld) assign all or a part of its
rights hereunder to any other bank or financial institution.
18.4 SUBSEQUENT PAYMENTS. In the event of a transfer of all or part of a
Bank's rights hereunder, the Borrower shall subsequently make all
payments under this Agreement for the rateable account of the relevant
Bank and/or its assignee.
19. NOTICES AND CORRESPONDENCE
19.1 Every notice or demand under this Agreement shall be in writing, but may
be given or made by telefax which shall be sent to the relevant Agent and
the Borrower at their respective addresses, being in respect of the
Agents at:
THE FACILITY AGENT:
MIDLAND BANK PLC
▇▇ - ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
ENGLAND
Att.: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Shipping and Aviation
Telefax No.: 00 44 171 260 4381
THE SECURITY AGENT:
DEN NORSKE BANK ASA
▇.▇.▇▇▇ 1171 - Sentrum
N-0107 OSLO
NORWAY
Att.: Credit Administration Shipping
Telefax No.: 22 48 28 94
and in respect of the BORROWER at:
SEAWAY (UK) LIMITED
c/▇ ▇▇▇▇▇ COMEX SEAWAY M.S. LTD
Bucksburn House
▇▇▇▇▇ Road, Bucksburn
UK - ABERDEEN AB 2 9RQ
SCOTLAND
Att.: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ No.: 00 44 1224 715 129
or to such other address or telefax number as may from time to time be
notified by the relevant party. In the case of notices from the Borrower,
all telefax messages shall be confirmed by letter posted as soon as
practicable thereafter if so requested by the relevant Agent or Agents.
20. CURRENCY INDEMNITY
No payment to the Banks hereunder pursuant to any judgement or order of any
court or otherwise shall operate to discharge the obligations of the Borrower or
(as the case may be) the Parent in respect of which it was made unless and until
payment in full shall have been received by the Agent and the Banks in the
Nominated Currency. To the extent that the amount of any such payment shall on
actual conversion into the Nominated Currency fall short of the amount of the
relevant obligation expressed in the Nominated Currency, the Agent or such Bank
shall have a further and separate cause of action against the Borrower for the
recovery of such sum as shall, after conversion into the Nominated Currency, be
equal to the amount of the shortfall.
21. MISCELLANEOUS
21.1 SEVERALITY OF PROVISIONS. This Agreement and the Security Documents shall
constitute one Agreement, but in the event of any conflict between the
provisions of this Agreement and any of the Security Documents, the
provisions on this Agreement shall prevail unless thereby rendering the
Security Documents or any of them, or any part thereof void, invalid or
unenforceable.
21.2 CLAUSE HEADINGS. Clause headings are for convenience of reference only
and shall in no way affect the interpretation of this Agreement.
22. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with Norwegian
law, and the Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the Norwegian courts, the venue to be Oslo City Court. IN
WITNESS WHEREOF each of the parties hereto have caused this Agreement to be
signed by their duly authorised officers on the date and year first above
written.
for and on behalf of for and on behalf of
SEAWAY (UK) LIMITED ▇▇▇▇▇ COMEX SEAWAY S.A.
(as Borrower) (as Guarantor)
By: _________________________ By: _________________________
Name: Name:
for and on behalf of for and on behalf of
DEN NORSKE BANK ASA MIDLAND BANK PLC
By: _________________________ By: _________________________
Name: Name:
for and on behalf of for and on behalf of
MIDLAND BANK PLC DEN NORSKE BANK ASA
(as Facility Agent) (as Security Agent)
By: _________________________ By: _________________________
Name: Name:
For the purpose of Article 1 of the Protocol annexed to the Convention on
jurisdiction and the enforcement of judgements in civil and commercial matters
signed at Lugano on September 16, 1988 the following party expressly and
specifically agrees in the terms of Clause 22.
for and on behalf of
▇▇▇▇▇ COMEX SEAWAY S.A.
_____________________
SCHEDULE 1
LIST OF BANKS AND PARTICIPATIONS
As of the 19th of December 1997 the following banks and financial institutions
(the "Banks") participate as lenders/participants in the floating rate loan
granted to the Borrower according to the terms set forth in the Facility
Agreement dated 19th of December, 1997 (the "Agreement")
NAME: PARTICIPATION:
----- --------------
USD 1000
MIDLAND BANK plc, ▇▇ - ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ 2BY 62,500
DEN NORSKE BANK ASA, ▇.▇.▇▇▇ 1171 Sentrum, N-0107 OSLO 62,500
