AGREEMENT
DATED ______, 2007
US$800,000,000
CREDIT FACILITY
FOR
GLOBAL SHIP LEASE INC
THE COMPANIES LISTED IN PART 1 OF SCHEDULE 1
AS ORIGINAL BORROWERS
WITH
FORTIS BANK (NEDERLAND) N.V.
CITIGROUP GLOBAL MARKETS LIMITED
HSH NORDBANK AG
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH
DNB NOR BANK ASA
AS MANDATED LEAD ARRANGERS
WITH
FORTIS BANK (NEDERLAND) N.V.
AS FACILITY AGENT
DATED ______, 2007
[LOGO] ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
CONTENTS
CLAUSE PAGE
1. Interpretation..........................................................................1
2. Facility and Purpose...................................................................23
3. Conditions Precedent...................................................................23
4. Utilisation............................................................................25
5. Repayment..............................................................................26
6. Prepayment and Cancellation............................................................27
7. Interest...............................................................................30
8. Terms..................................................................................31
9. Market Disruption......................................................................32
10. Taxes..................................................................................33
11. Increased Costs........................................................................36
12. Accounts...............................................................................37
13. Payments...............................................................................40
14. Representations........................................................................42
15. Information Covenants..................................................................47
16. General Covenants......................................................................49
17. Financial Covenants....................................................................65
18. Valuation..............................................................................68
19. Default................................................................................69
20. Security...............................................................................73
21. The Administrative Parties.............................................................75
22. Evidence and Calculations..............................................................80
23. Fees...................................................................................81
24. Indemnities and Break Costs............................................................81
25. Expenses...............................................................................84
26. Waiver of Consequential Damages........................................................84
27. Amendments and Waivers.................................................................84
28. Changes to the Parties.................................................................86
29. Disclosure of Information..............................................................88
30. Set-Off................................................................................89
31. Pro Rata Sharing.......................................................................89
32. Severability...........................................................................90
33. Counterparts...........................................................................90
34. Notices................................................................................91
35. Language...............................................................................92
36. Governing Law..........................................................................92
37. Enforcement............................................................................93
SCHEDULE PAGE
1. Original Parties.......................................................................94
Part 1 Original Borrowers and the Identified Vessels.................................94
Part 2 Other Identified Borrowers and Idenitified Vessels............................96
Part 3 Original Lenders..............................................................97
2. Initial Conditions Precedent Documents.................................................98
Part 1 Initial Conditions Precedent Documents........................................98
Part 2 Identified vessel condition precedent documents..............................101
Part 3 Additional Vessel Conditions Precedent.......................................105
3. Conditions Subsequent to Drawing......................................................109
4. Payments..............................................................................110
Part 1 Form of Request..............................................................110
Part 2 Payment Advice...............................................................111
5. Calculation of the Mandatory Cost.....................................................112
6. Form of Transfer Certificate..........................................................114
7. Compliance Certificate................................................................116
8. EBITDA to Debt Service Compliance Certificate.........................................117
Part 1 Compliance Certificate for a New Vessel which is not to be an
Additional Vessel............................................................117
Part 2 Compliance Certificate for Determination of Acceptable Charter...............118
Part 3 Compliance Certificate for Determination under the Borrowing Base............119
9. Acceptable Charterers.................................................................120
10. Approved Flag States..................................................................121
11. Form of Borrower Accession Agreement..................................................122
APPENDIX
1. Form of General Assignment............................................................123
2. Form of DPP...........................................................................124
3. Form of Swap Agreement Assignment.....................................................125
4. Form of Manager's Undertaking.........................................................126
5. Form of Retention Account Charge......................................................127
6. Form of Earnings Account and Operating Account Charge.................................128
7. Form of Mortgage......................................................................129
Part 1 Form of Cypriot Mortgage.....................................................129
Part 2 Form of Panamanian Mortgage..................................................129
8. Pledge of Shares......................................................................130
Part 1 Form of Cypriot Pledge.......................................................130
Part 2 Form of ▇▇▇▇▇▇▇▇ Islands Pledge..............................................130
Signatories....................................................................................131
THIS AGREEMENT is dated ______, 2007
BETWEEN:
(1) GLOBAL SHIP LEASE INC, a corporation incorporated according to the laws
of the Republic of the ▇▇▇▇▇▇▇▇ Islands with its registered office at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (the REPRESENTATIVE BORROWER);
(2) THE COMPANIES listed in Part 1 of Schedule 1, each of which is a
corporation or a limited liability company formed according to the law
of the country indicated against its name in Part 1 of Schedule 1, with
its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, for the ▇▇▇▇▇▇▇▇ Islands
Borrowers, at 16 Pantelis Catelaris Street, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ for the Cypriot Borrowers and at ▇▇▇/▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ for GSLS (each an ORIGINAL BORROWER and together
with the Representative Borrower, the ORIGINAL BORROWERS);
(3) FORTIS BANK (NEDERLAND) N.V., CITIGROUP GLOBAL MARKETS LIMITED, HSH
NORDBANK AG, DNB NOR BANK ASA AND SUMITOMO MITSUI BANKING CORPORATION,
BRUSSELS BRANCH as mandated lead arrangers (in this capacity the
MANDATED LEAD ARRANGERS);
(4) THE FINANCIAL INSTITUTIONS listed in Part 3 of Schedule 1 (Original
Parties) as original lenders (the ORIGINAL LENDERS); and
(5) FORTIS BANK (NEDERLAND) N.V. as facility agent and, in relation to the
Security Documents, security trustee (in this capacity the FACILITY
AGENT) of ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ acting for the
purpose of this Agreement through its office at Coolsingel 93, ▇.▇. ▇▇▇
▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
ACCEPTABLE CHARTER means:
(a) in respect of an Identified Vessel, the relevant Time Charter
listed in Part 1 of Schedule 1 or as the case may be, Part 2 of
Schedule 1 relating to such Identified Vessel, with charter
periods and charter rates detailed therein; or
(b) in respect of an Identified Vessel or in respect of an
Additional Vessel, at the time such time charter is entered into
or, as the case may be, at the time the Representative Borrower
notifies the Facility Agent the Vessel is to be designated an
Additional Vessel, a time charter with an Acceptable Charterer
which, when aggregated with other time charters in respect of
the Vessels and does not result in the EBITDA to Debt Service
Ratio being less than the Minimum EBITDA to Debt Service Ratio
on a forward-looking basis during the term of that time charter;
or
(c) any other time charter with an Acceptable Charterer as the
Facility Agent may agree (acting reasonably);
1
provided that no time charter will be an Acceptable Charter unless it is
in full force and effect and such time charter does not impose any
obligations such that:
(a) the Facility Agent is under any obligation or liability under
any such time charter or liable to make any payment under that
time charter; or
(b) the Facility Agent is obliged to enforce against any charterer
any term of any such time charter, or to make any enquiries as
to the nature or sufficiency of any payment received by the
Facility Agent.
ACCEPTABLE CHARTERER means CMA CGM, any CMA CGM Charterer whose
obligations under the relevant Time Charter are unconditionally and
irrevocably guaranteed by CMA CGM or any of the other charterers set out
in Schedule 9 (Acceptable Charterers) (as the same may be amended and
substituted from time to time in accordance with Clause 16.26(e)).
ACCOUNT BANK means Fortis Bank (Nederland) N.V. whose registered office
is situated at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ or any
other bank or financial institution with which, with the prior written
consent of the Facility Agent (acting in accordance with the
instructions of the Majority Lenders), the Accounts are at any time
held.
ACCOUNTS means together the Operating Accounts, the Earnings Accounts
and the Retention Account.
ADDITIONAL VESSEL means any new or used container vessel which:
(a) is a container vessel of standard design with a cargo capacity
of a least 750 TEU;
(b) is no more than 10 years old on its Delivery Date (as measured
from the date of delivery to its first owner from the shipyard
where it was constructed);
(c) will be from its Delivery Date, employed by way of Acceptable
Charter, and
in respect of which the Representative Borrower has notified the
Facility Agent that it wishes such vessel be designated as an Additional
Vessel.
ADMINISTRATIVE PARTY means the Mandated Lead Arrangers or the Facility
Agent.
AFFILIATE means a Subsidiary or a Holding Company of a person or any
other Subsidiary of that Holding Company.
AGREEMENT means this credit agreement, including any schedules or
appendices hereto, as amended from time to time.
APPLICABLE LAW means any or all applicable law (whether civil, criminal
or administrative), common law, statute, statutory instrument, treaty,
convention, regulation, directive, by-law, demand, decree, ordinance,
injunction, resolution, order, judgment, rule, permit, licence or
restriction (in each case having the force of law) and codes of practice
or conduct, circulars and guidance notes generally accepted and applied
by the global container shipping industry, in each case of any
government, quasi-government, supranational, federal, state or local
government, statutory or regulatory body, court, agency or association
relating to all laws, rules, directives and regulations, national or
international, public or private in any applicable jurisdiction from
time to time.
APPLICABLE TIME means,
2
(i) in respect of the Delivered Vessels or Subsequent Vessels,
either (x) if there is a drawing in respect of a Loan which
relates to such Subsequent Vessel or Delivered Vessel,
immediately following and on the date of such drawing or (y) if
there is no drawing, any date that falls within ten (10)
Business Days of the Delivery Date of that Subsequent Vessel or
Delivered Vessel (irrespective of whether a drawing is made in
respect of any Loan); or
(ii) in respect of any Additional Vessel, immediately following and
on the date of the drawing under the Loan for the financing of
such Additional Vessel or, as the case may be, at the time the
relevant vessel can first be considered to be an Additional
Vessel in accordance with Clause 3.1(i) (Conditions precedent).
APPROVED FLAG STATES means any of the flag states set out in Schedule 10
(Approved Flag States)(as the same may be amended and substituted from
time to time in accordance with Clause 16.14(b)).
APPROVED VALUERS means such independent reputable shipbrokers acceptable
to the Facility Agent (acting on the instructions of the Majority
Lenders).
ASSET PURCHASE AGREEMENT means the asset purchase agreement dated 31
October 2007 between the Representative Borrower as purchaser and CMA
CGM S.A., ▇▇▇▇▇▇ S.A.S., SNC PACIFIC I and SNC PACIFIC II.
ASSET PURCHASE BUSINESS DAY means any day other than a Saturday, Sunday
or any statutory holiday on which banks in France, England and Cyprus
are required to close.
AVAILABILITY PERIOD means the period from and including the Closing
Date, to and including the Final Maturity Date.
BOOKRUNNERS means together Fortis Bank (Nederland) N.V. and Citibank
International Plc.
BORROWER means:
(a) an Original Borrower; or
(b) any person which becomes a party to this Agreement as a Borrower
after the date of this Agreement pursuant to Clause 28.7
(Accession of a Borrower) (including any entity which is the
owner of an Additional Vessel or an Identified Vessel and which
is not an Original Borrower);
irrespective of whether such person makes a drawing under this Facility.
BORROWING BASE means, as at any date of determination, the applicable
Relevant Percentage of the aggregate of the latest Market Values of each
of the Vessels over which the Facility Agent holds a Mortgage plus the
value attributed to any additional security provided in accordance with
Clause 16.15(b) from time to time (such value, other than the cash, to
be determined by the Facility Agent), plus the cash standing to the
credit of the Retention Account provided always that (i) any cash
standing to the credit of the Retention Account which is required to
service interest accruing on the Facility and payable on the next
Interest Payment Date shall be excluded for this purpose and (ii) any
cash standing to the credit of the Retention Account in excess of the
aggregate of that required to service interest accruing on the Facility
and that required to pay a Facility Reduction Amount which is included
shall not be removed from the Retention Account until at least the next
date upon which the Borrowing Base is determined, and further provided
always that:
(i) any Vessel which is not subject to an Acceptable Charter or in
respect of which the Acceptable Charter has expired or
terminated and the relevant Borrower has not either (A)
3
extended the term of such Time Charter on terms satisfactory to
the Facility Agent (acting on the instructions of the Majority
Lenders, acting reasonably) or (B) entered into a substitute
Acceptable Charter on or before (x) in the case of expiry of an
Acceptable Charter, the date falling one month prior to the
expiry of such Acceptable Charter or (y) in the case of
termination of an Acceptable Charter, the date falling two
months after the termination of such Acceptable Charter, shall
be excluded for so long as such Vessel is not subject to an
Acceptable Charter
(ii) in relation to a determination made in connection with a
drawdown of a Loan to be used to finance or refinance the cost
of a vessel which is to become a Vessel and over which the
Facility Agent is to be granted a Mortgage, such vessel shall be
included in the Borrowing Base.
BORROWER ACCESSION AGREEMENT means the agreement by which an entity
accedes to this Agreement in the form set out in Schedule 11.
BREAK COSTS means the amount (if any) which (i) a Lender is entitled to
receive under Clause 24.3(b) (Break Costs) or, (ii) any Swap Bank is
entitled to received under clause 24.3(c) (Break Costs) hereof.
BUSINESS DAY means a day (other than a Saturday or a Sunday) on which
banks are open for general business in London, England, Amsterdam, The
Netherlands, New York, the United States of America and Hamburg,
Germany.
CHANGE OF CONTROL means, at any time following the IPO, the acquisition,
directly or indirectly, by any person or group or combination of
persons, acting together, other than CMA CGM of beneficial ownership of
more than fifty one (51) per cent. of the aggregate outstanding voting
power of the equity interests of the Representative Borrower without the
prior written consent of the Facility Agent (acting on the instructions
of the Majority Lenders).
CHARTER GUARANTEE means:
(a) in relation to each of the Identified Vessels chartered to a CMA
CGM Charterer, the guarantee provided or to be provided by CMA
CGM in favour of the relevant Borrower; and
(b) in relation to any Additional Vessel, the guarantee (if any) in
form and substance satisfactory to the Facility Agent (acting on
the instructions of the Majority Lenders).
CHARTERERS means, in respect of a Vessel, CMA CGM, any CMA CGM Charterer
and any Acceptable Charterer from time to time of such Vessel, and
CHARTERER means any of them.
CLOSING DATE means the closing date of the IPO.
CMA CGM means CMA CGM S.A.
CMA CGM CHARTERER means any wholly owned Subsidiary of CMA CGM.
COMMITMENT means:
(a) for an Original Lender, the aggregate amount set opposite its
name in Part 3 of Schedule 1 (Original Parties) under the
heading COMMITMENTS and the amount of any other commitment to
advance funds under this Agreement it acquires; and
4
(b) for any other Lender, the amount of any commitment to advance
funds under this Agreement it acquires,
to the extent not cancelled, transferred or reduced under this
Agreement.
COMPLIANCE CERTIFICATE means the form of certificate attached at
Schedule 7 (Compliance Certificate).
CONFIDENTIALITY UNDERTAKING means a confidentiality undertaking
substantially in a form agreed between the Representative Borrower and
the Facility Agent.
DATE OF TOTAL LOSS means, in respect of a Vessel, the date of Total Loss
of that Vessel which date shall be deemed to have occurred:
(a) in the case of an actual total loss, on the actual date and at
the time that Vessel was lost or, if such date is not known, on
the date on which that Vessel was last reported;
(b) in the case of a constructive total loss, upon the date and at
the time notice of abandonment is given to the Insurers for the
time being (provided a claim for total loss is admitted by such
Insurers) or, if such Insurers do not forthwith admit such a
claim, at the earliest of the date and time at which either a
total loss is subsequently admitted by the Insurers or the date
and time of a judgement by a competent court of law or
arbitration tribunal that a Total Loss occurred;
(c) in the case of a compromised, agreed or arranged total loss, on
the date upon which a binding agreement as to such compromised,
agreed or arranged total loss has been entered into by the
Insurers;
(d) in the case of requisition for title or other compulsory
acquisition, on the date upon which the relevant requisition for
title or other compulsory acquisition occurs; and
(e) in the case of capture, seizure, arrest, detention, requisition
for hire or confiscation by any government or by persons acting
or purporting to act on behalf of any government or by any other
person which deprives the relevant Borrower or as the case may
be, the relevant Charterer of the use of that Vessel for more
than ninety(90) days, upon the expiry of the period of ninety
(90) days after the date upon which the relevant capture,
seizure, arrest, detention, requisition or confiscation
occurred.
DEFAULT means:
(a) an Event of Default; or
(b) an event which would be (with the expiry of a grace period, the
giving of notice or the making of any determination under the
Finance Documents or any combination of them) an Event of
Default.
DELIVERED VESSELS means each vessel to be acquired by each relevant
Borrower within 10 Asset Purchase Business Days of the Closing Date
being some or all of the vessels listed under the heading DELIVERED
VESSELS in Part 1 of Schedule 1 (Original Parties).
DELIVERY DATE means, in respect of a Delivered Vessel or a Subsequent
Vessel, the date of actual delivery of that Delivered Vessel or
Subsequent Vessel to the relevant Borrower and, in respect of an
Additional Vessel, the date of actual delivery of that Additional Vessel
to the relevant Borrower
5
or, as the case may be, the date the Vessel can first be considered to
be an Additional Vessel in accordance with Clause 3.1(h) (Conditions
precedent).
DOLLARS or US$ means the lawful currency for the time being of the
United States of America.
DPP means the deed of proceeds and priorities in the form attached at
Appendix 2 to be entered into between (inter alios) the Facility Agent,
the Borrowers, the Swap Banks and the Account Bank.
EARNINGS means, in respect of a Vessel, all present and future moneys
and claims which are earned by or become payable to or for the account
of the relevant Borrower in connection with the operation or ownership
of that Vessel and including but not limited to:
(a) freights, passage and hire moneys (howsoever earned);
(b) remuneration for salvage and towage services;
(c) demurrage and detention moneys;
(d) all moneys and claims in respect of the requisition for hire of
that Vessel;
(e) payments received in respect of any off-hire insurance; and
(f) payments received pursuant to any Charter Guarantee relating to
that Vessel.
EARNINGS ACCOUNT means each bank account opened by the relevant Borrower
with the Account Bank and designated "[Name of owner] - Earnings
Account".
EARNINGS ACCOUNT AND OPERATING ACCOUNT CHARGE means each charge, in the
form of Appendix 6, relating to an Earnings Account and an Operating
Account granted or to be granted by the relevant Borrower to the
Facility Agent together with any and all notices and acknowledgements
entered into in connection therewith.
EBITDA TO DEBT SERVICE COMPLIANCE CERTIFICATE means a certificate in the
relevant form attached at Schedule 8 (EBITDA to Debt Service Compliance
Certificate).
EBITDA TO DEBT SERVICE RATIO means the ratio of EBITDA to Debt Service:
(a) as determined for the relevant Measurement Period for the
purposes of calculating the Financial Covenants; and
(b) for the purposes (i) of determining what is an Acceptable
Charter, (ii) Clauses 3.1(a) and 3.4 determined as follows:
(i) on a forward looking basis (1) for the life of the
relevant charter for the purposes of the calculation
within the definition of Acceptable Charter or (2) for
the life of the Facility for the purposes of Clauses
3.1(a) and 3.4;
(ii) taking into account only the Earnings of the Vessels as
at the date of calculation (1) including the relevant
vessel for purposes of the calculation within the
definition of Acceptable Charter and (2) including all
Vessels for the purposes of Clause 3.4 and (3) not
including the relevant New Vessel for the purposes of
Clause 3.1(a);
(iii) taking into account only the Debt Service on the lower
of (x) the Borrowing Base at that time (calculated (1)
including the relevant vessel for purposes of the
calculation within the definition of Acceptable Charter,
(2) not including the relevant New
6
Vessel for the purposes of Clause 3.1(a), (3) including
all Vessels for the purposes of Clause 3.4 and (4)
excluding any cash included in the Borrowing Base) based
on the most recent valuations and (y) the aggregate of
the Total Commitments having regard to the provisions of
Clause 6.5 (Automatic cancellation); and
(iv) on the assumption that any time charter in respect of
any relevant Vessel which expires (1) during the term of
the proposed new time charter in the case of the
definition of Acceptable Charter or (2) prior to the
Final Maturity Date in the case of Clause 3.1(a) and
3.4, shall be extended on the same charter rates or such
other rates as the Facility Agent and the Representative
Borrower agree taking into account the term and rates of
the expiring time charter and the charter market at such
time or if the current charter has expired, taking into
account the new charter rates.
ENVIRONMENT means:
(a) any land including, without limitation, surface land and
sub-surface strata, sea bed or river bed under any water (as
referred to below) and any natural or man-made structures;
(b) water including, without limitation, coastal and inland waters,
surface waters, ground waters and water in drains and sewers;
and
(c) air including, without limitation, air within buildings and
other natural or man-made structures above or below ground.
ENVIRONMENTAL AFFILIATE means the Borrowers and the Manager together
with their respective employees and all of those persons for whom the
Borrowers or the Manager is responsible under any Applicable Law in
respect of any activities undertaken in relation to any of the Vessels.
ENVIRONMENTAL APPROVALS means any permit, licence, approval, ruling,
variance, exemption or other authorisation required under applicable
Environmental Laws.
ENVIRONMENTAL CLAIM means any claim by any person or persons or any
governmental, judicial or regulatory authority which arises out of any
breach, contravention or violation of Environmental Law or of the
existence of any liability or potential liability arising from such
breach, contravention or violation or the presence of Hazardous Material
in contravention of Environmental Laws. In this context, claim means: a
claim for damages, compensation, fines, penalties or any other payment
of any kind whether or not similar to the foregoing; an order or
direction to take, or not to take, certain action or to desist from or
suspend certain action by any governmental, judicial or regulatory
authority; and any form of enforcement or regulatory action.
ENVIRONMENTAL LAWS means any or all Applicable Law relating to or
concerning:
(a) pollution or contamination of the Environment, any ecological
system or any living organisms which inhabit the Environment or
any ecological system;
(b) the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport or
handling of Hazardous Materials; and
(c) the emission, leak, release, spill or discharge into the
Environment of noise, vibration, dust, fumes, gas, odours,
smoke, steam, effluvia, heat, light, radiation (of any kind),
infection, electricity or any Hazardous Material and any matter
or thing capable of constituting a nuisance or an actionable
tort or breach of statutory duty of any kind in respect of such
matters,
7
including, without limitation, the following laws of the United States
of America: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990, as
amended, the Resource Conservation and Recovery Act, as amended, and the
Toxic Substances Control Act, as amended, together, in each case, with
the regulations promulgated and the guidance issued pursuant thereto.
EVENT OF DEFAULT means an event specified as such in Clause 19 (Default)
of this Agreement.
EXCESS RISKS means, in respect of a Vessel:
(a) the proportion of claims for general average, salvage and
salvage charges which are not recoverable as a result of the
value at which that Vessel is assessed for the purpose of such
claims exceeding her hull and machinery insured value; and
(b) collision liabilities not recoverable in full under the hull and
machinery insurance by reason of those liabilities exceeding
such proportion of the insured value of that Vessel as is
covered by the hull and machinery insurance.
FACILITY means the revolving credit facility made available under this
Agreement.
FACILITY OFFICE means in respect of a Lender, the office through which
that Lender will perform its obligations under this Agreement from time
to time, which at the date of this Agreement is the address shown for
such Lender in Part 3 of Schedule 1 (Original Parties) or such other
address as a Lender may notify to the Facility Agent from time to time.
FACILITY REDUCTION DATE means each of the twelve (12) consecutive
quarterly dates referred to in Clause 6.5 (Automatic cancellation).
FACILITY REDUCTION RETENTION PERIOD means, each of the consecutive
periods commencing in the case of the first such period, four years and
nine months from the Closing Date and, in the case of each other such
period, on a Facility Reduction Date and ending on the next Facility
Reduction Date or, in the case of the final such period, the Final
Maturity Date.
FEE LETTER means any letter entered into by reference to this Agreement
between one or more Administrative Parties and the Representative
Borrower setting out the amount of certain fees referred to in this
Agreement.
FINAL MATURITY DATE means the eighth anniversary of the Closing Date.
FINANCE DOCUMENT means:
(a) this Agreement;
(b) the DPP;
(c) each Security Document;
(d) each Swap Agreement;
(e) each Fee Letter;
(f) each Manager's Undertaking;
(g) a Transfer Certificate; and
8
(h) any other document designated as such by the Facility Agent and
the Representative Borrower.
FINANCE PARTY means a Lender, a Swap Bank or an Administrative Party.
FINANCIAL INDEBTEDNESS means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any acceptance credit;
(c) any bond, note, debenture, loan stock or other similar
instrument;
(d) any redeemable preference share;
(e) any agreement treated as a finance or capital lease in
accordance with U.S. GAAP;
(f) receivables sold or discounted (otherwise than on a non-recourse
basis);
(g) the acquisition cost of any asset to the extent payable after
its acquisition or possession by the party liable where the
deferred payment is arranged primarily as a method of raising
finance or financing the acquisition of that asset;
(h) any derivative transaction protecting against or benefiting from
fluctuations in any rate or price (and, except for non-payment
of an amount, the then ▇▇▇▇ to market value of the derivative
transaction will be used to calculate its amount);
(i) any other transaction (including any forward sale or purchase
agreement) which has the commercial effect of a borrowing;
(j) any counter-indemnity obligation in respect of any guarantee,
indemnity, bond, letter of credit or any other instrument issued
by a bank or financial institution; or
(k) any guarantee, indemnity or similar assurance against financial
loss of any person.
FIXED RATE means the fixed rate of interest payable by the Borrowers to
the Swap Banks under and in accordance with the terms of the Swap
Agreements.
GENERAL ASSIGNMENT means, in respect of a Vessel, the assignment of the
Time Charter, the Earnings, the Management Agreement, any Charter
Guarantee, the Requisition Compensation and the Obligatory Insurances
granted or to be granted in favour of the Facility Agent by the relevant
Borrower substantially in the form of Appendix 1 together with any and
all notices and acknowledgements entered into in connection therewith.
GSLS means Global Ship Lease Services Limited (Company No. 06285694) a
company incorporated in England and Wales, whose registered address is
▇▇▇/▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
HAZARDOUS MATERIAL means any element or substance, whether natural or
artificial, and whether consisting of gas, liquid, solid or vapour,
whether on its own or in any combination with any other element or
substance, which is listed, identified, defined or determined by any
Environmental Law or other Applicable Law to be, to have been, or to be
capable of being or becoming harmful to mankind or any living organism
or damaging to the Environment, including, without limitation, oil (as
defined in the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended).
9
HEDGED PORTION means the amount equal to at least 50 per cent. of the
amount of outstanding principal payable under the Facility.
HOLDING COMPANY means:
(a) in relation to a company incorporated in England and Wales, a
holding company within the meaning of section 736 of the
Companies ▇▇▇ ▇▇▇▇; and
(b) in relation to a company or other person incorporated or formed
outside England and Wales, a company or other person of which
such company is the Subsidiary.
IDENTIFIED VESSELS means each Delivered Vessel and each Subsequent
Vessel.
INCREASED COST means:
(a) an additional or increased cost;
(b) a reduction in the rate of return under a Finance Document or on
its overall capital; or
(c) a reduction of an amount due and payable under any Finance
Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates but only to the extent attributable to that Finance Party
having entered into any Finance Document or funding or performing its
obligations under any Finance Document.
INSURERS means the underwriters or insurance companies with whom any
Obligatory Insurances are effected and the managers of any protection
and indemnity or war risks association in which any of the Vessels may
at any time be entered.
INTEREST PAYMENT DATE has the meaning given to such term in Clause 7.2
(Payment of Interest).
IPO means an initial public offering of the common shares of the
Representative Borrower.
ISM CODE means the International Safety Management Code (including the
guidelines on its implementation), adopted by the International Maritime
Organization Assembly as Resolutions A.741(18) and A.788(19), as the
same may have been or may be amended or supplemented from time to time.
The terms "safety management system", "Safety Management Certificate",
"Document of Compliance" and "major non-conformity" shall have the same
meanings as are given to them in the ISM Code.
ISPS CODE means the International Ship and Port Facility Security Code
adopted by the International Maritime Organization Assembly as the same
may have been or may be amended or supplemented from time to time.
ITA means the Income Tax ▇▇▇ ▇▇▇▇.
LENDER means:
(a) an Original Lender; or
(b) any person which becomes a party to this Agreement after the
date of this Agreement pursuant to Clause 28.2 (Assignments and
transfers by Lenders);
and LENDERS means all of them.
10
LEVERAGE RATIO means, as at any date of determination, the ratio of the
aggregate amount outstanding under the Facility net of cash held by the
Borrower in the Retention Account divided by the latest aggregate Market
Value of the Vessels (plus the value attributed to any additional
security provided below as determined by the Facility Agent from time to
time) provided always that (i) any cash standing to the credit of the
Retention Account which is required to service interest accruing on the
Facility and payable on the next Interest Payment Date shall not be
netted off for this purpose and (ii) any cash standing to the credit of
the Retention Account in excess of the aggregate of that required to
service interest accruing on the Facility and that required to pay a
Facility Reduction Amount which is netted off shall not be removed from
the Retention Account until at least the next date upon which the
Leverage Ratio is determined, and (iii) any Vessel which is not subject
to an Acceptable Charter or in respect of which the Acceptable Charter
has expired or terminated and the relevant Borrower has not either (A)
extended the term of such Time Charter on terms satisfactory to the
Facility Agent (acting on the instructions of the Majority Lenders,
acting reasonably) or (B) entered into a substitute Acceptable Charter
on or before (x) in the case of expiry of an Acceptable Charter, the
date falling one month prior to the expiry of such Acceptable Charter or
(y) in the case of termination of an Acceptable Charter, the date
falling two months after the termination of such Acceptable Charter,
shall be excluded for so long as such Vessel is not subject to an
Acceptable Charter.
LIBOR means for a Term of any Loan or overdue amount:
(a) the applicable Screen Rate; or
(b) if no Screen Rate is available for the relevant currency or Term
of that Loan or overdue amount, the arithmetic mean (rounded
upward to four decimal places) of the rates, as supplied to the
Facility Agent at its request, quoted by the Reference Banks to
leading banks in the London interbank market,
as of 11.00 a.m. on the Rate Fixing Day for the offering of deposits in
the currency of that Loan or overdue amount for a period comparable to
that Term.
LOAN means, unless otherwise stated in this Agreement, the principal
amount of each borrowing under this Agreement or the principal amount
outstanding of that borrowing.
LONDON BUSINESS DAY means a day (other than a Saturday or a Sunday) on
which banks are open for business in London.
LOSSES means each and every liability, loss, charge, claim, demand,
action, proceeding, damage, judgment, order or other sanction,
enforcement, penalty, fine, fee, commission, interest, lien, salvage,
general average, cost and expense of whatsoever nature suffered or
incurred by or imposed on any of the Finance Parties.
MAJORITY LENDERS means Lenders:
(a) whose share in the outstanding Loans and whose undrawn
Commitments then aggregate 66 2/3 per cent. or more of the
aggregate of all the outstanding Loans and the undrawn
Commitments of all the Lenders;
(b) if there is no Loan then outstanding, whose undrawn Commitments
then aggregate 66 2/3 per cent. or more of the Total
Commitments; or
(c) if there is no Loan then outstanding and the Total Commitments
have been reduced to zero, whose Commitments aggregated 66 2/3
per cent. or more of the Total Commitments immediately before
the reduction.
11
MANAGEMENT AGREEMENT means, in respect of a Vessel, the management
agreement dated on or prior to the Delivery Date of such Vessel between
the relevant Borrower being the owner of such Vessel and the Manager or
such other management agreement entered into from time to time between
the Manager and the relevant Borrower.
MANAGER means CMA CGM, or any of its wholly owned Subsidiaries, or such
other professional manager or managers as may be approved by the
Facility Agent (acting in accordance with the instructions of the
Majority Lenders) from time to time.
MANAGER'S UNDERTAKING means a letter of undertaking in the form set out
in Appendix 4 to be issued by the Manager to the Facility Agent
confirming it shall not make a claim to security ranking ahead of the
Lenders' security in respect of a Vessel in form and substance
satisfactory to the Facility Agent.
MANDATORY COST means the properly evidenced cost of complying with any
applicable regulatory requirements of the Bank of England, the Financial
Services Authority, the European Central Bank or any other relevant
regulatory authority, expressed as a percentage rate per annum and
calculated by the Facility Agent under Schedule 5 (Calculation of the
Mandatory Cost).
MARGIN means, on any date, the rate (expressed as a percentage rate per
annum) set out in the second column below opposite the number (expressed
as a percentage) which represents the Leverage Ratio as tested pursuant
to Clause 16.15(Partial prepayment or additional security) for the
immediately preceding date of determination:
------------------------------------------------------------------------
LEVERAGE RATIO (%) MARGIN (% RATE PER ANNUM)
------------------------------------------------------------------------
up to 50 0.75
------------------------------------------------------------------------
50.01 per cent. to 60 (inclusive) 0.80
------------------------------------------------------------------------
60.01 per cent. to 70 (inclusive) 0.90
------------------------------------------------------------------------
70.01 per cent. and above 1.10
------------------------------------------------------------------------
MARKET VALUE means, in respect of a Vessel, the market value of that
Vessel calculated in accordance with Clause 18 (Valuation).
MATERIAL ADVERSE EFFECT means a material adverse effect on:
(a) the business, prospects or financial condition of the Borrowers
as a group;
(b) the ability of the Borrowers as a group to perform all of their
payment obligations under any Finance Document;
(c) the validity or enforceability of, or the effectiveness or
ranking of any Security Interest granted or purported to be
granted pursuant to, any Finance Document other than illegality
such that the Finance Parties would not have entered into this
Agreement had such illegality been prevailing at that time; or
(d) any material right or remedy of a Finance Party in respect of a
Finance Document of such significance that the Finance Parties
would not have entered into this Agreement had such material
adverse effect been prevailing at the date of this Agreement.
12
MATURITY DATE means, in respect of a Loan, the last day of the Term of
that Loan.
MAXIMUM AVAILABLE FACILITY AMOUNT means at any time the lower of:
(a) the Borrowing Base; and
(b) the Total Commitments
at such time.
MEASUREMENT PERIOD means, at any time, the last four (4) fiscal quarters
for the relevant Borrower or until four (4) fiscal quarters have elapsed
from the Closing Date, the period from the date of this Agreement until
the date of determination.
MINIMUM EBITDA TO DEBT SERVICE RATIO means an EBITDA to Debt Service
Ratio of 1.10 to 1.
MORTGAGE means, in respect of a Vessel, the first priority ship mortgage
and, if relevant, deed of covenants to be given by the relevant Borrower
in favour of the Facility Agent, (i) in respect of each of the Delivered
Vessels, on the Delivery Date, and (ii) in respect of each Subsequent
Vessel and any Additional Vessel, on the Delivery Date of that Vessel in
form and substance satisfactory to the Facility Agent (acting on the
instructions of the Lenders) having regard to the legal requirements in
the relevant Approved Flag State.
NEW VESSEL means any new or used container vessel to be acquired by a
Borrower (other than an Identified Vessel).
OBLIGATORY INSURANCES means in respect of each Vessel:
(a) all contracts and policies of insurance and all entries in clubs
and/or associations which are from time to time required to be
effected and maintained in accordance with this Agreement in
respect of such Vessel; and
(b) all benefits under the contracts, policies and entries under
paragraph (a) above and all claims in respect of them and the
return of premiums.
OPENING BALANCE SHEET means the unaudited opening balance sheet
prepared, in respect of the Representative Borrower for 30 June 2007 and
in respect of the other Borrowers at or around the date of this
Agreement.
OPERATING ACCOUNT means each bank account opened by the relevant
Borrower, with the Account Bank and designated "Name of Owner- Operating
Account".
OPERATING EXPENSES means, in relation to a Vessel, expenses incurred by
the relevant Borrower owning that Vessel, in connection with the
operation, employment, maintenance, repair and insurance of that Vessel,
including any fees which the relevant Borrower may be required to pay
pursuant to the relevant Management Agreement, the cost of maintaining
Obligatory Insurances and other insurances maintained for that Vessel
and payment of Tax properly payable by the relevant Borrower in respect
of that Vessel.
OTHER VESSEL means any New Vessel which either (i) does not qualify as
an Additional Vessel or (ii) the Representative Borrower has not
requested be designated an Additional Vessel in accordance with Clause
3.1(h) (Conditions precedent).
PARTY means a party to this Agreement or any Finance Document.
13
PERMITTED LIENS means, in respect of a Vessel:
(a) Security Interests created by the Security Documents;
(b) liens for unpaid crew's wages including wages of the master and
stevedores employed by that Vessel, outstanding in the ordinary
course of trading for not more than one calendar month after the
due date for payment;
(c) liens for salvage;
(d) liens for classification or scheduled dry docking or for
necessary repairs to that Vessel whose aggregate cost does not
exceed US$1,000,000, at any one time in respect of that Vessel,
provided always that only uninsured costs shall be taken into
account if the Facility Agent has received evidence reasonably
satisfactory to it that the relevant Insurers have agreed to
cover the balance of the costs of such drydocking or repairs,;
(e) liens for collision;
(f) liens for master's disbursements incurred in the ordinary course
of trading; and
(g) statutory and common law liens of carriers, warehousemen,
mechanics, suppliers, materials men, repairers or other similar
liens, including maritime liens, in each case arising in the
ordinary course of business, outstanding for not more than one
month whose aggregate value does not exceed US$500,000,
in the case of paragraphs (b) to (g) inclusive provided that the amounts
which give rise to such liens are paid within one month of becoming due
or, if not so paid are being disputed in good faith by appropriate
proceedings (and for the payment of which adequate reserves or security
are at the relevant time maintained or provided), provided further that
such proceedings, whether by payment of adequate security into Court or
otherwise, do not give rise to a material risk of the relevant Vessel or
any interest therein being seized, sold, forfeited or otherwise lost or
of criminal liability on the Facility Agent.
PLEDGE OF SHARES means each of the pledges of the issued share capital
of each Borrower (other than the Representative Borrower) granted by the
Representative Borrower in favour of the Facility Agent, together with
any and all notices and acknowledgements and other ancillary documents
entered into in connection therewith in the form set out in Appendix
8Part 1 of Appendix 8 or Appendix 8Part 2 of Appendix 8.
PRO RATA SHARE means:
(a) for the purpose of determining a Lender's share in a utilisation
of the Facility, the proportion which its Commitment bears to
the Total Commitments; and
(b) for any other purpose on a particular date:
(i) the proportion which a Lender's share of the Loans (if
any) bears to all the Loans;
(ii) if there is no Loan outstanding on that date, the
proportion which its Commitment bears to the Total
Commitments on that date; or
if the Total Commitments have been cancelled, the proportion which its
Commitment bore to the Total Commitments immediately before being
cancelled.
14
QUALIFYING LENDER means a Lender which is beneficially entitled to
interest payable to that Lender in respect of an advance under a Finance
Document and is:
(a) a Lender:
(i) which is a bank (as defined for the purposes of Section
879 of the ITA) making an advance under a Finance
Document; or
(ii) in respect of an advance made under a Finance Document
by a person that was a bank (as defined for the purposes
of section 879 of the ITA) at the time that the advance
was made,
and which is within the charge to United Kingdom corporation tax
as respects any payments of interest made in respect of that
advance; or
(b) a Lender which is:
(i) a company resident in the United Kingdom for United
Kingdom tax purposes; or
(ii) a partnership each member of which is:
(A) a company so resident in the United Kingdom; or
(B) a company not so resident in the United Kingdom
which carries on a trade in the United Kingdom
through a permanent establishment and which
brings into account in computing its chargeable
profits (for the purposes of section 11(2) of
the Taxes Act) the whole of any share of
interest payable in respect of that advance that
falls to it by reason of sections 114 and 115 of
the Taxes Act; or
(iii) a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a
permanent establishment and which brings into account
interest payable in respect of that advance in computing
the chargeable profits (for the purposes of section
11(2) of the Taxes Act) of that company; or
(c) a Treaty Lender.
RATE FIXING DAY means two (2) London Business Days before the first day
of a Term, or unless market practice differs in the London interbank
market for Dollars, in which case the Rate Fixing Day will be determined
by the Facility Agent in accordance with market practice in the London
interbank market (and if quotations would normally be given by leading
banks in the London interbank market on more than one day, the Rate
Fixing Day will be the last of those days).
REFERENCE BANKS means Fortis Bank (Nederland) N.V., Citibank
International Plc and HSH Nordbank AG and any other bank or financial
institution appointed as such by the Facility Agent (acting on the
instructions of the Majority Lenders) under this Agreement.
RELATED CONTRACTS means any or all of the following (as the context
requires):
(a) the Time Charters;
(b) the Management Agreements; and
(c) the Charter Guarantees.
15
RELEASE means an emission, spill, release or discharge into or upon the
air, surface water, groundwater, or soils of any Hazardous Materials for
which any Borrower or the Manager has any liability under Environmental
Law, except in accordance with a valid Environmental Approval.
RELEVANT PERCENTAGE means at any time 70 per cent or such lower
percentage as may then apply having regard to the provisions of Clause
3.4.
REQUEST means a request made by a Borrower for a Loan, substantially in
the form of Part 1 of Schedule 4 (Form of Request).
REQUIRED INSURANCE AMOUNT means, in respect of a Vessel, 110 per cent.
of the proportion of the aggregate principal amount of the outstanding
Loans which is equal to the proportion that the latest Market Value of
that Vessel bears to the aggregate of the latest Market Values of all of
the Vessels actually delivered and over which the Facility Agent holds a
Mortgage.
REQUISITION COMPENSATION means, in respect of a Vessel, all moneys or
other compensation payable by reason of requisition for title to, or
other compulsory acquisition of, that Vessel.
RETENTION ACCOUNT means the bank account to be opened by the
Representative Borrower with the Account Bank and designated "Retention
Account".
RETENTION ACCOUNT CHARGE means the fixed charge or, as the case may be,
pledge in respect of all monies standing to the credit from time to time
of the Retention Account granted or to be granted by the Representative
Borrower in favour of the Facility Agent on or about the date of this
Agreement, together with any and all notices and acknowledgements
entered into in connection therewith in the form set out in Appendix 5.
RETENTION PERIOD means, in respect of a Loan, each period commencing in
the case of the first such period, on the Utilisation Date of that Loan
and, in the case of each other such period, on an Interest Payment Date
in respect of that Loan and ending on the next such Interest Payment
Date or, in the case of the final such period, the Final Maturity Date.
ROLLOVER LOAN means one or more Loans:
(a) to be made on the same day that a maturing Loan is due to be
repaid in accordance with Clause 5.1(a) (Repayment);
(b) the aggregate of which is equal to or less than the maturing
Loan; and
(c) to be made for the purposes of refinancing a maturing Loan.
SCREEN RATE means the British Bankers Association Interest Settlement
Date for the relevant currency and Term displayed on the appropriate
page of the Reuters screen selected by the Facility Agent. If the
relevant page is replaced or the service ceases to be available, the
Facility Agent may specify another page or service displaying the
appropriate rate.
SECURED LIABILITIES means all present and future obligations and
liabilities (actual or contingent) of the Borrowers to the Finance
Parties or any of them under or in connection with any Finance Document.
SECURITY AGREEMENTS means:
(a) the Mortgages;
16
(b) the Pledges of Shares;
(c) the General Assignments;
(d) the Earnings Account and Operating Account Charges;
(e) the Retention Account Charge; and
(f) the Swap Agreement Assignments;
(g) any other document designated as such in writing by the
Representative Borrower and the Facility Agent.
SECURITY ASSETS means any asset which is the subject of a Security
Interest created by a Security Document and any interest or profit in
respect of an investment in accordance with Clause 20.5 (Investments).
SECURITY DOCUMENT means:
(a) each Security Agreement; and
(b) any other document evidencing or creating security over any
asset of a Borrower to secure any obligation of any Borrower to
the Finance Parties or any of them under the Finance Documents.
SECURITY INTEREST means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement or arrangement
having a similar effect.
S & P means Standard & Poor's Ratings Group and any successor thereto.
SUBSEQUENT VESSELS means each vessel scheduled to be acquired by a
Borrower on their respective delivery dates, being some or all of the
vessels listed under the heading SUBSEQUENT VESSELS in Part 1 of
Schedule 1 (Original Parties).
SUBSIDIARY means:
(a) in respect of a person incorporated in England and Wales:
(i) a subsidiary within the meaning of section 1159 of the
Companies ▇▇▇ ▇▇▇▇; and
(ii) unless the context otherwise requires, a subsidiary
undertaking within the meaning of section 1295 of the
Companies ▇▇▇ ▇▇▇▇; and
(b) in respect of a person incorporated or formed outside England
and Wales, an entity of which a person has direct or indirect
control or owns directly or indirectly more than 50% of the
voting capital or similar right of ownership and control for
this purpose means the power to direct the management and the
policies of the entity whether through the ownership of voting
capital, by contract or otherwise.
SWAP AGREEMENTS means each ISDA Master Agreement, schedule and
confirmation entered into between a Swap Bank or the Swap Banks and a
Borrower or Borrowers or any other hedging arrangement entered into
between a Swap Bank or the Swap Banks, and a Borrower or Borrowers, in
connection with interest payable under this Agreement
17
SWAP AGREEMENTS ASSIGNMENT means the assignment of the Swap Agreements,
in the form attached at Appendix 3 entered or to be entered into on or
before the Closing Date.
SWAP BANKS any person party to the DPP from time to time , in its
capacity as a swap bank.
SWAP COSTS means any amount payable by any Borrower under a Swap
Agreement except for any Swap Termination Payment.
SWAP TERMINATION PAYMENT means any sums payable or owing by any Borrower
to any Swap Bank under or in connection with an Event of Default (as
that term is defined in any Swap Agreement) or Termination Event (as
that term is defined in any Swap Agreement) or the occurrence of an
Early Termination Date (as that term is defined in any Swap Agreement)
pursuant to any Swap Agreement whether or not matured and whether or not
liquidated.
TAX means any tax, levy, impost, duty or other charge or withholding of
a similar nature (including, without limitation, any penalty or interest
payable in connection with any failure to pay or any delay in paying any
of the same).
TAX DEDUCTION means a deduction or withholding for or on account of Tax
made from a payment under a Finance Document.
TAXES ACT means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
TAX CONFIRMATION means a confirmation by a Lender that the person
beneficially entitled to interest payable to that Lender in respect of
an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax
purposes; or
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a
permanent establishment and which brings into account in
computing its chargeable profits (for the purposes of
section 11(2) of the Taxes Act) the whole of any share
of interest payable in respect of that advance that
falls to it by reason of sections 114 and 115 of the
Taxes Act; or
(c) a company not so resident in the United Kingdom which carries on
a trade in the United Kingdom through a permanent establishment
and which brings into account interest payable in respect of
that advance in computing the chargeable profits (for the
purposes of section 11(2) of the Taxes Act) of that company.
TAX PAYMENT means either the increase in a payment made by a Borrower to
a Finance Party under Clause 10.1 (Tax Gross-Up) or a payment under
Clause 10.2 (Tax Indemnity).
TERM means each period determined under this Agreement by reference to
which interest payable on a Loan or an overdue amount is calculated.
TIME CHARTER means,
(i) in respect of an Identified Vessel, the time charterparty
entered into or to be entered into, as the case may be, by the
relevant Borrower and CMA CGM or the relevant CMA CGM Charterer
on terms satisfactory to the Facility Agent with such charter
period and charter
18
rates as set out in Part 1 of Schedule 1 (Original Parties) or,
such other Acceptable Charter entered into from time to time in
respect of such Identified Vessel in accordance with this
Agreement; and
(ii) in respect of any other Vessel, such Acceptable Charter entered
into from time to time in respect of that Vessel in accordance
with this Agreement.
TOTAL COMMITMENTS means the aggregate of the Commitments of all the
Lenders.
TOTAL LOSS means in relation to a Vessel:
(a) actual, constructive, compromised, agreed or arranged total loss
of that Vessel;
(b) requisition for title or other compulsory acquisition of that
Vessel otherwise than by requisition for hire; and
(c) capture, seizure, arrest, detention, or confiscation (including
requisition for hire) of that Vessel by any government or by
persons acting or purporting to act on behalf of any government
or by any other person which deprives the relevant Borrower or,
as the case may be, the Charterer of the use of that Vessel for
more than ninety (90) days after that occurrence.
TRANSFER CERTIFICATE means a certificate, substantially in the form of
Schedule 6 (Form of Transfer Certificate), with such amendments as the
Facility Agent and the Representative Borrower may approve or reasonably
require or any other form agreed between the Facility Agent and the
Representative Borrower.
TREATY LENDER means a Lender which:
(i) is treated as a resident of a Treaty State for the purposes of
the Treaty;
(ii) does not carry on a business in the United Kingdom through a
permanent establishment with which that Lender's participation
in the Loan is effectively connected; and
(iii) subject to the completion of necessary procedural formalities,
fulfils all other conditions in the relevant Treaty that need to
be fulfilled (and which are solely within its control to fulfil)
in order to receive interest without withholding under the terms
of the Treaty.
TREATY STATE means a jurisdiction having a double taxation agreement (a
TREATY) with the United Kingdom which makes provision for full exemption
from tax imposed by the United Kingdom on interest.
UK NON-BANK LENDER means a Lender which becomes a Party after the date
on which this Agreement is entered into and gives a Tax Confirmation in
the Transfer Certificate which it executes on becoming a Party.
U.S. GAAP means generally accepted accounting principles adopted and
accepted in the United States of America (i) on the date of this
Agreement when used in the context of calculating the financial
covenants set out in Clause 17 (Financial Covenants) and (ii) otherwise,
from time to time.
UTILISATION DATE means each date on which the Facility or any part
thereof is utilised (excluding any date on which a Loan is rolled over
under clause 5.1(c)).
19
VESSELS means together the Delivered Vessels and, from the Applicable
Time, each Subsequent Vessel and each Additional Vessel and VESSEL means
any of them.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a
reference to:
(i) an AMENDMENT includes a supplement, novation,
restatement or re-enactment and AMENDED will be
construed accordingly;
(ii) ASSETS includes present and future properties, revenues
and rights of every description;
(iii) an AUTHORISATION includes an authorisation, consent,
approval, resolution, permit, licence, exemption,
variance, filing, registration or notarisation;
(iv) DISPOSAL means a sale, transfer, grant, lease (other
than a bareboat charter entered into on commercial
terms) declaration of trust or other disposal, whether
voluntary or involuntary, and DISPOSE will be construed
accordingly;
(v) INDEBTEDNESS includes any obligation (whether incurred
as principal or as surety and whether present or future,
actual or contingent) for the payment or repayment of
money;
(vi) a PERSON includes any individual, company, corporation,
unincorporated association or body (including a
partnership, trust, fund, joint venture or consortium),
government, state, agency, organisation or other entity
whether or not having separate legal personality and
their successors in title, permitted assigns and
permitted transferees;
(vii) a REGULATION includes any regulation, rule, official
directive, request, code or guideline (whether or not
having the force of law but, if not having the force of
law, being of a type with which any person to which it
applies is accustomed to comply) of any governmental,
inter-governmental or supranational body, agency,
department or regulatory, self-regulatory or other
authority or organisation;
(viii) a currency is a reference to the lawful currency for the
time being of the relevant country; (ix) a Default being
OUTSTANDING means that it has not been cured, remedied
or waived;
(x) a provision of law is a reference to that provision as
extended, applied, amended or re-enacted and includes
any subordinate legislation;
(xi) a Clause, a Subclause, a Schedule or an Appendix is a
reference to a clause or subclause of, or a schedule to
or appendix of, this Agreement;
(xii) a Finance Document or another document is a reference to
that Finance Document or other document as amended;
(xiii) a time of day is a reference to London time; and
(xiv) words importing the plural shall include the singular
and vice versa.
20
(b) Unless the contrary intention appears, a reference to a MONTH or
MONTHS is a reference to a period starting on (and including)
one day in a calendar month and ending on (but excluding) the
numerically corresponding day in the next calendar month or the
calendar month in which it is to end, except that:
(i) if the numerically corresponding day is not a Business
Day, the period will end on the next Business Day in
that month (if there is one) or the preceding Business
Day (if there is not);
(ii) if there is no numerically corresponding day in that
month, that period will end on the last Business Day in
that month; and
(iii) notwithstanding subparagraph (i) above, a period which
commences on the last Business Day of a month will end
on the last Business Day in the next month or the
calendar month in which it is to end, as appropriate.
(c) Unless expressly provided to the contrary in a Finance Document,
a person who is not a party to a Finance Document may not
enforce any of its terms under the Contracts (Rights of Third
Parties) ▇▇▇ ▇▇▇▇ and notwithstanding any term of any Finance
Document, the consent of any third party is not required for any
variation (including any release or compromise of any liability)
or termination of that Finance Document.
(d) Unless the contrary intention appears or unless the context
otherwise permits:
(i) a reference to a Party will not include that Party if it
has ceased to be a Party under this Agreement;
(ii) a word or expression used in any other Finance Document
or in any notice given in connection with any Finance
Document has the same meaning in that Finance Document
or notice as in this Agreement; and
(iii) any obligation of any Borrower under the Finance
Documents which is not a payment obligation remains in
force in accordance with its terms for so long as any
payment obligation of any Borrower is, may be or is
capable of becoming outstanding under the Finance
Documents.
(E) JOINT AND SEVERAL LIABILITY
(i) All obligations, covenants, representations, warranties
and undertakings in or pursuant to the Finance Documents
assumed, given, made or entered into by the Borrowers
shall, unless otherwise expressly provided, be assumed,
given, made or entered into by the Borrowers jointly and
severally. The failure by a Borrower to perform its
obligations under the Finance Documents shall constitute
a failure by the other Borrowers in the performance of
their obligations under the Finance Documents. Each
Borrower shall be responsible for the performance of the
obligations of the other Borrowers under the Finance
Documents.
(ii) The Finance Parties may, but only through the Facility
Agent, take action against any of the Borrowers and/or
release or compromise in whole or in part the liability
of the other Borrowers under this Agreement or any other
Finance Document or grant any time or other indulgence
to any of the Borrowers, in each case without affecting
the liability of the other Borrowers.
21
(iii) Each Borrower agrees to be bound by the Finance
Documents to which it is, or is to be, a party
notwithstanding that the other Borrowers which are
intended to sign or to be bound may not do so or be
effectually bound and notwithstanding that any of the
Finance Documents may be invalid or unenforceable
against the other Borrowers, whether or not the
deficiency is known to any Finance Party.
(iv) None of the obligations or liabilities of the Borrowers
under this Agreement or any other Finance Document shall
be discharged or reduced by reason of:
(A) the insolvency, liquidation, dissolution,
winding-up, administration, receivership,
amalgamation, reconstruction or other incapacity
of any person whatsoever or any change of name
or style or constitution of a Borrower or any
other person liable;
(B) any Finance Party granting any time, indulgence
or concession to, or compounding with,
discharging, releasing or varying the liability
of, a Borrower or any other person liable or
renewing, determining, varying or increasing,
any accommodation, facility or transaction or
otherwise dealing with the same in any manner
whatsoever, or concurring in, accepting, varying
any compromise, arrangement or settlement or
omitting to claim or enforce payment from a
Borrower or any other person liable; or
(C) anything done or omitted which but for this
provision might operate to exonerate the
Borrowers or any of them.
(v) Without prejudice to the operation of the Finance
Documents in relation to the flow of funds into and out
of the Earnings Accounts, the Retention Account and the
Operating Account each of the Borrowers agrees that any
rights which it may have at any time during the term of
the Facility by reason of the performance of its
obligations under the Finance Documents to be
indemnified by any other Borrower and/or to take the
benefit of any security taken by the Facility Agent
pursuant to the Finance Documents shall be exercised in
such manner and on such terms as the Facility Agent may
require or as provided in this Agreement. Each of the
Borrowers agrees to hold any sums received by it as a
result of its having exercised any such right on trust
for the Facility Agent absolutely.
(vi) Without prejudice to the operation of the Finance
Documents in relation to the flow of funds into and out
of the Earnings Accounts, the Retention Account and the
Operating Account each of the Borrowers agrees that it
will not at any time during the term of the Facility
claim any set-off or counterclaim against any other
Borrowers in respect of any liability owed to it by that
other Borrower under or in connection with the Finance
Documents, nor prove in competition with any of the
Finance Parties in any liquidation of (or analogous
proceeding in respect of) any other Borrower in respect
of any payment made under the Finance Documents or in
respect of any sum which includes the proceeds of
realisation of any security held by the Facility Agent
for the repayment of the Loans.
(vii) Any notices given by the Representative Borrower or
statements made by it, instructions given by it to any
Finance Party or decisions made by it, will be
conclusive and binding on all of the Borrowers.
(f) The headings in this Agreement do not affect its interpretation.
22
2. FACILITY AND PURPOSE
2.1 FACILITY
Subject to the terms of this Agreement, the Lenders make available to
the Borrowers a revolving credit facility in a maximum aggregate amount
equal to the Total Commitments.
2.2 PURPOSE
Each Loan may be used only in or towards:
(a) financing the cost of acquiring the Identified Vessels and any
New Vessels;
(b) refinancing the whole or any part of the cost of any New Vessels
or Identified Vessels which have been purchased by any Borrower
and financed by debt or equity; or
(c) general corporate purposes of the Representative Borrower or
GSLS (including, without limitation, the payment of dividends
and directly or indirectly financing the pre-delivery payments
in respect of newbuild vessels).
2.3 NO OBLIGATION TO MONITOR
No Finance Party is obliged to monitor or verify the utilisation of any
Loan.
2.4 NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS
Unless otherwise agreed by all the Finance Parties:
(a) the obligations of a Finance Party under the Finance Documents
are several;
(b) failure by a Finance Party to perform its obligations does not
affect the obligations of any other Party under the Finance
Documents;
(c) no Finance Party is responsible for the obligations of any other
Finance Party under the Finance Documents;
(d) the rights of a Finance Party under the Finance Documents are
separate and independent rights;
(e) a Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce those rights, provided always that
no Finance Party shall act separately unless (i) the Facility
Agent has failed to act and the Facility Agent has not been
replaced in accordance with Clause 21.13 or (ii) as a matter of
law, the Facility Agent cannot represent them; and
(f) a debt arising under the Finance Documents to a Finance Party is
a separate and independent debt.
3. CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT
(a) A Request for a Loan to be used in and towards financing the
cost of acquiring a New Vessel, which is not to be an Additional
Vessel may not be given until the Facility Agent has notified
the Representative Borrower and the Lenders that it has received
an EBITDA to Debt Service Compliance Certificate and any related
documentation and evidence required
23
by the Facility Agent in each case to satisfy the Facility Agent
that the EBITDA to Debt Service Ratio is not less than the
Minimum EBITDA to Debt Service Ratio;
(b) A Request for a Loan to be used in and towards the cost of
acquiring a vessel which the Representative Borrower wishes to
become an Additional Vessel may not be given until the Facility
Agent has notified the Representative Borrower and the Lenders
that it has received satisfactory evidence that the vessel to be
acquired will become an Additional Vessel at the Applicable
Time, in form and substance satisfactory to the Facility Agent.
The Facility Agent must give this notification promptly upon
being so satisfied.
(c) A Loan shall not be drawn down until the Facility Agent has
notified the Representative Borrower and the Lenders that it is
satisfied that immediately following the drawing of such Loan,
the principal amount of the Loans outstanding will not exceed
the Borrowing Base. The Facility Agent must give a notification
to the Representative Borrower and the Lenders as to whether it
is so satisfied as soon as practicable following a Request.
(d) A Loan shall be drawn down when and only when, the Facility
Agent has received all of the documents and evidence set out in
Part 1 of Schedule 2 of (Initial Conditions Precedent Documents)
in form and substance satisfactory to the Facility Agent.
(e) A Loan shall be drawn down when, and only when the Facility
Agent has received satisfactory evidence that (i) Swap
Agreements which have been entered into in connection with the
Facility, which hedge an aggregate amount equal to at least the
Hedged Portion of the aggregate of (x) all of the Loans then
outstanding and (y) the Loan to be drawn down, and (ii) a Swap
Agreement Assignment has been entered into in connection with
each such Swap Agreement or at such other time as shall be
agreed between the Representative Borrower and the Facility
Agent.
(f) A Loan to be used in and towards financing the cost of acquiring
an Identified Vessel shall not be drawn down until (i) the Owner
of the relevant Identified Vessel (if not already a Borrower)
has become a Borrower by executing and delivering to the
Facility Agent a Borrower Accession Agreement and (ii) the
Facility Agent has received all of the documents and evidence
set out in Part 2 of Schedule 2 (Identified Vessel Conditions
Precedent Documents) in form and substance satisfactory to the
Facility Agent or on the Facility Agent's confirmation to the
Lenders that it expects to receive outstanding documents or
evidence on or before the date of the drawing of that Loan.
(g) A Loan to be used in and towards financing the cost of acquiring
an Additional Vessel shall not be drawn down until (i) the Owner
of the relevant Additional Vessel (if not already a Borrower)
has become a Borrower by executing and delivering to the
Facility Agent a Borrower Accession Agreement and (ii) the
Facility Agent has received all of the documents and evidence
set out in Part 3 of Schedule 2 (Additional Vessel Conditions
Precedent Documents) in form and substance satisfactory to the
Facility Agent or on the Facility Agent's confirmation to the
Lenders that it expects to receive outstanding documents or
evidence on or before the date of the drawing of that Loan.
(h) If, at any time, the Representative Borrower notifies the
Facility Agent in writing that it wishes a vessel to become an
Additional Vessel for the purpose of the Borrowing Base
notwithstanding that there may not be a drawing in respect of a
Loan relating to that Additional Vessel, that vessel shall not
be considered an Additional Vessel until the Facility Agent has
received all of the relevant documents and evidence set out in
Part 3 of Schedule 2 (Additional Vessel Conditions Precedent
Documents) and Schedule 3 (Conditions Subsequent to Drawing) in
form and substance satisfactory to the Facility Agent.
24
(i) In respect of each Delivered Vessel, and in respect of each
Subsequent Vessel, on the Delivery Date of that Vessel, the
relevant Borrower shall provide to the Facility Agent all
documents and evidence set out in Schedule 3 (Conditions
Subsequent to Drawing) in form and substance satisfactory to the
Facility Agent.
3.2 FURTHER CONDITIONS PRECEDENT
The obligations of each Lender to advance any Loan are subject to the
further conditions precedent that on both the date of the Request and
the Utilisation Date for that Loan:
(a) the representations made under Clause 14 (Representations) are
correct in all material respects; and
(b) no Default or, in the case of a Rollover Loan, no Event of
Default is outstanding or would result from that Loan.
3.3 MAXIMUM NUMBER
A Request may not be given if, as a result of the Loan to be made
pursuant to that Request, there would have been more than twenty-five
(25) Loans (excluding Rollover Loans) in aggregate made during that
calendar year.
3.4 BORROWING BASE
The Representative Borrower may request at any time (but not more than
once a quarter) that the Relevant Percentage is decreased or increased
to such percentage as it may request (subject to a maximum of seventy
(70) per cent. except, that:
(a) any such increase is conditional upon it providing an EBITDA to
Debt Service Compliance Certificate and any related
documentation and evidence required by the Facility Agent, in
each case demonstrating that the EBITDA to Debt Service Ratio
will not be less than the Minimum EBITDA to Debt Service Ratio
after having given effect to such increase; and
(b) no such decrease may result in the amount of Loans outstanding
being in excess of the amount of the Borrowing Base after such
decrease.
4. UTILISATION
4.1 GIVING OF REQUESTS
(a) A Borrower may borrow a Loan by giving to the Facility Agent a
duly completed Request.
(b) Unless the Facility Agent otherwise agrees acting on the
instructions of the Majority Lenders, the latest time for
receipt by the Facility Agent of a duly completed Request is:
(i) in respect of a Loan to be used in and towards general
corporate purposes of the Representative Borrower or
GSLS, 11.00 a.m. four (4) Business Days prior to the
date of the proposed borrowing; and
(ii) in respect of a Loan to be used in and towards the cost
of acquiring an Identified Vessel or a New Vessel,11.00
a.m. five (5) Business Days prior to the date of the
proposed borrowing.
(c) Each Request is irrevocable.
25
(d) A Request for a Rollover Loan will not be required.
4.2 COMPLETION OF REQUESTS
A Request for a Loan will only be regarded as having been duly completed
if:
(a) the Utilisation Date is a Business Day falling within the
Availability Period;
(b) the Utilisation Date falls on or after the Delivery Date of any
Vessel that will be included in the calculation of the Borrowing
Base for the purposes of Clause 3.1(a) (Conditions precedent);
or
(c) it sets out whether that Loan is to be applied in and towards
(i) general corporate purposes of the Representative Borrower or
GSLS, or (ii) the cost of the acquisition of an Identified
Vessel, Additional Vessel or Other Vessel;
(d) the amount requested for the Loan is a minimum amount of
US$5,000,000 or, if less, the aggregate unutilised amount of the
Facility (or such other lesser amount to which the Facility
Agent has given prior approval);
(e) the amount requested for the Loan does not exceed, when
aggregated with the amounts outstanding under the Facility and
amounts to be drawn down under any other Requests which have
been submitted, the Maximum Available Facility Amount;
(f) the proposed Term complies with this Agreement.
Only one Loan may be requested in a Request. Only twenty-five (25) Loans
(excluding Rollover Loans) may be requested in each calendar year.
4.3 ADVANCE OF LOANS
(a) The Facility Agent must promptly notify each Lender of the
details of the requested Loan and the amount of its share in
that Loan.
(b) The amount of each Lender's share of the Loan will be its Pro
Rata Share on the proposed Utilisation Date.
(c) No Lender is obliged to participate in a Loan if, as a result,
its share in the Loans would exceed its Commitment or the Loans
would exceed the Total Commitments.
(d) If the conditions set out in this Agreement have been met, each
Lender must make its share in the requested Loan available by
the Utilisation Date through its Facility Office.
5. REPAYMENT
5.1 REPAYMENT
(a) The Borrowers must repay each Loan in full on its Maturity Date.
Subject to the other terms of this Agreement, any amounts repaid
under this paragraph (a) may be reborrowed.
(b) Each Loan shall in any event be repaid in full on the Final
Maturity Date.
(c) On the Maturity Date of a Loan (other than the Final Maturity
Date), provided that:
(i) no Event of Default has occurred and is continuing; and
26
(ii) so long as the amount of the Loans would not exceed the
Maximum Available Facility Amount (as at the last
calculation of the Borrowing Base),
and subject to the provisions of Clause 5.2 (Repayment on Facility
Reduction Dates), such Loan will be rolled over for another Term and
become a Rollover Loan.
5.2 REPAYMENT ON FACILITY REDUCTION DATES
On each Facility Reduction Date, the Borrowers must repay such part of
the Loans then outstanding as exceeds the Total Commitments (as the same
may have been reduced by any Commitment reductions under Clause 6.5
(Automatic cancellation)). Unless otherwise specified by the
Representative Borrower, any such repayment shall be applied against the
Loans in order of their maturity.
6. PREPAYMENT AND CANCELLATION
6.1 MANDATORY PREPAYMENT - ILLEGALITY
(a) If it becomes, or to the knowledge of any Lender is to become,
unlawful in any jurisdiction for a Lender to perform any of its
obligations as contemplated by this Agreement or a Finance
Document or to fund or maintain its share in one or more of the
Loans (the EVENT OF ILLEGALITY), that Lender shall notify the
Facility Agent and the Representative Borrower.
(b) After notification under paragraph (a) above, the Facility Agent
shall notify the Representative Borrower promptly and:
(i) the Borrowers shall repay or prepay the share of that
Lender in the relevant Loan or Loans on the date
specified in paragraph (c) below; and
(ii) the Commitment of that Lender will be immediately
cancelled.
(c) The date for repayment or prepayment of a Lender's share in a
Loan or Loans will be the date specified by that Lender in the
notice delivered to the Representative Borrower (being no
earlier than the last day of any applicable grace period
permitted by Applicable Law or, if earlier, and the Borrower so
desires, the last day of the current Term).
6.2 MANDATORY PREPAYMENT - LEVERAGE RATIO
If on any date for determination of the Leverage Ratio, the Leverage
Ratio is higher than 75%, the provisions of Clause 16.15(b) shall apply.
6.3 MANDATORY PREPAYMENT - SALE OR TOTAL LOSS OF A VESSEL
If a Vessel is sold (other than where the sale is to another Borrower),
upon the occurrence of such sale (except in circumstances where there is
a transfer between Borrowers) or, if there is a Total Loss of a Vessel,
on the earlier of (i) the receipt of the proceeds of the Obligatory
Insurances relating to such Total Loss and (ii) the date falling one
hundred and twenty (120) days after the Date of Total Loss:
(a) the Facility Agent shall be entitled to recalculate the
Borrowing Base, excluding from such calculation the Vessel the
subject of the sale or the Total Loss;
(b) the Borrowers shall be obliged to prepay such amount of the
Loans then outstanding as exceeds the lower of (i) the Borrowing
Base and (ii) the Maximum Available Facility
27
Amount and unless otherwise specified by the Representative
Borrower, any such prepayment shall be applied against the Loans
then outstanding in order of maturity; and
(c) any balance of sale proceeds or insurance proceeds after such
application shall be available immediately to the relevant
Borrower so long as no Default has occurred which is continuing.
6.4 VOLUNTARY PREPAYMENT
(a) The Borrowers may, by the Representative Borrower giving not
less than five (5) Business days' prior written notice to the
Facility Agent, prepay the Loans in whole or from time to time
in part on the last day of any Term.
(b) A prepayment must be in a minimum amount of US$5,000,000 and in
integral multiples of US$2,500,000 if in excess of US$5,000,000.
(c) Any voluntary prepayment under this Clause 6.4 shall be applied
against the Loans pro rata unless the Representative Borrower
nominates in writing that the prepayment is to be applied first
against specific Loans then outstanding.
6.5 AUTOMATIC CANCELLATION
(a) The obligation of a Lender to advance the undrawn amount of its
Commitment will be automatically cancelled at the close of
business on the last day of the Availability Period.
(b) Commencing on the date falling five (5) years from the Closing
Date, and on the dates falling at three month intervals
thereafter (each a FACILITY REDUCTION DATE) the Total
Commitments shall automatically reduce by twelve consecutive
quarterly reductions , each of an amount calculated in
accordance with the following formula on the date falling four
(4) years and nine (9) months from the Closing Date (the
FACILITY REDUCTION AMOUNT):
A
a= ------/4
18 - N
where:
a = the relevant amount by which the Total
Commitments shall be reduced on each Facility
Reduction Date.
A = the Total Commitments on the date falling four
(4) years and nine (9) months from the Closing
Date taking into account any prior cancellations
in accordance with Clause 6.
N = the average age of all of the Vessels actually
delivered to the Borrowers, weighted by the
latest Market Values of those Vessels and
determined by the Facility Agent on the date
falling four (4) years and nine (9) months from
the Closing Date (the INITIAL MARKET VALUE
WEIGHTED AVERAGE AGE).
(c) If, at any time after the date falling four (4) years and nine
(9) months after the Closing Date, there is a sale or Total Loss
of a Vessel, the Facility Agent shall determine the average age
of all of the Vessels (excluding the Vessel the subject of the
sale or Total Loss) weighted by the latest Market Values of
those Vessels (the SUBSEQUENT MARKET VALUE AVERAGE AGE). If the
Subsequent Market Value Average Age at that time is more than
1.0 year higher than the Initial Market Value Weighted Average
Age, the Facility Reduction Amount shall be
28
recalculated using the formula referred to above but
substituting as N the Subsequent Market Value Average Age for
the Initial Market Value Average Age and the revised amount
shall apply on the next, and each subsequent (unless and until
this Clause 6.5(c) applies again) Facility Reduction Date. On
each Facility Reduction Date, the Borrowers shall prepay such
part (if any) of the outstanding Loans as exceeds the Total
Commitments reduced in accordance with this Clause 6.5.
6.6 VOLUNTARY CANCELLATION
(a) The Representative Borrower may, by giving not less than five
(5) Business days' prior notice to the Facility Agent, cancel
the unutilised amount of the Total Commitments in whole or in
part.
(b) Partial cancellation of the Total Commitments must be in a
minimum amount of US$5,000,000 and in integral multiples of
US$2,500,000 in excess of US$5,000,000.
(c) Any cancellation in whole or in part (including, without
limitation, a cancellation or a Facility Reduction Amount
pursuant to Clause 6.5) will be applied against the Commitments
of the Lenders pro rata.
6.7 VOLUNTARY PREPAYMENT AND CANCELLATION
(a) If a Borrower is, or will be, required to pay to a Lender a Tax
Payment or an Increased Cost, the Representative Borrower may,
while the requirement continues, give notice to the Facility
Agent requesting prepayment and cancellation in respect of that
Lender.
(b) After notification under paragraph (a) above:
(i) that Borrower must repay or prepay that Lender's share
in each Loan made to it on the date specified in
paragraph (c) below; and
(ii) the Commitment of that Lender will be immediately
cancelled.
(c) The date for repayment or prepayment of a Lender's share in a
Loan(s) will be the last day of the current Term for the
relevant Loan or, if earlier, the date specified by the relevant
Borrower in the notice delivered to the Facility Agent.
6.8 RE-BORROWING OF LOANS
Any prepayment of a Loan may be re-borrowed on the terms of this
Agreement.
6.9 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable and must specify the relevant date(s).
The Facility Agent must notify the Lenders promptly of receipt
of any such notice.
(b) All prepayments under this Agreement must be made with accrued
interest on the amount prepaid. No premium or penalty is payable
in respect of any prepayment except for Break Costs.
(c) No prepayment or cancellation is allowed except in accordance
with the express terms of this Agreement.
29
(d) No amount of the Total Commitments reduced or cancelled under
this Agreement may subsequently be reinstated.
7. INTEREST
7.1 CALCULATION OF INTEREST
(a) The rate of interest on each Loan for each Term is the
percentage rate per annum equal to the aggregate of:
(i) the applicable Margin from time to time;
(ii) LIBOR; and
(iii) Mandatory Cost (if any) (together, the INTEREST RATE).
(b) Interest shall be calculated by reference to the actual number
of days elapsed and on the basis of a year of 360 days. Interest
shall accrue from and including the first day of each Term to
but excluding the last day of such Term.
7.2 PAYMENT OF INTEREST
Except where it is provided to the contrary in this Agreement, the
Borrowers must pay accrued interest on each Loan on the last day of each
Term and also, if the Term is longer than three months, on the dates
falling at quarterly intervals after the first day of that Term (each an
INTEREST PAYMENT DATE).
7.3 INTEREST ON OVERDUE AMOUNTS
(a) If a Borrower fails to pay any amount payable by it under the
Finance Documents, the Borrowers must immediately on demand by
the Facility Agent pay interest on the overdue amount from its
due date up to the date of actual payment, both before, on and
after judgment.
(b) If the overdue amount is a principal amount of a Loan or is an
amount accruing in respect of interest on a Loan and becomes due
and payable prior to the last day of its current Term, then:
(i) the first Term for that overdue amount will be the
unexpired portion of that Term and the rate of interest
on the overdue amount for that first Term will be two
(2) per cent. per annum above the Interest Rate; and
(ii) thereafter, any subsequent Term for that overdue amount
shall be selected by the Facility Agent (acting on the
instructions of the Majority Lenders, acting reasonably)
who may select successive Terms of any duration up to
six (6) months, and the rate of interest on the overdue
amount will be two (2) per cent. per annum above the
Interest Rate.
After the expiry of the first Term for that overdue amount, the rate on
the overdue amount will be calculated in accordance with paragraph (c)
below.
(c) In respect of any amounts outstanding other than in accordance
with paragraph (b) above, interest on such overdue amount is
payable at a rate determined by the Facility Agent to be two (2)
per cent. per annum above the Interest Rate. For this purpose,
the Facility Agent
30
may (acting on the instructions of the Majority Lenders, acting
reasonably) select successive Terms of any duration of up to six
(6) months.
(d) Interest (if unpaid) on an overdue amount will be compounded
with that overdue amount at the end of each of its Terms but
will remain immediately due and payable.
7.4 NOTIFICATION OF RATES OF INTEREST
The Facility Agent must promptly notify each Finance Party and the
Representative Borrower of the determination of a rate of interest under
this Agreement.
8. TERMS
8.1 SELECTION
(a) Each Loan has one Term only.
(b) The Term for a Loan (other than the first Loan) shall, subject
to paragraphs (d) and (e) below, be the same as the then current
Term for all then outstanding Loans or if there is more than one
term for the outstanding Loans, the term chosen by the
Representative Borrower.
(c) The Representative Borrower must select the Term for the first
Loan in the relevant Request and shall be entitled to select (by
written notice to the Facility Agent) the Term for each Rollover
Loan in accordance with paragraph (d) below. Subject to the
following provisions of this Clause 8, each such Term for a Loan
or a Rollover Loan will be a period of one (1), three (3), six
(6), nine (9) or twelve (12) months, or such other period as may
be agreed by the Representative Borrower and the Facility Agent.
If the Representative Borrower fails to select a Term for a
Loan, that Term will, subject to the other provisions of this
Clause 8, be three (3) months.
(d) The term for a Rollover Loan will be the same duration as the
previous Term for such Loan, unless the Representative Borrower
provides to the Facility Agent an irrevocable notice pursuant to
paragraph (c) above requesting a different Term in accordance
with Clause 8.1(c) no later than 11.00 a.m. three (3) Business
Days before the Rate Fixing Date for that Term, provided however
that not more than five (5) different Terms may be outstanding
at any one time.
(e) The Representative Borrower may, on or before the time a Request
is given, request that a Term for a Loan is not consolidated
with existing Terms for other Loans then outstanding. No more
than five (5) such non-consolidated Loans and different terms
under paragraph (d) above in aggregate may be outstanding at any
one time. In the event of such a request, the Representative
Borrower must select both the Term for such Loan in the relevant
Request and when such Loan is rolled over the provisions of
paragraph (c) above will apply to such selection.
8.2 NO OVERRUNNING THE FINAL MATURITY DATE
If a Term would otherwise overrun the Final Maturity Date, it will be
shortened so that it ends on the Final Maturity Date.
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8.3 OTHER ADJUSTMENTS
The Facility Agent and the Representative Borrower may enter into such
other arrangements as they may agree for the adjustment of Terms and the
consolidation and/or splitting of Loans and will enter into such
arrangements as are practicable to ensure that Loans in amounts at least
equal to the amount required to be repaid on a Facility Reduction Date
have a Term ending on such Facility Reduction Date.
9. MARKET DISRUPTION
9.1 FAILURE OF THE REFERENCE BANK TO SUPPLY A RATE
If LIBOR is to be calculated by reference to the Reference Banks but a
Reference Bank does not supply a rate by 11.00 a.m. on the Rate Fixing
Day, the applicable LIBOR will be determined on the basis of the
remaining Reference Banks.
9.2 MARKET DISRUPTION
(a) A market disruption event shall arise where:
(i) no, or only one, Reference Bank supplies a rate by 11.00
a.m. on the Rate Fixing Day; or
(ii) the Facility Agent receives by close of business on the
Rate Fixing Day notification from any Lender or Lenders
(the AFFECTED LENDERS) whose aggregate shares in the
relevant Loan exceed 50 per cent. of that Loan that the
cost to them of obtaining matching deposits in the
relevant interbank market is in excess of LIBOR for the
relevant Term.
(b) The Facility Agent must promptly notify the Representative
Borrower and the Lenders of a market disruption event.
(c) After notification under paragraph (b) above, the rate of
interest for the Affected Lenders on the affected Loan for the
relevant Term will be the aggregate of the applicable:
(i) Margin;
(ii) the rate notified to the Facility Agent by those
Affected Lenders as soon as practicable, and in any
event before interest is due to be paid in respect of
that Term, to be that which expresses as a percentage
rate per annum the cost to those Affected Lenders of
funding the Loan from whatever source each of them may
reasonably select; and
(iii) Mandatory Cost (if any).
9.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
(a) If a market disruption event occurs and the Facility Agent or
the Representative Borrower so require, the Representative
Borrower and the Facility Agent must enter into negotiations for
a period of not more than thirty (30) days with a view to
agreeing to an alternative basis for determining the rate of
interest and/or funding for the affected Loan and any future
Loan.
(b) Any alternative basis agreed between the Representative Borrower
and the Facility Agent will be, with the prior written consent
of all the Lenders, binding on all the Parties hereto.
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10. TAXES
10.1 TAX GROSS-UP
(a) Each Borrower must make all payments to be made by it under the
Finance Documents without any Tax Deduction, unless a Tax
Deduction is required by an Applicable Law.
(b) If a Borrower or a Lender is aware that a Borrower must make a
Tax Deduction (or that there is a change in the rate or the
basis of a Tax Deduction), it must promptly notify the Facility
Agent. The Facility Agent must then promptly notify the affected
Parties.
(c) If a Tax Deduction is required by an Applicable Law to be made
by a Borrower or, as the case may be, the Facility Agent, the
amount of the payment due from the Borrowers will be increased,
or, as the case may be, the Borrowers shall make an additional
payment, so that the amount (after making the Tax Deduction,
including on the additional payment) received by the recipient
is equal to the payment which would have been due if no Tax
Deduction had been required.
(d) A Borrower is not required to make an increased payment to a
Lender under clause 10.1(c) above for a Tax Deduction in respect
of tax imposed by the United Kingdom from a payment of interest
on a Loan, if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender
without a Tax Deduction if it was a Qualifying Lender,
but on that date that Lender is not or has ceased to be
a Qualifying Lender other than as a result of any change
after the date it became a Lender under this Agreement
in (or in the interpretation, administration or
application of) any Applicable Laws or Treaty, or any
published practice or concession of any relevant taxing
authority; or
(ii)
(A) the relevant Lender is a Qualifying Lender
solely under sub-paragraph (b) of the definition
of Qualifying Lender;
(B) an officer of HM Revenue & Customs has given
(and not revoked) a direction (a DIRECTION)
under section 931 of the ITA (as that provision
has effect on the date on which the relevant
Lender became a Party) which relates to that
payment and that Lender has received from that
Borrower a certified copy of that Direction; and
(C) the payment could have been made to the Lender
without any Tax Deduction in the absence of that
Direction; or
(iii) the relevant Lender is a Qualifying Lender solely under
sub-paragraph (b) of the definition of Qualifying Lender
and it has not, other than by reason of any change after
the date of this Agreement in (or in the interpretation,
administration, or application of) any law, or any
published practice or concession of any relevant taxing
authority, given a Tax Confirmation to the Borrowers; or
(iv) the relevant Lender is a Treaty Lender and the Borrower
making the payment is able to demonstrate that the
payment could have been made to the Lender without the
Tax Deduction had that Lender complied with its
obligations under clause 10.1(g) below
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(e) If a Borrower is required to make a Tax Deduction, that
Borrowers must make the minimum Tax Deduction allowed by
Applicable Law and must make any payment required in connection
with that Tax Deduction within the time allowed by the
Applicable Law.
(f) Within fifteen (15) days of making either a Tax Deduction or a
payment required in connection with a Tax Deduction the Borrower
making the Tax Deduction must deliver to the Facility Agent for
the relevant Finance Party, documents or other information (or
certified copies thereof) evidencing satisfactorily to that
Finance Party (acting reasonably) that the Tax Deduction has
been made or (as applicable) the appropriate payment has been
paid to the relevant taxing authority.
(g) Each Lender which is a Treaty Lender and each Borrower which
makes a payment to which that Lender is entitled, shall
co-operate in completing any procedural formalities necessary
for the relevant Borrower to obtain authorisation to make the
payment without a Tax Deduction and each Lender which is a
Treaty Lender shall not take any steps which would render
inapplicable to the payments by the relevant Borrower to that
Lender the exemption for tax imposed by the United Kingdom on
interest provided by the relevant Treaty.
(h) A UK Non-Bank Lender which becomes a Party on the day on which
this Agreement is entered into gives a Tax Confirmation to the
Borrowers by entering into this Agreement.
(i) A UK Non-Bank Lender shall promptly notify the Representative
Borrower and the Facility Agent if there is any change in the
position from that set out in the Tax Confirmation.
10.2 TAX INDEMNITY
(a) Without prejudice to the provisions of Clause 10.1 (Tax gross-up), if
any Lender is required to make any payment on account of Tax solely as a
result of its entry into any Finance Document (not being a Tax imposed
on the net income of a Lender or its Facility Office by the jurisdiction
in which it is incorporated (or, if different, the jurisdiction in which
it is treated as resident for tax purposes), or the jurisdiction in
which its Facility Office is located or on the capital of that Lender
employed in such jurisdiction or jurisdictions) on any sum received or
receivable under the Finance Documents (including, without limitation,
any sum received or receivable under this Clause 10.2) or any liability
in respect of any such payment is imposed, levied or finally assessed
against a Lender, the Borrowers shall (within three (3) Business Days of
demand on the Representative Borrower by the Facility Agent) indemnify
that Lender against such payment or liability, together with any
interest, penalties and expenses payable or incurred in connection
therewith.
(b) Clause 10.2(a) above shall not apply to the extent a loss, liability or
cost:
(i) is compensated for by an increased payment under clause 10.1
(Tax gross-up); or
(ii) would have been compensated for by an increased payment under
clause 10.1 (Tax gross-up) but was not so compensated solely
because one of the exclusions in clause 10.1(d) (Tax gross-up)
applied.
10.3 TAX CREDIT
If a Lender or, as the case may be, the Facility Agent determines in its
absolute discretion, acting in good faith, that it has received,
realised, utilised and retained a Tax benefit by reason of any deduction
or withholding in respect of which a Borrower has made an increased
payment or paid a compensating sum under this Clause 10 that Lender or,
as the case may be, the Facility Agent shall, provided it has received
all amounts which are then due and payable by the Borrower under any of
the provisions of this Agreement and the other Finance Documents, pay to
the relevant Borrower (to
34
the extent that that Lender or, as the case may be, the Facility Agent
can do so without prejudicing the amount of that benefit and the right
of that Lender, or as the case may be, the Facility Agent to obtain any
other benefit, relief or allowance which may be available to it), such
amount, if any, as that Lender, or as the case may be, the Facility
Agent shall determine in its absolute discretion acting in good faith,
will leave that Lender, or as the case may be, the Facility Agent in no
better and no worse position than it would have been in if the deduction
or withholding had not been required and so that it retains no benefit
as a result of the receipt of such deduction.
10.4 NOTIFICATION OF CLAIM
A Lender making, or intending to make, a claim under Clause 10.2 (Tax
Indemnity) shall promptly notify the Facility Agent of the event which
will give, or has given, rise to the claim, following which the Facility
Agent shall notify the Representative Borrower.
10.5 CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the extent,
order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to
its affairs (tax or otherwise) or any computations in respect of
Tax.
10.6 STAMP TAXES
Each Borrower must pay and indemnify each Finance Party against any
stamp duty, registration or other similar Tax payable by a Finance Party
in connection with the entry into, performance or enforcement of any
Finance Document, except for any such Tax payable in connection with
entering into a Transfer Certificate.
10.7 VALUE ADDED TAXES
(a) Any amount (including costs and expenses) payable under a
Finance Document by a Borrower is exclusive of any value added
tax or any other Tax of a similar nature which might be
chargeable in connection with that amount. If any such Tax is
chargeable, the Borrowers must pay to the relevant Finance Party
(in addition to and at the same time as paying that amount) an
amount equal to the amount of that Tax.
(b) Where a Finance Document requires any Party to reimburse a
Finance Party for any costs or expenses, that Party must also at
the same time pay and indemnify the Finance Party against all
value added tax or any other Tax of a similar nature incurred by
the Finance Party in respect of these costs or expenses but only
to the extent that the Finance Party (acting reasonably)
determines that neither it nor any other member of any group of
which it is a member for value added tax purposes is entitled to
credit or repayment from the relevant tax authority in respect
of the ▇▇▇.
▇▇
▇▇. INCREASED COSTS
11.1 INCREASED COSTS
Except as provided below in this Clause 11, the Borrowers must pay to a
Finance Party the amount of any Increased Cost incurred by that Finance
Party or its Subsidiaries, or its Affiliates as a result of:
(a) the introduction of, or any change in, the interpretation,
administration or application of, any law or regulation after
the date of this Agreement (including, for the avoidance of
doubt, the implementation or application of or compliance with
the "International Convergence of Capital Measurement and
Capital Standards, a Revised Framework" published by the Basel
Committee on Banking Supervision in June 2004 in the form
existing on the date of this Agreement (BASEL II) or any other
law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government,
regulator, Finance Party or any of its Affiliates)); or
(b) compliance with any law or regulation, made after the date of
this Agreement.
11.2 EXCEPTIONS
The Borrowers need not make any payment for an Increased Cost or Tax
Payment to the extent that the Increased Cost is:
(a) compensated for under another Clause or would have been but for
an exception to that Clause;
(b) a Tax; or
(c) attributable to the relevant Finance Party or any of its
Affiliates or Subsidiaries wilfully failing to comply with any
law or regulation.
11.3 CLAIMS
If a Finance Party intends to make a claim for an Increased Cost it must
notify the relevant Borrower promptly of the circumstances giving rise
to, and the amount of, the claim.
11.4 MITIGATION
(a) Each Finance Party must, in consultation with the relevant
Borrower, take all reasonable steps to mitigate any
circumstances which arise and which result or would result in
any Increased Cost, illegality under clause 6.1 or Tax Payment
being payable to that Finance Party, including changing its
Facility Office.
(b) The relevant Borrower must indemnify that Finance Party for all
costs and expenses reasonably incurred by that Finance Party as
a result of any step taken by it under paragraph (a) above.
(c) A Finance Party is not obliged to take any step under this
Subclause if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
(d) Paragraph (a) above does not in any way limit the obligation of
any Borrower under the Finance Documents.
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12. ACCOUNTS
12.1 MAINTENANCE OF ACCOUNTS
The Borrowers shall maintain the Accounts, each of which shall be
interest bearing, with the Account Bank until the Final Maturity Date,
in each case, free of Security Interests and rights of set-off other
than as created by or pursuant to the Security Documents or in favour of
the Account Bank.
12.2 EARNINGS
The Borrowers shall procure that there is credited to each Earnings
Account all Earnings and any Requisition Compensation for the relevant
Vessel. The following transfers will then be made in the following
order:
(a) FIRSTLY, to the Operating Account of the relevant Borrower in
accordance with Clause 12.3 (Transfers to the Operating
Accounts); and
(b) SECONDLY, to the Retention Account in accordance with Clause
12.4 (Transfers to Retention Account in respect of interest on
Loans) or 12.5 (Additional Transfers to Retention Account on
Facility Reduction Dates), as the case may be,
together the PRIMARY TRANSFERS.
12.3 TRANSFERS TO THE OPERATING ACCOUNTS
Provided no Event of Default has occurred and is continuing, each
Borrower shall instruct the Account Bank to transfer from the relevant
Earnings Account (and if the Representative Borrower does not forthwith
procure such a transfer, then the Representative Borrower irrevocably
authorises the Facility Agent to instruct the Account Bank to transfer
from each relevant Earnings Accounts) to the relevant Operating Account
an amount equal to the OPEX element of the charterhire payable under the
Time Charter for the Vessel to which the Earnings Account relates.
Thereafter, provided no Event of Default has occurred and is continuing,
each Borrower shall be entitled to withdraw sums of money standing to
the credit of its relevant Operating Account in and towards payment of
any Operating Expenses in respect of the Vessel owned by that Borrower.
12.4 TRANSFERS TO RETENTION ACCOUNT IN RESPECT OF INTEREST ON LOANS
Following the transfers into the Operating Accounts in accordance with
Clause 12.3 (Transfers to the Operating Accounts), then in respect of
each Loan, from the Closing Date and on the last Business Day of each
calendar month (an EARNINGS DEPOSIT DATE), each Borrower shall procure
that there is transferred from the Earnings Accounts (and if the
Representative Borrower does not forthwith procure such a transfer then
that Borrower irrevocably authorises the Facility Agent to instruct the
Account Bank to transfer from the Earnings Accounts) to the Retention
Account an aggregate amount calculated in accordance with the following
formula:
a=Axn/N
where:
a = the relevant aggregate amount of the Earnings
and/or, as the case may be, Requisition Compensation to
be transferred to the Retention Account out of the
Earnings Accounts;
37
A = the aggregate amount required to pay the interest in
respect of the Loans (provided that for the purposes of
this Clause 12.4, scheduled interest in respect of the
Hedged Portion shall be deemed to be payable at the
applicable Fixed Rate), payable on the next Interest
Payment Date;
N = the number of days in the relevant Retention Period
for each Loan; and
n = actual number of days elapsed from (and including)
the immediately preceding Earnings Deposit Date in the
Retention Period for each Loan or the first day of the
Retention Period for each Loan (where there is no
preceding Initial Earnings Deposit Date in a Retention
Period) up to (but excluding) the relevant Earnings
Deposit Date.
PROVIDED ALWAYS that on the last Earnings Deposit Date for a Retention
Period and, if there remains a shortfall on the last day of a Retention
Period there shall be transferred to the Retention Account out of each
of the Earnings Accounts an aggregate amount (taking into account the
existing balance of the Retention Account) required to pay the interest
payable in respect of the Loans on the next Interest Payment Date in
full.
12.5 ADDITIONAL TRANSFERS TO THE RETENTION ACCOUNT ON FACILITY REDUCTION
DATES
In addition to the transfers to the Retention Account required pursuant
to Clause 12.4, in respect of each Loan, from the date falling 4 years
and 9 months after the Closing Date each Borrower shall procure that on
each Earnings Deposit Date there is transferred to the Retention Account
(and if the Representative Borrower does not forthwith procure such a
transfer, then that Borrower irrevocably authorises the Facility Agent
to instruct the Account Bank to transfer from the Earnings Accounts) an
aggregate amount calculated in accordance with the following formula:
a=Axn/N
where:
a = the relevant aggregate amount of the Earnings
and/or, as the case may be, Requisition Compensation to
be transferred to the Facility Reduction Retention
Account out of the Earnings Accounts;
A = the aggregate amount (if any) required to repay the
principal in respect of the Loans, payable on the next
Facility Reduction Date or, in the final Facility
Reduction Retention Period, the Final Maturity Date;
N = the number of days in the relevant Facility Reduction
Retention Period; and
n = actual number of days elapsed from (and including)
the immediately preceding Earnings Deposit Date in the
Facility Reduction Retention Period or the first day of
the Facility Reduction Retention Period (where there is
no preceding Earnings Deposit Date in a Facility
Reduction Retention Period) up to (but excluding) the
Earnings Deposit Date.
PROVIDED ALWAYS that on the last Earnings Deposit Date for a Facility
Reduction Retention Period and, if there remains a shortfall on the last
day of a Facility Reduction Retention Period there shall be transferred
to the Retention Account out of the Earnings Accounts an aggregate
amount (taking into account the existing balance of the Retention
Account) required to pay the aggregate of the principal payable in
respect of the Loans on the next Facility Reduction Date or, as the case
may be, the Final Maturity Date in full.
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12.6 ADDITIONAL PAYMENTS TO RETENTION ACCOUNTS
If for any reason the aggregate amount standing to the credit of the
Earnings Accounts shall be insufficient to make any transfer to the
Retention Account required by Clause 12.4 (Transfers to Retention
Account in respect of interest on Loans) or 12.5 (Additional Transfers
to the Retention Account on Facility Reduction Dates), as the case may
be, the Representative Borrower shall, without demand, procure that
there is credited to the Retention Account, within four Business Days of
the date on which the relevant amount would have been transferred from
the Earnings Accounts, an aggregate amount equal to the amount of the
shortfall.
12.7 APPLICATION OF RETENTION ACCOUNTS
The Representative Borrower shall instruct and authorise the Account
Bank to transfer from the Retention Account (and if the Representative
Borrower does not forthwith procure such a transfer then the
Representative Borrower irrevocably authorises the Facility Agent to
instruct the Account Bank to transfer from the Retention Account) to the
Facility Agent in respect of each Loan:
(a) subject to the terms of the DPP, on each Interest Payment Date:
(i) to the extent that a Borrower is required to make a
periodic payment to the Swap Banks under any Swap
Agreements, the Representative Borrower shall procure
that (and if the Representative Borrower does not
forthwith procure such a transfer then the
Representative Borrower irrevocably authorises the
Facility Agent to instruct the Account Bank to transfer
from the Retention Account) an amount equal to the
aggregate of any such periodic payments is transferred
forthwith from the Retention Account to the relevant
Swap Banks in accordance with the DPP; and
(ii) to the extent that any Swap Bank is required to make a
periodic payment to any Borrower under any Swap
Agreement then the relevant Borrower shall procure that
the relevant Swap Bank pays such periodic payment into
the Retention Account forthwith.
(b) (i) on each Facility Reduction Date, the amount of the repayment
of that Loan (if any) due in accordance with Clause 5.2
(Repayment on Facility Reduction Dates); and
(ii) on each Interest Payment Date in respect of a Loan, the
amount of interest then due on that Loan.
12.8 BORROWERS' OBLIGATIONS NOT AFFECTED
If for any reason the amount standing to the credit of the Retention
Account is insufficient to repay any Loan in accordance with Clause 5.2
(Repayment on Facility Reduction Dates) or to make any payment of
interest when due, the Borrowers' obligation to repay that Loan or to
make that payment of interest shall not be affected.
12.9 RELEASE OF SURPLUS
The Lenders agree that, subject to no Event of Default having occurred
that is continuing, following the Primary Transfers, each Borrower shall
be entitled to withdraw any sums of money standing to the credit of the
Earnings Accounts in the following circumstances: (i) in or towards
payment of any amount which that Borrower may be required to pay
pursuant to the terms of any Finance Document and (ii) thereafter, for
use in the ordinary course of business of the group of companies to
which that Borrower belongs.
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13. PAYMENTS
13.1 PLACE
Unless a Finance Document specifies that payments under it are to be
made in another manner, all payments by a Party (other than the Facility
Agent) under the Finance Documents must be made to the Facility Agent to
its account with such office or bank in New York as it may notify to
that Party for this purpose by not less than five (5) Business Days'
prior notice.
13.2 FUNDS
Payments under the Finance Documents to the Facility Agent must be made
for value on the due date at such times and in such funds as the
Facility Agent may specify to the Party concerned as being customary at
the time for the settlement of transactions in the relevant currency in
the place for payment.
13.3 DISTRIBUTION
(a) Each payment received by the Facility Agent under the Finance
Documents for another Party must, except as provided below, be
made available by the Facility Agent to that Party by payment
(as soon as practicable after receipt) to its account with such
office or bank as it may notify to the Facility Agent for this
purpose by not less than five (5) Business Days' prior notice.
(b) The Facility Agent may apply any amount received by it from any
of the Borrowers in or towards payment (as soon as practicable)
of any amount due from the Borrowers under the Finance Documents
or in or towards the purchase of any amount of any currency to
be so applied.
(c) Where a sum is paid to the Facility Agent under this Agreement
for another Party, the Facility Agent is not obliged to pay that
sum to that Party until it has established that it has actually
received it. However, the Facility Agent may assume that the sum
has been paid to it, and, in reliance on that assumption, make
available to that Party a corresponding amount. If it transpires
that the sum has not been received by the Facility Agent, that
Party must immediately on demand by the Facility Agent refund
any corresponding amount made available to it together with
interest on that amount from the date of payment to the date of
receipt by the Facility Agent at a rate calculated by the
Facility Agent to reflect its cost of funds.
13.4 CURRENCY
All amounts payable under the Finance Documents are payable in Dollars
provided always that amounts payable in respect of costs and expenses
are payable in the currency in which those costs and expenses are
incurred.
13.5 NO SET-OFF OR COUNTERCLAIM
All payments made by any Borrower under the Finance Documents must other
than by reason of netting under any Swap Agreements be made without
set-off or counterclaim.
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13.6 BUSINESS DAYS
(a) If a payment under the Finance Documents is due on a day which
is not a Business Day, the due date for that payment will
instead be the next Business Day in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement interest is payable on that
principal at the rate payable on the original due date.
13.7 PAYMENTS
(a) Subject to the terms of the DPP, if any Administrative Party
receives a payment insufficient to discharge all the amounts
then due and payable by the Borrowers under the Finance
Documents, then, except to the extent otherwise provided in any
Finance Document, the Administrative Party must apply that
payment towards the obligations of the Borrowers under the
Finance Documents in the following order:
(i) FIRST, in or towards payment or satisfaction pro rata of
all costs, charges, sales taxes, expenses and
liabilities incurred and payments made by the Finance
Parties (other than the Swap Banks) or any receiver and
all remuneration payable to the Finance Parties or any
receiver under or pursuant to the Security Documents
including, without limitation, legal expenses,
re-instatement costs and any costs incurred in
recovering possession of the Security Assets;
(ii) SECOND, in or towards payment pro rata of any unpaid
fees, costs and expenses of the Finance Parties (other
than the Swap Banks) to the extent not recovered under
paragraph (i) above under this Agreement and the Finance
Documents;
(iii) THIRD, in or towards payment pro rata of any accrued but
unpaid interest payable to the Finance Parties (other
than the Swap Banks) under this Agreement and the
Finance Documents;
(iv) FOURTH, in or towards payment pro rata of any Break
Costs of the Lenders due but unpaid and payable to the
Finance Parties (other than the Swap Banks) under this
Agreement and the Finance Documents;
(v) FIFTH, in or towards payment pro rata of any principal
in respect of this Agreement and the Finance Documents
due but unpaid;
(vi) SIXTH, in or towards payment pro rata to the Finance
Parties (other than the Swap Banks) of any other amounts
which are due but unpaid by the Borrowers to any of the
Finance Parties (other than the Swap Banks) under the
Finance Documents in such order as the Finance Parties
(other than the Swap Banks) shall in their absolute
discretion determine;
(vii) SEVENTH, any periodic payments (not being payments as a
result of termination or closing out) due but unpaid pro
rata to the Swap Banks under the Swap Agreements;
(viii) EIGHTH, in or towards payment pro rata of payments as a
result of termination or closing out due but unpaid to
the Swap Banks; and
(ix) NINTH, after all amounts payable or which may become
payable under the Finance Documents have been paid in
full and the Finance Documents have been discharged
41
and the payments under subparagraph (viii) have been
made, in payment of the surplus, if any, to the
Representative Borrower or other persons entitled
thereto.
(b) Subject to the terms of the DPP, the Facility Agent must, if so
directed by all the Lenders, vary the order set out at
paragraphs (a)(ii) to (a)(vi) above.
(c) This Clause 13.7 will override any appropriation made by a
Borrower.
13.8 TIMING OF PAYMENTS
If a Finance Document does not provide for when a particular payment is
due, that payment will be due within three (3) Business Days of demand
by the relevant Finance Party.
14. REPRESENTATIONS
14.1 REPRESENTATIONS
The representations set out in this Clause 14 are made, unless otherwise
stated, by each Borrower in respect of itself or (if the relevant
provision so states) one or more of them each in respect of itself to
the Finance Parties.
14.2 STATUS
(a) With respect to the Representative Borrower, it is a limited
liability company, duly incorporated and validly existing under
the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands and with
respect to each of the Borrowers other than the Representative
Borrower, it is a limited liability company, duly formed and
validly existing under the laws of its jurisdiction of
incorporation.
(b) It and each of its Subsidiaries, if any, has the power to own
its assets and carry on its business as it is being conducted.
(c) The Representative Borrower is the legal and beneficial owner of
all the share capital of each of the other Borrowers.
14.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into and performance of, the Finance
Documents to which it is or will be a party and the transactions
contemplated by those Finance Documents.
14.4 LEGAL VALIDITY
Subject to any general principles of law limiting its obligations and
referred to in any legal opinion required under this Agreement, each
Finance Document to which it is a party is its legally binding, valid
and enforceable obligation.
14.5 NON-CONFLICT
The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents to which it is a party do not
conflict in any material respect with:
(a) any law or regulation applicable to it;
(b) its or any of its Subsidiaries' constitutional documents; or
42
(c) any document which is binding upon it or any of its Subsidiaries
or any of its or its Subsidiaries' assets.
14.6 NO DEFAULT
(a) No Default is outstanding or will result from the execution of,
or the performance of any transaction contemplated by, any
Finance Document.
(b) No other event is outstanding which constitutes a default under
any document which is binding on it or any of its Subsidiaries
or any of its or its Subsidiaries' assets to an extent or in a
manner which is reasonably likely to have a Material Adverse
Effect.
14.7 AUTHORISATIONS
Except for registration of (i) the Mortgages and the relevant Vessels at
the registry of the Approved Flag State, (ii) any Security Agreement
creating a charge over Security Assets of the Borrowers with the
Registrar of Companies in the jurisdiction of incorporation of the
relevant Borrower or (iii) any relevant Security Agreement under the
Companies ▇▇▇ ▇▇▇▇, all authorisations required by it in connection with
the entry into, performance, validity and enforceability of, and the
transactions contemplated by, the Finance Documents have been obtained
or effected (as appropriate) and are in full force and effect.
14.8 FINANCIAL STATEMENTS
The audited consolidated financial statements of the Representative
Borrower most recently delivered to the Facility Agent (or, until
delivery of the first audited financial statements, the Opening Balance
Sheet) together with any other financial information supplied to the
Facility Agent by the Representative Borrower:
(a) have been prepared in accordance with U.S. GAAP, consistently
applied;
(b) have been audited in accordance with U.S. GAAP; and
(c) fairly represent its financial condition (consolidated, if
applicable) as at the date to which they were drawn up,
except, in each case, as disclosed to the contrary in those financial
statements or other information.
14.9 NO MATERIAL ADVERSE CHANGE
There has been no material adverse change in the ability of the
Borrowers to make all the required payments under this Agreement or the
validity or enforceability of this Agreement since the date of the IPO
or following the receipt by the Facility Agent of a Compliance
Certificate, since the date of the then latest Compliance Certificate.
14.10 LITIGATION
No litigation, arbitration or administrative proceedings of or before
any court, arbitral body or agency (including, but not limited to,
investigative proceedings) which, if on the balance of probabilities is
likely to be adversely determined, might reasonably be expected to have
a Material Adverse Effect have (to the best of its knowledge and belief)
been started against the Borrowers or any of them.
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14.11 PARI PASSU RANKING
Its payment obligations under the Finance Documents rank at least pari
passu with all its other present and future unsecured and unsubordinated
payment obligations, except for obligations mandatorily preferred by law
applying to companies generally.
14.12 TAXES ON PAYMENTS
All amounts payable by it to the Facility Agent under the Finance
Documents and the Related Contracts may be made without any Tax
Deduction.
14.13 STAMP DUTIES
Except as notified in writing to and accepted by the Facility Agent, no
stamp or registration duty or similar Tax or charge is payable in its
jurisdiction of incorporation in respect of any Finance Document or
Related Contract.
14.14 ENVIRONMENT
Except as may already have been disclosed by the Representative Borrower
in writing to the Facility Agent:
(a) each of the Borrowers and their respective Environmental
Affiliates have, without limitation, complied with the
provisions of all applicable Environmental Laws in relation to
each Vessel actually delivered to it;
(b) each of the Borrowers and their respective Environmental
Affiliates have obtained all requisite Environmental Approvals
in relation to each Vessel actually delivered to it and are in
compliance with such Environmental Approvals;
(c) neither the Borrowers nor any of their respective Environmental
Affiliates have received notice of any Environmental Claim in
relation to a Vessel actually delivered to a Borrower which
alleges that any of the Borrowers or any of their respective
Environmental Affiliates is not in compliance with applicable
Environmental Laws in relation to such Vessel or Environmental
Approvals in relation to such Vessel;
(d) there is no Environmental Claim in relation to any Vessel
actually delivered to that Borrower pending or threatened which
is such that a first class owner or operator of vessels such as
the Vessels, making all due enquiries and complying in all
respects with its obligations under the ISM Code, ought to have
known about; and
(e) there has been no Release of Hazardous Materials by or in
respect of any Vessel actually delivered to a Borrower, about
which a first class owner or operator of vessels such as the
Vessels making all due enquiries and complying in all respects
with its obligations under the ISM Code ought to have known
about.
14.15 SECURITY INTERESTS
No Security Interest exists over its or any of its Subsidiary's assets
which would cause a breach of Clause 16.5 (Security Interests).
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14.16 SECURITY ASSETS
Each Borrower is or will on the creation of the relevant Security
Interest solely and absolutely entitled to the Security Assets over
which it has or will create any Security Interest pursuant to the
Security Documents to which it is, or will be, a party and there is no
agreement or arrangement under which it is obliged to share any proceeds
of or derived from such Security Assets with any third party.
14.17 ISM CODE COMPLIANCE
In respect of the Delivered Vessels, the Subsequent Vessels and any
Additional Vessel, on the Delivery Date in respect of the relevant
Vessel, the relevant Borrower is in full compliance with the ISM Code in
respect of that Vessel.
14.18 ISPS CODE COMPLIANCE
In respect of the Delivered Vessels, the Subsequent Vessels and any
Additional Vessel, on the Delivery Date in respect of the relevant
Vessel, the relevant Borrower is in full compliance with the ISPS Code
in respect of that Vessel.
14.19 NO AMENDMENTS TO RELATED CONTRACTS
Other than as notified to and agreed by the Facility Agent in writing,
there have been no amendments to any of the Related Contracts.
14.20 MONEY LAUNDERING
Any borrowing by each Borrower and the performance of its obligations
hereunder and under the other Finance Documents to which it is a party
will be for its own account and will not involve any breach by it of any
law or regulatory measure relating to money laundering as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities or any equivalent law or regulatory measure in any other
jurisdiction.
14.21 INSOLVENCY
(a) No Borrower is unable, nor admits or has admitted its inability,
to pay its debts or has suspended making payments on any of its
debts.
(b) No Borrower has commenced, or intends to commence, negotiations
with one or more of its creditors with a view to rescheduling
any of its Financial Indebtedness.
(c) The value of the assets of each Borrower is not less than its
liabilities (taking into account contingent and prospective
liabilities).
(d) No moratorium has been, or may, in the reasonably foreseeable
future be, declared in respect of any indebtedness of any
Borrower.
(e) No reorganisation or liquidation of any Borrower has occurred.
14.22 IMMUNITY
(a) The execution by it of each Finance Document to which it is a
party constitutes, and the exercise by it of its rights and
performance of its obligations under each such Finance Document
will constitute, private and commercial acts performed for
private and commercial purposes.
45
(b) It will not be entitled to claim immunity from suit, execution,
attachment or other legal process in any proceedings taken in
its jurisdiction of incorporation in relation to any Finance
Document.
14.23 NO ADVERSE CONSEQUENCES
(a) It is not necessary under the laws of its jurisdiction of
incorporation:
(i) in order to enable any Finance Party to enforce its
rights under any Finance Document; or
(ii) by reason of the execution of any Finance Document or
the performance by it of its obligations under any
Finance Document,
that any Finance Party should be licensed, qualified or
otherwise entitled to carry on business in each Borrower's
jurisdiction of incorporation; and
(b) No Finance Party will be deemed to be resident, domiciled or
carrying on business in its jurisdiction of incorporation by
reason only of the execution, performance and/or enforcement of
any Finance Document.
14.24 JURISDICTION/GOVERNING LAW
(a) Its:
(i) irrevocable submission under this Agreement to the
jurisdiction of the courts of England;
(ii) agreement that this Agreement is governed by English
law; and
(iii) agreement not to claim any immunity to which it or its
assets may be entitled,
are legal, valid and binding under the laws of each relevant
Borrower's jurisdiction of incorporation.
(b) Any judgment obtained in England will be recognised and be
enforceable by the courts of each relevant Borrower's
jurisdiction of incorporation, subject to any statutory or other
conditions of such jurisdiction.
14.25 TIMES FOR MAKING REPRESENTATIONS
(a) The representations set out in this Clause 14 are made by each
Original Borrower on the date of this Agreement.
(b) Unless a representation is expressed to be given at a specific
date (in which event it shall be deemed to be given on that
date), the representations in Clauses:
(i) 14.2 (Status), 14.3 (Powers & Authority), 14.4 (Legal
Validity), 14.5 (Non-conflict), 14.6 (No Default) 14.7
(Authorisations), 14.8 (Financial Statements), 14.11
Pari Passu Ranking), 14.21 (Insolvency), 14.22
(Immunity) and 14.24 (Jurisdiction/Governing Law) are
deemed to be repeated by each Borrower on the date of
each Request , on each Utilisation Date and the first
day of each Term.;
(ii) 14.9 (No material adverse change), 14.10 (Litigation),
are deemed to be repeated by each Borrower on each
Utilisation Date; and
46
(iii) 14.14 (Environment), 14.16 (Security Assets), 14.19 (No
amendments to Related Contracts) and 14.20 (Money
laundering) are deemed to be repeated on each
Utilisation Date in respect of, the Vessel being
delivered/financed on that date, the Related Contracts
relating to that Vessel (in the case of 14.14
(Environment)) and the borrowing being made on that date
(in the case of 14.20 (Money laundering)).
(c) When a representation is repeated, it is applied to the
circumstances existing at the time of repetition.
15. INFORMATION COVENANTS
15.1 FINANCIAL STATEMENTS
(a) The Representative Borrower must supply to the Facility Agent in
sufficient copies (which may take the form of an electronic
copy) for all the Lenders:
(i) its audited consolidated financial statements for each
of its financial years ending after the date hereof;
(ii) the other Borrowers' unaudited financial statements for
each of their financial years ending after the date
hereof; and
(iii) its quarterly management accounts for each quarter-year
of each of its financial years.
(b) All financial statements must be supplied promptly after they
are available and in any event:
(i) in the case of audited consolidated financial statements
of the Representative Borrower, within 120 days of the
end of the relevant financial period;
(ii) in the case of unaudited financial statements of each
other Borrower, within 120 days of the end of the
relevant financial period; and
(iii) in the case of quarterly management accounts of the
Representative Borrower, within sixty (60) days of the
end of each quarter.
(c) The Facility Agent shall send to each Lender all of the
financial statements received by it under this Clause 15.1
within fifteen (15) days of receipt of such financial
statements.
15.2 FORM OF FINANCIAL STATEMENTS
(a) Each Borrower must ensure that each set of its financial
statements supplied under this Agreement fairly represents the
financial condition (consolidated or otherwise) of the relevant
person as at the date to which those financial statements were
drawn up.
(b) The Representative Borrower must notify the Facility Agent of
any change to the basis on which its audited financial
statements are prepared.
(c) If requested by the Facility Agent, the Representative Borrower
must supply or procure that the following are supplied to the
Facility Agent:
(i) a full description of any change notified under
paragraph (b) above; and
(ii) sufficient information to enable the Facility Agent to
make a proper comparison between the financial position
shown by the set of financial statements prepared on
47
the changed basis and its most recent audited
consolidated financial statements delivered to the
Facility Agent under this Agreement.
(d) If requested by the Facility Agent, the Representative Borrower
must enter into discussions for a period of not more than thirty
(30) days with a view to agreeing to any amendments required to
be made to this Agreement to place the Facility Agent in the
same position as it would have been in if the change had not
happened. Any agreement between the Representative Borrower and
the Facility Agent will be, with the prior consent of the
Majority Lenders, binding on all parties.
(e) If no agreement is reached under paragraph (d) above on the
required amendments to this Agreement, the Representative
Borrower must ensure that its auditors certify those amendments;
the certificate of the auditors will be, in the absence of
manifest error, binding on all the Parties.
15.3 COMPLIANCE CERTIFICATE
(a) The Representative Borrower must supply to the Facility Agent a
Compliance Certificate in the form attached at Part 3 of
Schedule 7within 120 days of 31 December 2007 and thereafter (i)
within 60 days of each quarter end for each quarter other than
the last quarter of each year, and (ii) within 120 days of the
quarter end for the fourth quarter of each year, with in each
case, each set of its financial statements sent to the Facility
Agent under this Agreement.
(b) Each Compliance Certificate supplied by the Representative
Borrower must be signed by its chief financial officer or chief
executive officer.
15.4 ACCESS TO BOOKS AND RECORDS
Upon the request of the Facility Agent, the Representative Borrower
shall provide the Facility Agent and any of its representatives,
professional advisors and contractors with access to, and permit
inspection of, its duly authorised and each of the other Borrower's
books and records, in each case at reasonable times and upon reasonable
notice, if the Facility Agent is unable to obtain or locate such
information from the SEC website or the Representative Borrower's
website.
15.5 INFORMATION - MISCELLANEOUS
The Representative Borrower must supply to the Facility Agent in
sufficient copies (which may take the form of an electronic copy) for
all the Lenders:
(a) copies of all documents despatched by it to its creditors
generally or any class of them or, as the case may be, by any
Borrowers to its creditors or any class of them at the same time
as they are despatched;
(b) copies of all notices and minutes relating to any Extraordinary
General Meeting of its or any Borrower's shareholders at the
same time as they are despatched;
(c) promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current, or
to the knowledge of a Borrower threatened or pending against it
or any Borrower and which might, if adversely determined, have a
Material Adverse Effect; and
48
(d) promptly on request, such further information, in sufficient
copies for all the Lenders, regarding the financial condition
and operations of the Borrower or any Borrower as the Facility
Agent may reasonably request.
15.6 NOTIFICATION OF DEFAULT
(a) Unless the Facility Agent has already been so notified, the
Representative Borrower must notify the Facility Agent of any
Default (and the steps, if any, being taken to remedy it)
promptly upon becoming aware of its occurrence.
(b) Promptly on request by the Facility Agent but not more often
than once in each period of 12 months, unless the Facility
Agent, acting reasonably, believes an Event of Default has
occurred and is continuing (in which event the Facility Agent
shall be entitled to make such requests as and when it considers
it appropriate to do so), the Representative Borrower must
supply to the Facility Agent a certificate, signed by two of its
authorised signatories on its behalf, certifying that no Default
is outstanding or, if a Default is outstanding, specifying the
Default and the steps, if any, being taken to remedy it.
15.7 YEAR END
None of the Borrowers may change its financial year end without the
prior consent of the Facility Agent, such consent not to be unreasonably
withheld.
15.8 KNOW YOUR CUSTOMER REQUIREMENTS
(a) Each Borrower must promptly, on the request of the Facility
Agent, supply to it any documentation or other evidence which is
reasonably requested by the Facility Agent (whether for itself,
on behalf of a Finance Party or any prospective new Lender) to
enable a Finance Party or prospective new Lender to carry out
and be satisfied with the results of all applicable know your
customer requirements.
(b) Each Lender must promptly on the request of the Facility Agent
supply to the Facility Agent any documentation or other evidence
which is reasonably required by the Facility Agent to carry out
and be satisfied with the results of all know your customer
requirements.
16. GENERAL COVENANTS
16.1 GENERAL
Each Borrower agrees to be bound by the covenants set out in this Clause
16 relating to it. To the extent that a Vessel ceases to be a Vessel in
accordance with the terms of this Agreement, the relevant Borrower shall
no longer be bound by the covenants set out in this Clause 16 in so far
as these covenants relate to that Vessel.
16.2 AUTHORISATIONS
Each Borrower must promptly obtain, maintain and comply, in all material
respects, with the terms of any authorisation required under any
Applicable Law to enable it to perform its obligations under, or for the
validity or enforceability of, any Finance Document.
49
16.3 COMPLIANCE WITH LAWS
Each Borrower must comply and must procure that the Manager complies in
all respects with all Applicable Laws to which it is subject where
failure to do so is reasonably likely to have a Material Adverse Effect.
16.4 PARI PASSU RANKING
Each Borrower must ensure that its payment obligations under the Finance
Documents rank at least pari passu with all its other present and future
unsecured and unsubordinated payment obligations, except for obligations
mandatorily preferred by law applying to companies generally.
16.5 SECURITY INTERESTS
No Borrower shall, and shall procure that the Manager does not, create
or permit to subsist any Security Interest over the Obligatory
Insurances or any other Security Assets or any Related Contract other
than:
(a) Permitted Liens; or
(b) with the prior written consent of the Facility Agent (acting on
the instructions of the Majority Lenders).
16.6 DISPOSALS
(a) The Representative Borrower may not during any period of three
consecutive calendar years, either in a single transaction or in
a series of transactions and whether related or not and whether
voluntary or involuntary, sell, transfer or otherwise dispose of
any of its assets with a net (taking into account acquisitions)
aggregate value in excess of US$300,000,000 (of which no more
than US$200,000,000 in aggregate shall be in respect of
Identified Vessels (calculated on the basis of the sale prices
of such Identified Vessels)), in each case, without the consent
of the Facility Agent (acting on the instructions of the
Majority Lenders).
(b) Except as provided in paragraphs (c) and (d) below, no Borrower
other than the Representative Borrower may, either in a single
transaction or in a series of transactions and whether related
or not and whether voluntary or involuntary, sell, transfer or
otherwise dispose of all or any part of its assets.
(c) Paragraph (b) above does not apply to any disposal (i) between
Borrowers (ii) in the ordinary course of business on an arm's
length basis, for fair market value in respect of any Borrower
other than the Representative Borrower or (iii) of assets (other
than any Vessel) in exchange for other assets comparable or
superior as to type, value and quality or (iv) any other
disposal consented to in writing by the Facility Agent (acting
on the instructions of the Majority Lenders).
(d) To the extent that Identified Vessels are owned by any Borrower
other than the Representative Borrower, the Borrowers shall be
entitled to dispose of such Identified Vessels, provided that no
more than US$200,000,000 worth of Identified Vessels (calculated
on the basis of the sale prices of such Identified Vessels (when
aggregated with the sale prices of Identified Vessels disposed
of by all of the Borrowers) are disposed of during any period of
three consecutive calendar years. Transfers between Borrowers
shall be ignored for the purposes of this Clause.
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16.7 CHANGES TO OWNERSHIP
(a) Subject to the Pledges of Shares, the Representative Borrower
shall, at all times, remain the legal and beneficial owner of
all of the issued shares in each other Borrower.
(b) During the first three (3) months after the Closing Date, the
shareholding of CMA CGM in the Representative Borrower shall not
be reduced in accordance with Rule 144 of the Securities
Exchange Commission.
16.8 NO OTHER BUSINESS ASSETS OR FINANCIAL INDEBTEDNESS
(a) The Borrowers shall not engage in any business other than the
direct or indirect ownership, operation, management and
chartering of container vessels and any business incidental
thereto, nor shall any Borrower incur any Financial Indebtedness
to be secured in any way on the Vessels, or any of them, or any
other Security Asset other than the Financial Indebtedness
contemplated by this Agreement or the Swap Agreements.
(b) The Representative Borrower and GSLS may incur (subject to
paragraph (d) below)other indebtedness or issue guarantees
against financial loss of any person on an unsecured basis or
secured on assets which are not, and will not at any time be,
Security Assets.
(c) No Borrower other than the Representative Borrower and GSLS may
incur or permit to be outstanding any Financial Indebtedness
other than (i) Financial Indebtedness incurred under the Finance
Documents; (ii) any trade debt or expenses related to the
operation, maintenance, ownership or use of a Vessel incurred by
the relevant Borrower in the ordinary course of business and
(iii) inter-company debt owed to or from another Borrower.
(d) Any inter-company debt owed by the Representative Borrower or by
GSLS to a company which is not a Borrower shall be fully
subordinated to any Financial Indebtedness under the Finance
Documents.
16.9 PAYMENT OF DIVIDENDS
The Representative Borrower shall not pay any dividends or make any
other distributions (whether by loan or otherwise) to shareholders
unless, under Applicable Law and accounting principles in its
jurisdiction of incorporation it is entitled to distribute such dividend
or such other distribution, no Event of Default has occurred and is
continuing or would result from the payment of such dividend or other
distribution and it is in compliance with its funding obligations in
respect of the Retention Accounts.
16.10 CHANGE OF BUSINESS
(a) Unless otherwise agreed with the Facility Agent, the
Representative Borrower must maintain its place of business, and
keep its corporate documents and records, at the address stated
in the definition of Representative Borrower on the first page,
and the Representative Borrower will not establish, or do
anything as a result of which it would be deemed to have, a
place of business in any country other than the Republic of the
▇▇▇▇▇▇▇▇ Islands or Bermuda unless otherwise agreed with and
notified to the Facility Agent such agreement not to be
unreasonably withheld.
(b) Unless otherwise agreed with the Facility Agent, each other
Borrower must maintain its place of business, and keep its
corporate documents and records, (i) in the case of an Original
Borrower at the relevant address stated in the definition of
Original Borrower on page one and (ii) in the case of any other
Borrowers (other than the Representative
51
Borrower), at an address in Cyprus, the ▇▇▇▇▇▇▇▇ Islands or the
United Kingdom stated in the Borrower Accession Agreement
pursuant to which such person becomes a Borrower., No Borrower
will establish, or do anything as a result of which it would be
deemed to have, a place of business in any country other than
the country stated in the definition of Original Borrower on
page one or the United Kingdom (in the case of an Original
Borrower) or in Cyprus, the ▇▇▇▇▇▇▇▇ Islands or the United
Kingdom (in the case of any other Borrower (other than the
Representative Borrower)) unless otherwise agreed with and
notified to the Facility Agent such agreement not to be
unreasonably withheld.
(c) Any change in the place of business of:
(i) the Representative Borrower from the ▇▇▇▇▇▇▇▇ Islands to
Bermuda or vice versa shall be promptly notified in
writing to the Facility Agent;
(ii) any Original Borrower from the country stated in the
definition of Original Borrower on page one to the
United Kingdom or vice versa; or
(iii) any other Borrower (other than the Representative
Borrower or an Original Borrower) from one in Cyprus,
the ▇▇▇▇▇▇▇▇ Islands or the United Kingdom to another in
Cyprus, the ▇▇▇▇▇▇▇▇ Islands or the United Kingdom,
shall be promptly notified in writing to the Facility Agent.
16.11 MERGERS
No Borrower shall enter into any amalgamation, demerger, merger or
reconstruction otherwise than under an intra-group re-organisation on a
solvent basis or other transaction agreed by the Facility Agent (acting
on the instructions of the Majority Lenders).
16.12 SECURITY
The relevant Borrower:
(a) will procure, at the Applicable Time, that the relevant Mortgage
is submitted for registration with the registry of the relevant
Approved Flag State and that upon registration the relevant
Mortgage will, and will continue to be, registered as a first
priority mortgage with the registry of the relevant Approved
Flag State;
(b) without prejudice to paragraph (a) above will procure that the
Mortgages and any other security conferred by it under any
Security Document are registered as a first priority interest
with the relevant authorities within the period prescribed by
the Applicable Laws and is maintained and perfected with the
relevant authorities;
(c) will at its own cost, use best efforts to ensure that any
Finance Document validly creates the obligations and Security
Interests which it purports to create; and
(d) without limiting the generality of paragraph (a) above, will at
its own cost, promptly register, file, record or enrol any
Finance Document with any court or authority, pay any stamp,
registration or similar tax payable in respect of any Finance
Document, give any notice or take any other step which, in the
reasonable opinion of the Facility Agent, is or has become
necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence in its jurisdiction of
incorporation, any jurisdiction where the relevant Borrower has
a place of business and the jurisdiction which is the relevant
Vessel's
52
Approved Flag State or to ensure or protect the priority of any
Security Interest which it creates.
16.13 TRANSACTIONS WITH AFFILIATED COMPANIES
No Borrower may enter into any material transaction with any Affiliate
of it unless it is either (i) to comply with any obligations that
Borrower may have under the Finance Documents or (ii) on an arm's length
basis or on terms reasonably consistent with and having a substantially
similar commercial effect to an arm's length transaction.
16.14 REGISTRATION OF THE VESSELS
(a) The relevant Borrower shall and procure that the Manager shall:
(i) procure and maintain with effect from the Applicable
Time, the valid and effective provisional registration
of the relevant Vessel under the flag of the relevant
Approved Flag State and shall effect permanent
registration of the Vessel within six months or such
shorter period of time for which a provisional
registration is valid for the Approved Flag which
relates to that Vessel, from the Applicable Time or, if
earlier, the date on which the provisional registration
of such Vessel ceases to be valid and shall ensure
nothing is done or omitted by which the registration of
the Vessels would or might be defeated or imperilled;
and
(ii) not change the name of its Vessel without notifying the
Facility Agent, or change the port of registration of
its Vessel to an Approved Flag State without complying
with paragraph (c) below.
(b) As at the date of this Agreement, each of the Approved Flag
States is regarded by the Lenders as an acceptable state of
registration, subject to the right of the Facility Agent (acting
on the reasonable instructions of the Majority Lenders) to treat
such Approved Flag State as not being acceptable at any time in
the future. If the Facility Agent notifies the Representative
Borrower to that effect, such Approved Flag State shall be
removed from Schedule 10 and Schedule 10 as so amended shall be
the list of Approved Flag States from then on for the purposes
of this Agreement. Subject to the prior approval of the Facility
Agent (acting on the reasonable instructions of the Majority
Lenders), the Representative Borrower may at any time request
that other flag states are to be included in the list of
Approved Flag States. Following such approval, Schedule 10 shall
be amended so as to include such new flag state and Schedule 10,
as so amended, shall be Schedule 10 from then on for the
purposes of this Agreement.
(c) Each Borrower shall provide the Facility Agent with 30 days'
notice of an intention to change the port of registration of its
Vessel to another Approved Flag State during which time the
Representative Borrower shall provide the Facility Agent with
such information as the Facility Agent requires to agree the
form of mortgages and the registration steps required in such
new Approved Flag State and the Facility Agent receives a legal
opinion from counsel in the Approved Flag State in form and
substance satisfactory to the Facility Agent and such other
documentary conditions precedent as the Facility Agent may
reasonably require.
16.15 PARTIAL PREPAYMENTS OR ADDITIONAL SECURITY
(a) The Borrowers will not permit the Leverage Ratio from time to
time to be higher than 75 per cent., such Leverage Ratio to be
tested as provided in paragraph (c) below.
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(b) If on any determination date the Leverage Ratio is higher than
75 per cent., the Borrowers will immediately following a request
of the Facility Agent to do so (i) prepay such amount of the
Loans as will ensure that the Leverage Ratio is less than or
equal to 75 per cent.; or (ii) provide or cause to be provided
to the Facility Agent such additional funds into the Retention
Account as is necessary to bring the Leverage Ratio equal to or
less than 75 per cent.; or; (iii) provide such additional
security, in all respects satisfactory to the Facility Agent
(acting on the instructions of the Majority Lenders), such that
the Leverage Ratio is less than or equal to 75 per cent. For the
purposes of determining the Leverage Ratio, the additional
security shall have attributed to it such value as the Facility
Agent (acting on the instructions of the Majority Lenders) shall
determine or in the case of additional security constituted by
cash, its full value.
(c) The Facility Agent shall be entitled to test such Leverage Ratio
on (i) the Closing Date and quarterly thereafter on each date on
which a Compliance Certificate is to be provided by the
Representative Borrower in accordance with Clause 15.3(a) and
(ii) on the date falling one (1) month before the expiry of any
Time Charter in respect of a Vessel or, in the event of the
early termination of a Time Charter, on the date falling two (2)
months after such termination, provided such Time Charter has
not, by such date, been extended on terms satisfactory to the
Facility Agent or a replacement Acceptable Charter has not been
entered into in respect of that Vessel. For the purposes of this
paragraph (c), the Market Value of the Vessels shall be
determined in accordance with Clause 18.1(a) (Valuation).
(d) If any Vessel becomes a Total Loss, it shall, as of the earlier
of (i) the date of receipt by the Facility Agent of the proceeds
of insurance relating to such Total Loss and (ii) the date
falling one hundred and twenty (120) days after the Date of
Total Loss, cease to be a Vessel for the purposes of this
paragraph (d), PROVIDED that, if any insurance proceeds or
Requisition Compensation are received by the Facility Agent in
respect of a Total Loss of such Vessel they shall be applied in
accordance with Clause 16.25 (Proceeds from sale or Total Loss
of a Vessel).
(e) Clauses 6.7 (Voluntary prepayment and cancellation) and 6.9
(Miscellaneous provisions) shall apply, mutatis mutandis, to any
prepayment made pursuant to this Clause.
16.16 CLASSIFICATION AND REPAIR
The relevant Borrower will, and will procure that the Manager will from
the Applicable Time:
(a) ensure that its Vessel is surveyed from time to time as required
by the classification society in which such Vessel is for the
time being entered (such classification society to be part of
the International Association of Classification Societies
(IACS)) and maintain and preserve such Vessel in good working
order and repair, ordinary wear and tear excepted, and in any
event in such condition as will entitle each to the
classification that it has as of the Delivery Date with Lloyds
Register of Shipping or Det Norske Veritas, (or to the
equivalent classification in another IACS classification society
of like standing acceptable to the Facility Agent (acting on the
instructions of the Majority Lenders, themselves acting
reasonably)), free of all material overdue conditions and
overdue recommendations;
(b) not without the prior written consent of the Facility Agent
(acting on the instructions of the Majority Lenders) (such
consent not to be unreasonably withheld), cause or permit to be
made any change to the classification society in which its
Vessel is for the time being entered;
(c) procure that, other than repairs and replacements required by
law or safety regulations, all repairs to or replacement of any
damaged, worn or lost parts or equipment shall be effected
54
in such manner (both as regards workmanship and quality of
materials) as not to diminish the value of its Vessel;
(d) other than as may be required by law or safety regulations, not
without the prior written consent of the Facility Agent acting
on the instructions of the Majority Lenders (such consent not to
be unreasonably withheld), remove any material part of its
Vessel, or any item of equipment installed on such Vessel unless
the part or item so removed is forthwith replaced by a suitable
part or item which is in the same condition as or better
condition than the part or item removed, is free from any
Security Interest (other than a Permitted Security Interest) or
any right in favour of any person other than the Facility Agent
and becomes on installation on that Vessel the property of the
Borrower owning the relevant Vessel and subject to the security
constituted by the relevant Security Document(s) provided that
the relevant Borrower may install and remove equipment owned by
a third party if the equipment can be removed without any risk
of damage to that Vessel;
(e) ensure that its Vessel complies with all Applicable Laws from
time to time applicable to vessels registered under the laws and
flag of the relevant Approved Flag State or such other flag,
under which that Vessel may be registered from time to time in
accordance with this Agreement; and
(f) other than as may be required by law or safety regulations, not
without the prior written consent of the Facility Agent (acting
on the instructions of the Majority Lenders) (such consent not
to be unreasonably withheld), cause or permit to be made any
substantial change in the structure, type or performance
characteristics of its Vessel and provide notification of such
substantial changes in structure, type or performance
characteristics of that Vessel to the Facility Agent and,
furthermore, provide confirmation to the Facility Agent that
such substantial change in structure, type or performance
characteristics of that Vessel shall not result in a breach of
any covenant under this Agreement.
16.17 LAWFUL AND SAFE OPERATION
Each Borrower will, and will procure that the Manager will, at all times
after the Applicable Time:
(a) operate its Vessel and cause its Vessel to be operated in a
manner consistent in all material respects with any and all
laws, regulations, treaties and conventions (and all rules and
regulations issued thereunder) from time to time applicable to
that Vessel;
(b) not cause or permit its Vessel to trade with, or within the
territorial waters of any country in which her safety could
reasonably be expected to be imperilled by exposure to piracy,
terrorism, arrest, requisition, confiscation, forfeiture,
seizure, destruction or condemnation as prize unless that Vessel
is insured for such trade on insurance terms which comply with
the requirements of Clauses 16.28 and 16.30;
(c) not cause or permit its Vessel to be employed in any manner
which will or may give rise to any reasonable degree of
likelihood that such Vessel would be liable to requisition,
confiscation, forfeiture, seizure, destruction or condemnation
as prize unless that Vessel is insured for such employment on
insurance terms which comply with the requirements of Clauses
16.28 and 16.30;
(d) not cause or permit its Vessel to be employed in any trade or
business which is forbidden by international law or is illicit
or in carrying illicit or prohibited goods;
(e) in the event of hostilities in any part of the world (whether
war be declared or not) not cause or permit its Vessel to be
employed in carrying any contraband goods and that she does not
55
trade in any zone after it has been declared a war zone by any
authority or by any of that Vessel's war risks Insurers unless
that Vessel's Insurers shall have confirmed to the Borrower that
such Vessel is held covered under the Obligatory Insurances for
the voyage(s) in question; and
(f) not charter its Vessel or permit its Vessel to serve under any
contract of affreightment with any foreign country or national
of any foreign country which would be contrary to Applicable Law
or would render any Finance Document or the security conferred
by the Security Documents unlawful.
16.18 REPAIR OF THE VESSELS
The relevant Borrower will not and will procure that the Manager will
not, at any time after the Applicable Time, put its Vessel into the
possession of any person for the purpose of work being done upon her
beyond the amount of 5 per cent. of the then Market Value of that Vessel
, other than for classification or scheduled dry docking unless the cost
of the relevant work is covered by insurance or such person shall have
given an undertaking to the Facility Agent not to exercise any lien on
that Vessel or Obligatory Insurances for the cost of that work or
otherwise.
16.19 ARRESTS AND LIABILITIES
The relevant Borrower will, and will procure that the Manager will, at
all times after the Applicable Time:
(a) pay and discharge all obligations and liabilities whatsoever
which have given or may give rise to liens (other than liens
arising in the ordinary course of operation of its Vessel in
each case for amounts the payment of which is not yet due or, if
due and payable, is being disputed in good faith by appropriate
proceeding (and for the payment of which adequate reserves have
been provided or are and continue to be available)) on or claims
enforceable against any that Vessel and take all reasonable
steps to prevent a threatened arrest of that Vessel;
(b) notify the Facility Agent promptly in writing of the levy of
either distress on its Vessel or her arrest, detention, seizure,
condemnation as prize, compulsory acquisition or requisition for
title or use and (save in the case of compulsory acquisition or
requisition for title or use) obtain her release within thirty
(30) days;
(c) pay and discharge when due all dues, taxes, assessments,
governmental charges, fines and penalties lawfully imposed on or
in respect of its Vessel or that Borrower except those which are
being disputed in good faith by appropriate proceedings (and for
the payment of which adequate reserves have been provided or are
and continue to be available) and provided that the continued
existence of such dues, taxes, assessments, governmental
charges, fines or penalties does not give rise to any reasonable
degree of likelihood that that Vessels would be liable to
arrest, requisition, confiscation, forfeiture, seizure,
destruction or condemnation as prize; and
(d) pay and discharge all other obligations and liabilities
whatsoever in respect of its Vessel and the Obligatory
Insurances except those which are being disputed in good faith
by appropriate proceedings (and for the payment of which
adequate reserves have been provided or are and continue to be
available) and provided that the continued existence of those
obligations and liabilities in respect of that Vessel and the
Obligatory Insurances does not give rise to any reasonable
degree of likelihood that that Vessel would be liable to arrest,
requisition, confiscation, forfeiture, seizure, destruction or
condemnation as prize and
56
provided always that each Vessel remains properly managed and
insured at all times in accordance with the terms of this
Agreement.
16.20 RELATED CONTRACTS
Save as agreed to the contrary in or permitted by the Finance Documents,
none of the Borrowers shall take any action, enter into any document or
agreement or omit to take any action or to enter into any document or
agreement which would, or could reasonably be expected to, cause any
Related Contract to cease to remain in full force and effect and shall
use all reasonable endeavours to procure that each other party to any
Related Contract does not take any action, enter into any document or
agreement or omit to take any action or to enter into any document or
agreement which would, or could reasonably be expected to, cause any
Related Contract to cease to remain in full force and effect.
16.21 ENVIRONMENT
The relevant Borrower shall, and shall procure that the Manager shall,
at all times after the Applicable Time:
(a) comply with all applicable Environmental Laws including, without
limitation, requirements relating to the establishment of
financial responsibility (and shall require that all
Environmental Affiliates of the Borrower comply with all
applicable Environmental Laws) and obtain and comply with all
required Environmental Approvals, which Environmental Laws and
Environmental Approvals relate to its Vessel or her operation or
her carriage of cargo; and
(b) promptly upon the occurrence of any of the following events,
provide to the Facility Agent a certificate of an officer of
that Borrower or of that Borrower's agents specifying in detail
the nature of the event concerned:
(i) the receipt by that Borrower or any Environmental
Affiliate (where that Borrower has knowledge of the
receipt) of any Environmental Claim in relation to its
Vessel; or
(ii) any Release of Hazardous Materials by its Vessel.
16.22 INFORMATION REGARDING THE VESSELS
The relevant Borrower shall, and shall procure that the Manager shall,
at all times after the Applicable Time in relation to its Vessel:
(a) promptly notify the Facility Agent of the occurrence of any
accident, casualty or other event which has caused or resulted
in or may cause or result in that Vessel being or becoming a
Total Loss;
(b) promptly notify the Facility Agent of any requirement or
recommendation made by any Insurer or classification society or
by any competent authority which is not complied with in a
timely manner;
(c) promptly notify the Facility Agent of any intended dry docking
of that Vessel (whether routine or otherwise);
(d) promptly notify the Facility Agent of any Environmental Claim
being made in connection with that Vessel or its operation;
57
(e) promptly notify the Facility Agent of any claim for breach of
the ISM Code being made in connection with that Vessel or its
operation;
(f) promptly notify the Facility Agent of any claim for breach of
the ISPS Code being made in connection with that Vessel or its
operation;
(g) give to the Facility Agent from time to time on request such
information, in sufficient copies (which may take the form of
electronic copies) for all the Lenders, as the Facility Agent
may reasonably require regarding that Vessel, her employment,
position and engagements;
(h) provide the Facility Agent with copies of the Vessel's
classification certificate and of all periodic damage or survey
reports on that Vessel which the Facility Agent may reasonably
request;
(i) promptly furnish the Facility Agent with full information of any
casualty or other accident or damage to that Vessel involving an
amount in excess of US1,000,000 (or equivalent);
(j) give to the Facility Agent and its duly authorised
representatives reasonable access to any of the Vessels for the
purpose of conducting on board inspections and/or surveys of the
Vessel and pay the reasonable expenses incurred by the Facility
Agent in connection with the inspections and/or surveys provided
that, unless a Default has occurred and is continuing, such
inspections and/or surveys shall not take place at the expense
of the Borrowers more than once a year and the Facility Agent
shall co-operate with the Borrowers in respect of the timing for
and the place where such surveys take place in order to minimise
disruption to the activities of that Vessel; and
(k) if the Facility Agent reasonably believes an Event of Default
may have occurred, furnish to the Facility Agent from time to
time upon reasonable request certified copies of the ship's log
in respect of that Vessel.
16.23 PROVISION OF FURTHER INFORMATION
The relevant Borrower shall, and shall procure that the Manager shall,
as soon as practicable following receipt of a request by the Facility
Agent, provide the Facility Agent, with sufficient copies for all the
Lenders, with any additional or further financial or other information
relating to its Vessel, the Obligatory Insurances or to any other matter
relevant to, or to any provision of, a Finance Document which the
Facility Agent may reasonably request.
16.24 MANAGEMENT
The relevant Borrower shall, and shall procure that the Manager shall,
ensure that at all times after the Applicable Time:
(a) its Vessel is managed by the Manager and, in the case of a
newbuild, its construction is supervised by the Manager; and
(b) save as provided in the acknowledgement from the Manager to the
assignment of the relevant Management Agreement effected by the
relevant General Assignment, no Manager may terminate or
materially vary the terms of its management or appoint an
alternative manager, without the prior written consent of the
Facility Agent (acting on the instructions of the Majority
Lenders).
58
16.25 PROCEEDS FROM SALE OR TOTAL LOSS OF A VESSEL
(a) The Borrowers shall procure that the proceeds from a sale or
Total Loss of a Vessel shall immediately upon receipt by any
Borrower be paid to the Facility Agent for application in
accordance with Clause ERROR! REFERENCE SOURCE NOT FOUND. and
6.3(c)(Mandatory prepayment - Sale or Total Loss of a Vessel).
(b) For and so long as any Borrower holds any such proceeds as
referred to in paragraph (a), it shall do so on trust for the
Facility Agent.
16.26 CHARTERS
(a) Save as set out in Clause 16.26(b) below, no Borrower will
charter-in any vessels or let its Vessel on demise, consecutive
voyage or voyage charter for any period without the consent of
the Facility Agent (acting on the instructions of the Majority
Lenders) such consent not to be unreasonably withheld, save with
or to any Subsidiary of the Borrower.
(b) A Borrower may charter-in any vessel on demise, time,
consecutive voyage or voyage charter having a duration (taking
into account any optional extensions) of 3-months maximum
provided always that there shall be no more than 3 vessels on
such short-term charters at any time.
(c) Each Borrower shall be entitled to let its Identified Vessels in
accordance with the terms of the initial Time Charters and any
other Acceptable Charter PROVIDED always that each Borrower
shall remain primarily liable to perform all the obligations
assumed by it under the Finance Documents.
(d) If a Vessel is no longer let on an Acceptable Charter such
Vessel shall cease to be an Additional Vessel.
(e) Each of the Acceptable Charterers is regarded by the Lenders as
an acceptable charterer of any of the Vessels, subject to the
right of the Facility Agent (acting on the reasonable
instructions of the Majority Lenders, acting reasonably) to
treat such Acceptable Charterer as not being acceptable in the
future. If the Facility Agent notifies the Representative
Borrower to that effect, such Acceptable Charterer shall be
removed from Schedule 9 and Schedule 9 as so amended shall be
the list of Acceptable Charterers for the purposes of this
Agreement. Subject to the prior approval of the Facility Agent
(acting on the reasonable instructions of the Majority Lenders
acting reasonably), a Borrower may at any time request that
other charterers are to be included in the list of Acceptable
Charterers. Following such approval, Schedule 9 shall be amended
so as to include such new charterer and Schedule 9 from then on
for purposes of this Agreement shall be construed as so amended.
16.27 TERMINATION OF TIME CHARTER
(a) At all times following the Applicable Time, the Representative
Borrower shall advise the Facility Agent of any of the following
events in respect of a Vessel:
(i) any breach of the terms of a Time Charter which could
lead to a termination of the Time Charter, by the
relevant Charterer of which the relevant Borrower
becomes aware;
(ii) the termination of a Time Charter by either the relevant
Borrower or the relevant Charterer; or
59
(iii) as soon as it becomes aware of such event, the
occurrence of an insolvency event of the nature referred
to in Clause 19.6 (Insolvency), 19.7 (Insolvency
proceedings), 19.9 (Creditors' process) or 19.10
(Cessation of business) in respect of a Charterer,
and upon the occurrence of any such event the Facility Agent
shall be (acting on the instructions of the Majority Lenders)
entitled to require that the relevant Borrower exercises all of
its rights under the relevant Time Charter including, where
applicable, the termination of the Time Charter in respect of
the relevant Vessel.
16.28 SCOPE OF OBLIGATORY INSURANCES
(a) Each Borrower will, in respect of its Vessel:
(i) at all times after the Applicable Time, keep that Vessel insured
in the Required Insurance Amount, in Dollars in the name of the
relevant Borrower or (if the Facility Agent so requires) in the
joint names of the relevant Borrower and the Facility Agent
without the Facility Agent being liable but having the right to
pay premiums, (if available in the market on reasonable
commercial terms) through brokers approved by the Facility Agent
(acting on the instructions of the Majority Lenders) against
fire and usual marine risks (including hull and machinery and
Excess Risks) with approved underwriters or insurance companies
approved by the Facility Agent (acting on the instructions of
the Majority Lenders) and by policies in form and content
approved by the Facility Agent (acting on the instructions of
the Majority Lenders);
(ii) at all times after the Applicable Time, keep that Vessel insured
in the Required Insurance Amount in the same manner as above
against war risks (including risks of mines and all risks,
whether or not regarded as war risks, London Blocking and
Trapping Addendum and Missing Vessel Clause or their equivalent,
excepted by the free of capture and seizure clauses in the
standard form of Lloyds marine policy) either:
(A) with underwriters or insurance companies approved by the
Facility Agent (acting on the instructions of the
Majority Lenders) and by policies in form and content
approved by the Facility Agent (acting on the
instructions of the Majority Lenders); or
(B) by entering the relevant Vessel in an approved war risks
association,
and for the avoidance of doubt, such war risks insurance will
include protection and indemnity liability up to at least the
Required Insurance Amount, excluding any liability in respect of
death, injury or damage to crew; and
(iii) at all times after the Applicable Time, keep that Vessel entered
in respect of her full value and tonnage in an approved
protection and indemnity association against all risks as are
normally covered by such protection and indemnity association
(including pollution risks and the proportion not recoverable in
case of collision under the running down clause inserted in the
ordinary Lloyds policies), such cover for pollution risks to be
for:
(A) a minimum amount of US$1,000,000,000 or such other
amount of cover against pollution risks as shall at any
time be comprised in the basic entry of each Vessel with
either a protection and indemnity association which is
an acceptable member of either the International Group
of protection and indemnity associations (or any
successor organisation designated by the Facility Agent
for this purpose) or the International Group (or such
successor organisation) itself; or
60
(B) if the International Group or any such successor ceases
to exist or ceases to provide or arrange any cover for
pollution risks (or any supplemental cover for pollution
risks over and above that afforded by the basic entry of
each Vessel with its protection and indemnity
association), such aggregate amount of cover against
pollution risks as shall be available on the open market
and by basic entry with a protection and indemnity
association for ships of the same type, size, age and
flag as each respective Vessel,
provided that, if any Vessel has ceased trading or is in lay up
and in either case has unloaded all cargo, the level of
pollution risks cover afforded by ordinary protection and
indemnity cover available through a member of the International
Group or such successor organisation or, as the case may be, on
the open market in such circumstances shall be sufficient for
such purposes.
(b) Notwithstanding the provisions of paragraph (a) above, compliance with
the Required Insurance Amount obligation shall be tested only (i) on
each renewal date for the Obligatory Insurances and (ii) on each
Utilisation Date, and the Borrowers shall be considered to have complied
with their obligation to insure in the Required Amount if that
obligation is satisfied in respect of each vessel on each date referred
to in (i) and (ii) above.
16.29 MORTGAGEE'S INTEREST INSURANCE
(a) In respect of each Vessel, from and including the Applicable Time, the
Facility Agent may maintain, at the cost of the Borrowers, in the
relevant Required Insurance Amount, and on such terms, through such
insurers and in such manner as the Facility Agent (acting on the
instructions of the Majority Lenders) may consider appropriate, a
mortgagee's interest marine insurance indemnifying the Finance Parties
for any Losses incurred directly or indirectly as a consequence of loss
of or damage to a Vessel or a liability of a Vessel or, the Borrowers,
which is:
(i) prima facie covered by an Obligatory Insurance; and
(ii) in respect of which there is a non-payment (or a reduced
payment) by the underwriters because of:
(A) any allegation concerning any act, omission, knowledge
or privity on the part of any Borrowers, the operator or
manager of any Vessel or of any officer, employee or
agent of an such person; or
(B) any other matter capable of being insured against under
a mortgagee's interest marine insurance policy,
and the Borrowers must indemnify the Facility Agent on demand in
respect of all costs expenses and premiums incurred in
connection with or with a view to effecting, maintaining or
renewing any such insurance or dealing with, or considering, any
matter arising out of any such insurance.
(b) The Borrowers may (but shall not be obliged to) provide to the Facility
Agent a competitive quote for comparable cover to that described in
paragraph (a) with underwriters acceptable to the Facility Agent (acting
on the instructions of the Majority Lenders). If the Borrowers do so,
such quote shall be accepted by the Facility Agent,
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16.30 OBLIGATORY INSURANCES
Without prejudice to its obligations under Clause 16.28 (Scope of
Obligatory Insurances), each Borrower will :
(a) not without the prior consent of the Facility Agent (acting on
the instructions of the Majority Lenders) alter any Obligatory
Insurance nor make, do, consent or agree to any act or omission
which would or might render any Obligatory Insurance invalid,
void, voidable or unenforceable or render any sum paid out under
any Obligatory Insurance repayable in whole or in part;
(b) not cause or permit its Vessel to be operated in any way
inconsistent with the provisions or warranties of, or implied
in, or outside the cover provided by, any Obligatory Insurance
or to be engaged in any voyage or to carry any cargo not
permitted by any Obligatory Insurances without first covering
the relevant Vessel in the relevant Required Insurance Amount
and her freights for an amount approved by the Facility Agent
(acting on the instructions of the Majority Lenders) in Dollars
or another approved currency with the Insurers;
(c) duly and punctually pay when due all premiums, calls,
contributions or other sums of money from time to time payable
in respect of any Obligatory Insurance;
(d) renew all Obligatory Insurances at least seven (7) days (or such
shorter period as the Facility Agent may agree) before the
relevant policies or contracts expire and procure that the
approved brokers and/or war risks and protection and indemnity
clubs and associations shall promptly confirm in writing to the
Facility Agent as and when each renewal is effected;
(e) forthwith upon the effecting of any Obligatory Insurance, give
written notice of the insurance to the Facility Agent stating
the full particulars (including the dates and amounts) of the
insurance, and on request produce the receipts for each sum paid
by it pursuant to paragraph (c) above;
(f) not settle, release, compromise or abandon any claim in respect
of any Total Loss unless the Facility Agent (acting on the
instructions of the Majority Lenders) is satisfied that such
release, settlement, compromise or abandonment will not
prejudice the interests of the Finance Parties under or in
relation to any Finance Document;
(g) arrange for the execution and delivery of such guarantees as may
from time to time be required by any protection and indemnity or
war risks club or association;
(h) procure that the interest of the Facility Agent is noted on all
policies of insurance;
(i) procure that a loss payee provision in the relevant form
scheduled to the General Assignment and reflecting the
provisions of Clause 16.31 (Application of Insurance Proceeds)
is endorsed on all policies of insurance;
(j) obtain from the relevant insurance brokers and P&I Club letters
of undertaking in the forms scheduled to the relevant General
Assignment or otherwise in market standard form; and
(k) in the event that a Borrower receives payment of any moneys
under the relevant General Assignment, save as provided in the
loss payable clauses scheduled to the relevant General
Assignment, forthwith pay over the same to the Facility Agent
and, until paid over, such moneys shall be held in trust for the
Facility Agent by that Borrower.
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16.31 APPLICATION OF INSURANCE PROCEEDS
(a) All sums receivable in respect of the Obligatory Insurances
after the occurrence of an Event of Default and whilst the same
is continuing, shall be paid to the Facility Agent and the
Facility Agent shall apply them in accordance with Clause 13.7
(Payments).
(b) Subject to paragraph (a) above:
(i) each sum receivable in respect of a major casualty
(being any casualty in respect of which the claim or the
aggregate of the claims exceeds US$2,000,000 (or its
equivalent)), other than in respect of protection and
indemnity risk insurances, shall be paid to the Facility
Agent; and
(ii) the insurance moneys received by the Facility Agent in
respect of any such major casualty shall be paid:
(A) to the person to whom the relevant liability
shall have been incurred; or
(B) upon the relevant Borrower furnishing evidence
satisfactory to the Facility Agent that all loss
and damage resulting from the casualty has been
properly made good and repaired, to the relevant
Borrower or, at the option of the Facility
Agent, to the person by whom any repairs have
been or are to be effected.
(iii) The receipt by any such person referred to in paragraph
(A) and (B) of paragraph (ii) above shall be a full and
sufficient discharge of the same to the Facility Agent.
(c) Subject to paragraph (a) above, each sum receivable in respect
of the Obligatory Insurances (insofar as the same are hull and
machinery or war risks insurances) which does not exceed
US$2,000,000 or its equivalent shall be paid in full to the
relevant Borrower or to its order and shall be applied by it for
the purpose of making good the loss and fully repairing all
damage in respect of which the receivable shall have been
collected.
(d) Subject to paragraph (a) above, each sum receivable in respect
of protection and indemnity risk Obligatory Insurances shall be
paid direct to the person to whom the liability, to which that
sum relates, was incurred, or to the relevant Borrower in
reimbursement to it of moneys expended in satisfaction of such
liability.
(e) Notwithstanding any other provision in this Clause 16.31, all
sums receivable in respect of Obligatory Insurances relating to
a Total Loss shall be applied in accordance with Clause 6.
16.32 POWER OF FACILITY AGENT TO INSURE
If any Borrower fails to effect and keep in force Obligatory Insurances
or fails to procure that Obligatory Insurances are effected and kept in
force in accordance with this Agreement, it shall be permissible, but
not obligatory, for the Facility Agent to effect and keep in force
insurance or insurances in the amounts required under this Agreement and
entries in a protection and indemnity association or club and, if it
deems necessary or expedient, to insure the war risks upon any Vessel,
and the Borrowers will reimburse the Facility Agent for the costs of so
doing.
16.33 ISM CODE
The relevant Borrower shall, and shall procure that the Manager shall:
63
(a) at all times after the Applicable Time be responsible for
compliance by itself and by its Vessel with the ISM Code;
(b) at all times after the Applicable Time ensure that:
(i) its Vessel has a valid Safety Management Certificate (as
defined in the ISM Code);
(ii) its Vessel is subject to a safety management system (as
defined in the ISM Code) which complies with the ISM
Code; and
(iii) the Manager holds a valid Document of Compliance (as
defined in the ISM Code), a copy of which is held on
board the relevant Vessel ,
and shall deliver to the Facility Agent, on or before the
Applicable Time, a copy of a valid Safety Management Certificate
in respect of the relevant Vessel, and a valid Document of
Compliance in each case duly certified by an officer of the
relevant Borrower;
(c) promptly notify the Facility Agent of any actual or upon
becoming, aware of the same, threatened withdrawal of an
applicable Safety Management Certificate or Document of
Compliance;
(d) promptly upon becoming, aware of the same notify the Facility
Agent of the occurrence of any accident or major non-conformity
(as defined in the ISM Code) requiring action under the ISM
Code.
16.34 ISPS CODE
The relevant Borrower shall, and shall procure that the Manager shall,
at all times after the Applicable Time:
(a) comply and be responsible for compliance by itself and by its
Vessel with the ISPS Code;
(b) ensure that:
(i) its Vessel has a valid International Ship Security
Certificate;
(ii) its Vessel's security system and its associated security
equipment comply with section 19.1 of Part A of the ISPS
Code;
(iii) its Vessel's security system and associated security
equipment comply in all respects with the applicable
requirements of Chapter XI-2 of SOLAS and Part A of the
ISPS Code; and
(iv) an approved ship security plan is in place.
16.35 NO AMENDMENT TO RELATED CONTRACTS
No Borrower shall amend or agree to any material amendment, to the
Related Contracts without the prior written consent of the Facility
Agent (acting on the instructions of the Majority Lenders).
16.36 HEDGING STRATEGY
From the date of this Agreement until the Final Maturity Date, the
Borrowers must maintain in place hedging arrangements in respect of the
interest accruing on at least 50% of the outstanding Loans from time to
time under this Agreement. The Representative Borrower shall give each
of ▇▇▇▇▇▇ ▇▇▇▇
▇▇
(▇▇▇▇▇▇▇▇▇) ▇.▇., ▇▇▇▇▇▇▇▇ International plc and HSH Nordbank AG the
right to match a quote from other financial institutions in respect of
any such hedging arrangements.
16.37 DRY DOCKING
The Representative Borrower (or the relevant Borrower) shall have or
shall have provided to the Manager on the date of the scheduled dry
docking of a Vessel, sufficient available liquid funds to meet all of
its obligations under the Management Agreement (or otherwise) in
relation to the cost of such scheduled dry docking in relation to that
Vessel.
17. FINANCIAL COVENANTS
17.1 DEFINITIONS
In this Clause:
CASH AND CASH EQUIVALENTS means, as at any date of determination:
(a) cash in hand or on deposit in the Accounts;
(b) any investment in marketable obligations issued or guaranteed by
the government of the United States of America, Canada or the
United Kingdom or by an instrumentality or agency of the
government of the United States of America, Canada or the United
Kingdom, maturing within one (1) year after the relevant date of
calculation;
(c) time deposits and certificates of deposit of any commercial bank
having, or which is the principal banking subsidiary of a bank
holding company having, a credit rating of either A by S&P or
Fitch or A2 by ▇▇▇▇▇'▇ which time deposits and certificates of
deposit mature within one (1) year after the relevant date of
calculation;
(d) repurchase obligations with a term of not more than ninety (90)
days for underlying securities of the type referred to in
paragraph (b) above entered into with any bank meeting the
qualifications specified in paragraph (c);
(e) open market commercial paper:
(i) for which a recognised trading market exists;
(ii) issued in the United States of America, Canada or the
United Kingdom;
(iii) which matures within one (1) year after the relevant
date of calculation; and
(iv) which has a credit rating of either A-1 by S&P or Fitch
or P-1 by ▇▇▇▇▇'▇, or, if no rating is available in
respect of the commercial paper, the issuer of which
has, in respect of its long-term debt obligations, an
equivalent rating;
(f) any other instrument, security or investment approved by the
Majority Lenders,
in each case, to which each of the Borrowers is beneficially entitled at
that time and, which is unencumbered (other than by any of the Security
Documents).
CASH BALANCE means the sum of Cash and Cash Equivalents.
DEBT SERVICE means the sum of:
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(a) Net Interest Expense, and
(b) scheduled repayments of bank borrowings and principal repayments
of finance leases.,
less any amounts accruing for payment to the Borrowers for that period
under the Swap Agreements
EBITDA means the sum of:
(a) revenue; and
(b) less operating expenses excluding gains or losses on disposal of
property and equipment;
For the avoidance of doubt, depreciation and amortization, impairment of
assets, amortization of government subsidies, income from associates and
jointly controlled entities, and any other non operating income or
expenses shall not be included in the calculation of EBITDA.
FINANCIAL NET DEBT means the sum of:
(a) all interest-bearing liabilities, being the sum of non-current
financial debt and current financial debt; for the avoidance of
doubt, obligations under finance leases shall be included and
derivative financial instruments shall not be included in the
calculation of interest-bearing liabilities,
(b) less Cash Balance.
INTEREST EXPENSE means all cash interest incurred by the Borrowers
during a Measurement Period.
NET INTEREST EXPENSE means the sum of:
(a) Interest Expense on Total Financial Debt,
(b) less interest income from Cash and Cash Equivalents;
NET WORTH means at any time the amount paid up or credited as paid up on
the issued share capital of the Representative Borrower based on the
then latest published audited balance sheet of the Representative
Borrower (the latest balance sheet) but adjusted by:
(a) adding any amount standing to the credit of the profit and loss
account of the Representative Borrower for the period ending on
the date of the latest balance sheet;
(b) deducting any dividend or other distribution declared,
recommended or made by the Representative Borrower;
(c) deducting any amount standing to the debit of the profit and
loss account of the relevant Borrower for the period ending on
the date of the latest balance sheet;
(d) deducting any amount attributable to any intangible asset (other
than goodwill);
(e) reflecting any variation in the amount of the issued share
capital of the Representative Borrower and the capital and
revenue reserves of the Representative Borrower after the date
of the latest balance sheet; and
(f) excluding any amount attributable to minority interests.
SHAREHOLDERS' EQUITY means the sum of:
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(a) share capital,
(b) reserves and retained earnings, and
(c) profit for the period.
For the avoidance of doubt, minority interests and government grants
shall not be included in the calculation of Shareholders' Equity.
TOTAL CAPITALIZATION means the sum of:
(a) Total Financial Debt and
(b) Shareholders' Equity.
TOTAL FINANCIAL DEBT means the sum of:
(a) all interest-bearing liabilities, being the sum of non-current
financial debt and current financial debt; for the avoidance of
doubt, obligations under finance leases shall be included and
derivative financial instruments shall not be included in the
calculation of interest-bearing liabilities, and
(b) the total amount of financial commitments in relation to
operating leases which are not recognized in the balance sheet.
17.2 INTERPRETATION
(a) Except as provided to the contrary in this Agreement, an
accounting term used in this Clause is to be construed in
accordance with U.S. GAAP.
(b) Any amount in a currency other than Dollars is to be taken into
account at its Dollar equivalent calculated on the basis of:
(i) the Facility Agent's spot rate of exchange for the
purchase of the relevant currency in the London foreign
exchange market with Dollars at or about 11.00 a.m. on
the day the relevant amount falls to be calculated; or
(ii) if the amount is to be calculated on the last day of a
financial period of the Borrower, the relevant rates of
exchange used by the Borrower in, or in connection with,
its financial statements for that period.
(c) No item must be credited or deducted more than once in any
calculation under this Clause.
17.3 CASH BALANCE
The Representative Borrower must ensure that the Cash Balance always
exceeds the lower of (i) fifteen million Dollars (US$15,000,000) or (ii)
six (6) months' Net Interest Expense of the Borrowers.
17.4 MINIMUM NET WORTH
The Representative Borrower must ensure that its Net Worth is at least
two hundred million Dollars (US$200,000,000) or such other sum to be
agreed by the Facility Agent acting on the instructions of the Majority
Lenders.
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17.5 FINANCIAL NET DEBT RATIO
The Representative Borrower must ensure that the ratio of its Financial
Net Debt to its Total Capitalisation shall not exceed 75%.
17.6 EBITDA TO DEBT SERVICE RATIO
The Representative Borrower must ensure that the ratio of EBITDA to its
Debt Service is always greater than or equal to 1.10 to 1 on a trailing
four quarterly basis.
17.7 TESTING OF FINANCIAL COVENANTS
Each of the financial covenants set out in Clauses 17.4 (Minimum Net
Worth) to 17.6 (EBITDA to Debt Service Ratio) (inclusive) shall be
tested by reference to each rolling twelve (12) month Measurement Period
as evidenced by a Compliance Certificate provided by the Representative
Borrower in respect of the financial covenants in accordance with Clause
15.3 (Compliance Certificate).
18. VALUATION
18.1 VALUATION
For the purposes of this Clause 18:
(a) the Market Value of any Vessel shall be the mean average of two
valuations each certified in Dollars and carried out by two of
the Approved Valuers, reporting to the Facility Agent by way of
written reports in form and substance satisfactory to the
Facility Agent (acting reasonably) on the basis of a sale for
prompt delivery of the Vessel for cash (free of Security
Interests), on a without charter basis and at arm's-length on
normal commercial terms as between willing seller and buyer
without a physical survey.
(b) In the case of (a) above, there shall be deducted from any value
or valuation the amount which is owing or might become owing and
which is secured on the asset concerned by any prior or equal
ranking Security Interest (other than in favour of the Facility
Agent to secure the Secured Liabilities) excluding Permitted
Liens.
18.2 DELIVERY OF VALUATIONS
(a) In respect of each Delivered Vessel, the Representative Borrower
will procure a valuation on the basis described in Clause
18.1(a) (Valuation) not more than thirty (30) days prior to the
Closing Date.
(b) In respect of each Subsequent Vessel, the Representative
Borrower will procure a valuation on the basis described in
Clause 18.1(a) (Valuation) not more than thirty (30) days prior
to the Delivery Date of that Subsequent Vessel.
(c) In respect of any Additional Vessel, the Representative Borrower
will procure a valuation not more than thirty (30) days and not
less than ten (10) days prior to the earlier of (i) the date of
a Request in relation to a drawing under a Loan in respect of
such Additional Vessel, (ii) the Delivery Date of such
Additional Vessel or (iii) the date the vessel is to be
designated an Additional Vessel in accordance with Clause
3.1(h).
(d) In addition to the Valuations pursuant to Clauses 18.2(a), (b)
and (c), the Representative Borrower will procure a valuation of
each Vessel on the basis described in Clause 18.1(a)
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(Valuation) within each consecutive six (6) month period (the
first such period commencing on the Closing Date) at the time
agreed between the Representative Borrower and the Facility
Agent, prepared in accordance with the relevant provisions of
Clause 18.1 (Valuation).
(e) The Representative Borrower will procure in favour of the
Facility Agent and the Approved Valuers, all such information,
as they may reasonably (having regard to the use and operation
of the Vessel) require in order to effect such valuations.
(f) If an Event of Default has occurred and is continuing, the
Representative Borrower shall if no Valuations have been made
within the three (3) month period immediately preceding the
occurrence of the Event of Default, procure such valuations of
any Vessel from such of the Approved Valuers as the Facility
Agent shall require. In addition the Facility Agent may at any
time following an Event of Default, procure its own valuations,
at its own expense, for the purposes of calculating the
financial covenants under this Agreement, such valuations to be
obtained on a basis which is consistent with the provisions of
Clause 18.1.
(g) All valuations shall be at the expense of the Borrowers.
(h) Any valuation under this Clause 18 shall be binding and
conclusive (save for manifest error).
19. DEFAULT
19.1 EVENTS OF DEFAULT
Each of the events set out in this Clause 19 is an Event of Default.
19.2 NON-PAYMENT
A Borrower does not pay on the due date any amount payable by it under
the Finance Documents in the manner required under the Finance
Documents, unless the non-payment is remedied within four (4) Business
Days of the due date.
19.3 BREACH OF OTHER OBLIGATIONS
(a) Each Borrower does not comply with any term of the Finance
Documents, unless the non-compliance:
(i) is capable of remedy; and
(ii) is remedied within seven (7) Business Days of the
Facility Agent giving notice to the Representative
Borrower.
The Borrowers acknowledge that for the purposes of paragraph (i)
above, non-compliance with the following shall not be capable of
remedy:
(A) Clause 16.12(a) and 16.12(b) (Security);
(B) Clause 16.14(a)(i) (Registration of the
Vessels);
(C) Clause 16.28 (Scope of Obligatory Insurances);
and
(D) Clause 17 (Financial Covenants).
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19.4 MISREPRESENTATION
A representation made or repeated by a Borrower (or by any other Party
other than a Finance Party or the Account Bank) in any Finance Document
or in any document delivered by or on behalf of a Borrower under any
Finance Document is incorrect in any material respect when made or
deemed to be repeated.
19.5 CROSS-DEFAULT
Any of the following occurs in respect of any Borrower:
(a) any of its Financial Indebtedness is not paid when due (after
the expiry of any originally applicable grace period);
(b) any of its Financial Indebtedness:
(i) becomes prematurely due and payable; or
(ii) is placed on demand; or
(iii) is capable of being declared by a creditor to be
prematurely due and payable or being placed on demand,
in each case, as a result of an event of default (howsoever
described) and after the expiry of any applicable grace period;
or
(c) any commitment for its Financial Indebtedness is cancelled or
suspended as a result of an event of default (howsoever
described),
(d) any event of default as defined in any of the Swap Agreements,
occurs and is continuing following the expiry of any applicable
grace periods,
unless the aggregate amount of Financial Indebtedness falling within
paragraphs (a) to (c) above is less than US$15,000,000 or its equivalent
(in the case of the Representative Borrower) or US$10,000,000 or its
equivalent (in the case of any other Borrower).
19.6 INSOLVENCY
Any of the following occurs in respect of a Borrower:
(a) it is, or is deemed for the purposes of any Applicable Law to
be, unable to pay its debts as they fall due or insolvent;
(b) it admits its inability to pay its debts as they fall due;
(c) it suspends making payments on any of its debts or announces an
intention to do so;
(d) by reason of actual or anticipated financial difficulties, it
begins negotiations with any creditor for the rescheduling of
any of its indebtedness; or
(e) a moratorium is declared in respect of any of its indebtedness.
If a moratorium occurs in respect of a Borrower, the ending of the
moratorium will not remedy any Event of Default caused by the
moratorium.
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19.7 INSOLVENCY PROCEEDINGS
(a) Except as provided in paragraph (b) below, any of the following
occurs in respect of a Borrower:
(i) any step is taken with a view to a moratorium, a
composition, assignment or similar arrangement with any
of its creditors;
(ii) a meeting of its shareholders, directors or other
officers is convened for the purpose of considering any
resolution to petition for or to file documents with a
court for its winding-up, administration or dissolution
and any such resolution is passed;
(iii) any person presents a petition, or files documents with
a court for its winding-up, administration or
dissolution;
(iv) an order for its winding-up, administration or
dissolution is made;
(v) any liquidator, trustee in bankruptcy, judicial
custodian, compulsory manager, receiver, administrative
receiver, administrator or similar officer is appointed
in respect of it or any of its material assets;
(vi) its directors, shareholders or other officers request
the appointment of, or give notice of their intention to
appoint a liquidator, trustee in bankruptcy, judicial
custodian, compulsory manager, receiver, administrative
receiver, administrator or similar officer; or
(vii) any other analogous step or procedure is taken in any
jurisdiction.
(b) Paragraph (a) above does not apply to a frivolous or vexatious
petition for winding-up presented by a creditor which is being
contested in good faith and with due diligence and is discharged
or struck out within fourteen (14) days or other action is taken
with the prior consent of the Facility Agent.
19.8 CHANGE OF CONTROL
A Change of Control occurs in relation to the Representative Borrower
without the prior written consent of the Facility Agent (acting on the
instructions of the Majority Lenders).
19.9 CREDITORS' PROCESS
Any attachment, sequestration, distress, execution or analogous event
affects any asset(s) of a Borrower, having an aggregate value of ten
million Dollars (US$10,000,000) or its equivalent and is not discharged
within fourteen (14) days.
19.10 CESSATION OF BUSINESS
A Borrower ceases, or threatens to cease, to carry on business except as
a result of any disposal not prohibited under this Agreement.
19.11 FAILURE TO PAY FINAL JUDGMENT
Any Borrower fails to comply with or pay any sum due from it under any
final judgment or any final order made or given by any court of
competent jurisdiction within the time given for payment.
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19.12 EFFECTIVENESS OF FINANCE DOCUMENTS
(a) It is or becomes unlawful for a Borrower or any other Party
(other than a Finance Party or the Account Bank) to perform any
of its material obligations under the Finance Documents.
(b) Any Finance Document is not effective or is alleged by a
Borrower to be ineffective for any reason.
(c) Any material provision of a Finance Document is not effective or
is alleged by any Party (other than a Finance Party, a Borrower
or the Account Bank) to be ineffective for any reason.
(d) A Borrower repudiates any material provision of a Finance
Document or evidences an intention to repudiate any material
provision of a Finance Document.
(e) Any Party (other than a Finance Party or the Account Bank)
repudiates any material provision of a Finance Document or
evidences an intention to repudiate any material provision of a
Finance Document.
19.13 INVALIDITY OF SECURITY DOCUMENTS
Any of the Security Documents ceases to be valid in any material respect
or any of those Security Documents creating a Security Interest in
favour of the Facility Agent ceases to provide a perfected first
priority security interest in favour of the Facility Agent.
19.14 CHARTER DEFAULT
(a) Any default by the CMA CGM Charterer which would entitle the
relevant Borrower to terminate the relevant Time Charter , which
has occurred and is continuing in respect of three or more of
the Time Charters associated with the Identified Vessels.
(b) Any default by an Approved Charterer or by CMA CGM under any
Approved Charter or any Charter Guarantee which would entitle
the relevant Borrower to terminate the relevant Time Charter,
which has occurred and is continuing in respect of (i) at least
three (3) of the Time Charters and/ or Charter Guarantees in
relation to Identified Vessels or (ii) at least half by number
of the Time Charters and/ or Charter Guarantees associated with
any one Approved Charterer (provided that, in the case of (ii),
the relevant Approved Charterer is the charterer of at least 25%
by number of all of the Vessels).
19.15 ACCELERATION
If an Event of Default is outstanding, the Facility Agent may, or shall
if the Majority Lenders so instruct it, by notice to the Borrowers:
(a) cancel the undrawn, uncancelled amount of the Maximum Available
Facility Amount; and/or
(b) declare that all or part of any amounts outstanding under the
Finance Documents are:
(i) immediately due and payable; and/or
(ii) payable on demand by the Facility Agent.
Any notice given under this Subclause will take effect in accordance
with its terms.
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20. SECURITY
20.1 FACILITY AGENT AS TRUSTEE
Unless expressly provided to the contrary herein or in any Finance
Document and except as otherwise required by Applicable Law, the
Facility Agent holds any security created by a Security Document on
trust for the Finance Parties.
20.2 RESPONSIBILITY
The Facility Agent is not liable or responsible to any other Finance
Party for:
(a) any failure in perfecting or protecting the security created by
any Security Document; or
(b) any other action taken or not taken by it in connection with any
Security Document,
unless directly caused by its gross negligence or wilful misconduct.
20.3 TITLE
The Facility Agent may accept, without enquiry, the title (if any) a
Borrower may have to any asset over which security is intended to be
created by any Security Document.
20.4 POSSESSION OF DOCUMENTS
The Facility Agent is not obliged to hold in its own possession any
Security Document, title deed or other document in connection with any
asset over which security is intended to be created by a Security
Document.
20.5 INVESTMENTS
Except as otherwise provided in any Security Document, all moneys
received by the Facility Agent under a Security Document will, until
utilised, be invested in the name of, or under the control of, the
Facility Agent in any investments selected by the Facility Agent (acting
on the instructions of the Majority Lenders). Additionally, those moneys
may be placed on deposit in the name of, or under the control of, the
Facility Agent at any bank or institution (including itself) and upon
such terms as it may think fit. Any interest or profit earned by the
Facility Agent in connection with such investments shall be that of the
Borrowers and added to the Security Assets.
20.6 APPROVAL
Each Finance Party confirms its approval of each Security Document.
20.7 RELEASE OF SECURITY
(a) If a disposal of any asset subject to security created by a
Security Document is made to a third party in the following
circumstances:
(i) the Majority Lenders agree to the disposal;
(ii) the disposal is allowed by the terms of the Finance
Documents and will not result or could not reasonably be
expected to result in any breach of any term of any
Finance Document;
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(iii) the disposal is being made at the request of the
Facility Agent in circumstances where any security
created by the Security Documents has become
enforceable; or
(iv) the disposal is being effected by enforcement of a
Security Document,
and, in any such case, the Facility Agent is satisfied that the
Leverage Ratio will not be greater than 75% following any such
disposal, the asset being disposed of will be released from any
security over it created by a Security Document. However, the
proceeds of any disposal (or an amount corresponding to them)
must be applied in accordance with the requirements of the
Finance Documents (if any).
(b) If, on any date of determination of the Leverage Ratio (which
occurs after the Borrowers have provided the Facility Agent with
additional security pursuant to Clause 16.15(b) (Partial
prepayments or additional security), the Leverage Ratio is equal
to or less than 75%, the Borrowers may, within ten (10) Business
Days of such valuation, request that the Facility Agent releases
any additional security (which does not constitute a Vessel
which has been taken into account in the calculation of the
Leverage Ratio) and provided that:
(i) the Facility Agent is satisfied that following the
release of such additional security the Leverage Ratio
(disregarding the additional security to be released)
would be equal to or less than 75%; and
(ii) no Default has occurred and is continuing,
such additional security shall be released.
(c) Following the Final Maturity Date and provided that all the
Loans have been irrevocably and unconditionally repaid in full
to the satisfaction of the Finance Parties, the Security
Interests under the Security Documents will be released.
(d) If the Facility Agent is satisfied that a release is allowed
under this Subclause 21.7, the Facility Agent must execute (at
the request and expense of the Borrowers) any document which is
reasonably required to achieve that release. Each other Finance
Party irrevocably authorises the Facility Agent to execute any
such document.
20.8 CO-SECURITY AGENT
(a) The Facility Agent may appoint a separate security agent or a
co-security agent in any jurisdiction outside the United States
of America:
(i) if the Facility Agent considers that without the
appointment the interests of the Lenders under the
Finance Documents might be materially and adversely
affected;
(ii) for the purpose of complying with any law, regulation or
other condition in any jurisdiction; or
(iii) for the purpose of obtaining or enforcing a judgment or
enforcing any Finance Document in any jurisdiction.
(b) Any appointment under this Subclause will only be effective if
the security agent or co-security agent confirms to the Facility
Agent and the Representative Borrower that it is bound by the
terms of this Agreement as if it were the Facility Agent by
executing and delivering to the Facility Agent an accession
agreement in a form to be agreed between the Representative
Borrower and the Facility Agent.
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(c) The Facility Agent may remove any security agent or co-security
agent appointed by it and may appoint a new security agent or
co-security agent in its place.
(d) The Borrowers must pay to the Facility Agent any reasonable
remuneration agreed by the Representative Borrower paid by the
Facility Agent to any security agent or co-security agent
appointed by it, together with any related costs and expenses
properly incurred by the security agent or co-security agent.
20.9 PARALLEL DEBT
(a) For the purposes of the Dutch Security the Borrowers hereby
irrevocably and unconditionally undertake to pay to the Facility
Agent amounts equal to any amounts owing by the Borrowers
(whether owed as borrower of a facility or as joint and several
obligor) to the relevant Finance Parties under the Finance
Documents as and when the same fall due for payment thereunder,
so that the Facility Agent shall be the obligee of such covenant
to pay and shall be entitled to claim performance thereof in its
own name and not as agent acting on behalf of the relevant
Finance Parties. Each Borrower and the Facility Agent
acknowledge that for this purpose such obligations of each
Borrower are several and are separate and independent from, and
without prejudice to, the identical obligations which each
Borrower has to the Finance Parties under the relevant Finance
Documents, provided that this shall not, at the same time,
result in any Borrower incurring an aggregate obligation to any
such Finance Parties under the Finance Documents. To this end
and without prejudice to the foregoing, it is agreed that (a)
the amounts due and payable by each Borrower under this Clause
20.9 (the PARALLEL DEBT) shall be decreased to the extent that
any Borrower paid any amounts to the Finance Parties or any of
them in respect of the Secured Liabilities and vice versa and
(b) the Parallel Debt shall not exceed the aggregate of the
corresponding obligations which any Borrower has to the Finance
Parties under the Finance Documents.
(b) Nothing in this Clause shall in any way negate, affect or
increase the obligations of the Borrowers to any Finance Parties
under the Finance Documents in respect of the Secured
Liabilities. For the purpose of this Clause, the Facility Agent
acts in its own name and on behalf of itself and not as agent or
representative of any other party hereto and any security
granted to the Facility Agent to secure the Parallel Debt is
granted to the Facility Agent in its capacity as creditor of the
Parallel Debt and solely for the purpose referred to above.
20.10 DUTCH SECURITY
(a) The Facility Agent shall obtain any Security Interest provided
under or pursuant to a Security Document governed by Dutch law
(the DUTCH SECURITY) in its own name.
(b) The Facility Agent shall have full and unrestricted entitlement
to and authority in respect of the Dutch Security, provided that
it shall be under an obligation to exercise such rights (and
perform such obligations) in accordance with the contractual
undertakings set out in any Finance Document.
21. THE ADMINISTRATIVE PARTIES
21.1 APPOINTMENT AND DUTIES OF THE FACILITY AGENT
(a) Save as provided in Clause 20.10 (Dutch Security), each Finance
Party (other than the Facility Agent) irrevocably appoints the
Facility Agent to act as its agent under the Finance Documents.
(b) Each Finance Party irrevocably authorises the Facility Agent on
its behalf to:
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(i) perform the duties and to exercise the rights, powers
and discretions that are specifically given to it under
the Finance Documents, together with any other
incidental rights, powers and discretions; and
(ii) execute each Finance Document expressed to be executed
by the Facility Agent on that Party's behalf.
(c) The Facility Agent has only those duties which are expressly
specified in the Finance Documents. Those duties are solely of a
mechanical and administrative nature.
21.2 ROLE OF THE ARRANGERS
Except as specifically provided in the Finance Documents, the Arrangers
in their capacity as Arrangers have no obligations of any kind to any
other Party in connection with any Finance Document.
21.3 NO FIDUCIARY DUTIES
Except as specifically provided in a Finance Document, nothing in the
Finance Documents makes an Administrative Party a trustee or fiduciary
for any other Party or any other person. No Administrative Party needs
to hold in trust any moneys paid to it for a Party or be liable to
account for interest on those moneys.
21.4 INDIVIDUAL POSITION OF AN ADMINISTRATIVE PARTY
(a) If it is also a Lender, each Administrative Party has the same
rights and powers under the Finance Documents as any other
Lender and may exercise those rights and powers as though it
were not an Administrative Party.
(b) Each Administrative Party may:
(i) carry on any business with the Borrower or its related
entities (including acting as an agent or a trustee for
any other financing); and
(ii) retain any profits or remuneration it receives under the
Finance Documents or in relation to any other business
it carries on with the Borrower or its related entities.
21.5 RELIANCE
The Facility Agent may:
(a) rely on any notice or document believed by it to be genuine and
correct and to have been signed by, or with the authority of,
the proper person;
(b) rely on any statement made by any person regarding any matters
which may reasonably be assumed to be within his knowledge or
within his power to verify;
(c) engage, pay for and rely on professional advisors selected by it
including those representing a Party other than the Facility
Agent; and
(d) act under the Finance Documents through its personnel and
agents.
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21.6 MAJORITY LENDERS' INSTRUCTIONS
(a) The Facility Agent is fully protected if it acts on the
instructions of the Majority Lenders in the exercise of any
right, power or discretion or any matter not expressly provided
for in the Finance Documents. Any such instructions given by the
Majority Lenders will be binding on all the Lenders. In the
absence of instructions, then unless the Finance Documents
expressly provide that the Facility Agent acts on the
instructions of the Majority Lenders in exercising the relevant
right, power or discretion, the Facility Agent may act as it
considers to be in the best interests of all the Lenders.
(b) Each Lender acknowledges and confirms that it shall act in a
reasonable manner when reaching any decision as to the exercise
or non-exercise of any right, power or discretion by the
Facility Agent.
(c) The Facility Agent may assume that unless it has received notice
to the contrary, any right, power, authority or discretion
vested in any Party or the Majority Lenders has not been
exercised.
(d) The Facility Agent is not authorised to act on behalf of a
Lender (without first obtaining that Lender's consent) in any
legal or arbitration proceedings in connection with any Finance
Document.
(e) The Facility Agent may require the receipt of security
satisfactory to it, whether by way of payment in advance or
otherwise, against any liability or loss which it may incur in
complying with the instructions of the Majority Lenders.
21.7 RESPONSIBILITY
(a) No Administrative Party is responsible to any other Finance
Party for the adequacy, accuracy or completeness of:
(i) any Finance Document or any other document; or
(ii) any statement or information (whether written or oral)
made in or supplied in connection with any Finance
Document.
(b) No Administrative Party is responsible for the legality,
validity, effectiveness, adequacy, completeness or
enforceability of any Finance Document or any other document.
(c) Without affecting the responsibility of each Borrower for
information supplied by it or on its behalf in connection with
any Finance Document, each Lender confirms that it:
(i) has made, and will continue to make, its own independent
appraisal of all risks arising under or in connection
with the Finance Documents (including the financial
condition and affairs of the Borrower and its related
entities and the nature and extent of any recourse
against any Party or its assets);
(ii) has not relied exclusively on any information provided
to it by any Administrative Party in connection with any
Finance Document; and
(iii) approves the form and content of each Finance Document.
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(d) The Facility` Agent is not liable to any Finance Party for any
failure in perfecting or protecting any Security Interest unless
directly caused by its gross negligence or wilful misconduct.
This includes any failure to:
(i) make any necessary registration, recording or filing of
or otherwise protect the relevant Security Interest
under any law in any jurisdiction;
(ii) give notice to any person of the execution of any
Security Document; or
(iii) obtain any authorisation for the creation of any
Security.
21.8 EXCLUSION OF LIABILITY
(a) The Facility Agent is not liable or responsible to any other
Finance Party for any action taken or not taken by it in
connection with any Finance Document, unless directly caused by
its gross negligence or wilful misconduct.
(b) No Party (other than the Facility Agent) may take any
proceedings against any officer, employee or agent of the
Facility Agent in respect of any claim it might have against the
Facility Agent or in respect of any act or omission of any kind
by that officer, employee or agent in connection with any
Finance Document. Any officer, employee or agent of the Facility
Agent may rely on this Subclause and enforce its terms under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
21.9 DEFAULT
(a) The Facility Agent is not obliged to monitor or enquire whether
a Default has occurred. The Facility Agent is not deemed to have
knowledge of the occurrence of a Default.
(b) If the Facility Agent:
(i) receives notice from a Party referring to this
Agreement, describing a Default and stating that the
event is a Default; or
(ii) is aware of the non-payment of any principal or interest
or any fee payable to a Lender under this Agreement,
it must promptly notify the Lenders.
21.10 INFORMATION
(a) The Facility Agent must promptly forward to the person concerned
the original or a copy of any document which is delivered to the
Facility Agent by a Party for that person.
(b) Except where a Finance Document specifically provides otherwise,
the Facility Agent is not obliged to review or check the
adequacy, accuracy or completeness of any document it forwards
to another Party.
(c) Except as provided above, the Facility Agent has no duty:
(i) either initially or on a continuing basis to provide any
Lender with any credit or other information concerning
the risks arising under or in connection with the
Finance Documents (including any information relating to
the financial condition or affairs of the Representative
Borrower or its related entities or the nature or extent
of
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recourse against any Party or its assets) whether coming
into its possession before, on or after the date of this
Agreement; or
(ii) unless specifically requested to do so by a Lender in
accordance with a Finance Document, to request any
certificate or other document from the Representative
Borrower.
(d) In acting as the Facility Agent, the agency division of the
Facility Agent is treated as a separate entity from its other
divisions and departments. Any information acquired by the
Facility Agent which, in its opinion, is acquired by it
otherwise than in its capacity as the Facility Agent may be
treated as confidential by the Facility Agent and will not be
treated as information possessed by the Facility Agent in its
capacity as such.
(e) The Representative Borrower irrevocably authorises the Facility
Agent to disclose to the other Finance Parties any information
which, is received by it in its capacity as the Facility Agent.
21.11 INDEMNITIES
(a) Without limiting the liability of each Borrower under the
Finance Documents, each Lender must indemnify the Facility Agent
for that Lender's Pro Rata Share of any loss or liability
incurred by the Facility Agent in acting as the Facility Agent,
except to the extent that the loss or liability is caused by the
Facility Agent's gross negligence or wilful misconduct.
(b) The Facility Agent may deduct from any amount received by it for
a Lender any amount due to the Facility Agent from that Lender
under a Finance Document but unpaid.
21.12 COMPLIANCE
Each Administrative Party may refrain from doing anything (including
disclosing any information) which might, based on the reasonable opinion
of its legal counsel, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person, and may do anything
which, in its opinion, is necessary or desirable to comply with any law
or regulation.
21.13 RESIGNATION OF THE FACILITY AGENT
(a) The Facility Agent may resign by giving written notice to the
Lenders and the Borrowers, in which case the Majority Lenders
shall appoint a successor facility agent of which the
Representative Borrower approves, such approval not to be
unreasonably withheld or delayed.
(b) If no successor Facility Agent has been appointed under
paragraph (a) above within thirty (30) days after notice of
resignation was given, the Facility Agent may appoint a
successor Facility Agent which shall be of similar standing to
the existing Facility Agent.
(c) The resignation of the Facility Agent and the appointment of any
successor facility agent will both become effective only when
the successor facility agent (i) notifies all the Parties that
it accepts its appointment and (ii) confirms that it is
satisfied that the rights under the Security Documents have been
assigned or transferred to it. On giving the notification and
confirmation, the successor facility agent will succeed to the
position of the Facility Agent and the term FACILITY AGENT will
mean the successor facility agent.
(d) The retiring Facility Agent must, at its own cost, make
available to the successor Facility Agent such documents and
records and provide such assistance as the successor Facility
79
Agent may reasonably request for the purposes of performing its
functions as the Facility Agent under the Finance Documents or
to ensure that the Finance Documents constitute perfected and
enforceable security in its favour (to the extent applicable).
(e) Upon its resignation becoming effective, this Clause will
continue to benefit the retiring Facility Agent in respect of
any action taken or not taken by it in connection with the
Finance Documents while it was the Facility Agent, and, subject
to paragraph (d) above, it will have no further obligations in
its capacity as Facility Agent under any Finance Document.
(f) The Majority Lenders may, by notice to the Facility Agent,
require it to resign under paragraph (a) above.
21.14 RELATIONSHIP WITH LENDERS
(a) The Facility Agent may treat each Lender as a Lender entitled to
payments under this Agreement and as acting through its Facility
Office(s) until it has received not less than five (5) Business
Days' prior notice from that Lender to the contrary.
(b) The Facility Agent may at any time, and must if requested to do
so by the Majority Lenders, convene a meeting of the Lenders.
(c) The Facility Agent must keep a register of all the Parties and
supply any other Party with a copy of the register on request.
The register will include each Lender's Facility Office(s) and
contact details for the purposes of this Agreement.
21.15 NOTICE PERIOD
Where this Agreement specifies a minimum period of notice to be given to
the Facility Agent, the Facility Agent may, at its discretion, accept a
shorter notice period.
22. EVIDENCE AND CALCULATIONS
22.1 ACCOUNTS
Accounts maintained by the Facility Agent in connection with this
Agreement are conclusive (save for manifest error) evidence of the
matters to which they relate for the purpose of any litigation or
arbitration proceedings and shall provide a reasonably detailed
breakdown.
22.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by the Facility Agent of a rate or
amount under the Finance Documents will be, in the absence of manifest
error, conclusive evidence of the matters to which it relates and shall
include a reasonably detailed breakdown.
22.3 CALCULATIONS
Any interest or fee accruing under this Agreement accrues from day to
day and is calculated on the basis of the actual number of days elapsed
and a year of 360 days or otherwise, depending on what the Facility
Agent determines is market practice.
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23. FEES
23.1 COMMITMENT FEE
(a) The Representative Borrower must pay to the Facility Agent for
and on behalf of the Lenders a commitment fee calculated at the
rate of 0.25 per cent. of the undrawn, uncancelled amount of the
Total Commitments. The commitment fee shall accrue from the day
following the Closing Date.
(b) Accrued commitment fee is payable quarterly in arrears, the
first payment falling due on the date which falls three (3)
months after the Closing Date. Accrued commitment fee is also
payable to the Facility Agent for a Lender on the date its
Commitment is cancelled in full.
23.2 UNDERWRITING AND ARRANGEMENT FEE
The Borrowers must pay to the Bookrunners arrangement fees in the manner
agreed in the Fee Letter between the Bookrunners and the Representative
Borrower.
23.3 FACILITY AGENT'S FEE
The Borrowers must pay to the Facility Agent an agency fee in the manner
agreed in the Fee Letter between the Bookrunners and the Representative
Borrower.
23.4 REFUND OF FEES
The fees referred to in this Clause 23 and the Fee Letter shall not be
refunded under any circumstances whatsoever once they have been paid.
24. INDEMNITIES AND BREAK COSTS
24.1 CURRENCY INDEMNITY
(a) Each Borrower shall, as an independent obligation and within
three (3) Business Days of demand, indemnify each Finance Party
against any cost, loss or liability which that Finance Party
incurs as a consequence of:
(i) the Finance Party receiving an amount in respect of any
Borrower's liability under the Finance Documents; or
(ii) that liability being converted into a claim, proof,
judgment or order,
in a currency other than the currency in which the amount is
expressed to be payable under the relevant Finance Document.
(b) Each Borrower waives any right it may have in any jurisdiction
to pay any amount under the Finance Documents in a currency
other than that in which it is expressed to be payable.
24.2 OTHER INDEMNITIES
(a) Each Borrower shall, as an independent obligation and within
three (3) Business Days of demand, indemnify each Finance Party
against any cost, loss or liability which that Finance Party
incurs as a consequence of:
(i) the occurrence of any Event of Default;
81
(ii) any failure by the Borrowers to pay any amount due under
a Finance Document on its due date;
(iii) (other than by reason of negligence or default by that
Finance Party) a Loan (or part of a Loan) not being made
after a Request has been delivered for that Loan; or
(iv) a Loan (or part of a Loan) not being prepaid in
accordance with a notice of prepayment.
The liability of the Borrowers in each case includes any cost, loss or
expense on account of funds borrowed, contracted for or utilised to fund
any amount payable under any Finance Document, any amount repaid or
prepaid or any Loan.
(b) Each Borrower must indemnify against any cost, loss or liability
incurred by any Finance Party as a result of:
(i) investigating any event which that Finance Party
reasonably believes to be a Default; or
(ii) acting or relying on any notice of that Borrower which
that Finance Party reasonably believes to be genuine,
correct and appropriately authorised.
(c) The Borrowers must indemnify and agree to hold harmless the
Finance Parties and in each case, each of its and their
Affiliates and each of their respective officers, directors,
employees, agents, advisors and representatives (each, an
INDEMNIFIED PARTY in whatever capacity) from and against any and
all claims, damages, losses, liabilities, costs, legal expenses
and expenses (altogether LOSSES), joint or several, that may be
incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or
relating to any claim, investigation, litigation or proceeding
(or the preparation of any defence with respect thereto)
commenced or threatened in relation to the Finance Documents or
the Related Contracts (or the transactions contemplated hereby
or thereby) or any use made or proposed to be made with the
proceeds of the Facility. This indemnity shall apply whether or
not such claims, investigation, litigation or proceeding is
brought by the Borrowers, the shareholders of the Borrowers or
the creditors of the Borrowers, an Indemnified Party or any
other person, or an Indemnified Party is otherwise a party
thereto, except to the extent such Losses are found in a final,
non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's gross negligence or
wilful misconduct.
(d) No Indemnified Party shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to the Borrowers or
any shareholders or creditors of the Borrowers for or in
connection with the transactions referred to in paragraph (c)
above, except for direct (as opposed to indirect or
consequential) damages or losses to the extent such liability is
found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's
gross negligence or wilful misconduct.
(e) The Borrowers must indemnify and hold each Finance Party
harmless on a full indemnity basis, from and against each and
every Loss:
(i) arising directly or indirectly out of or in any way
connected with the ownership, possession, performance,
transportation, management, sale, import to or export
from any jurisdiction, control, use or operation,
registration, navigation, certification, classification,
management, ▇▇▇▇▇▇▇, provisioning, the provision of
bunkers and lubricating oils, testing, design,
condition, delivery, acceptance, leasing, subleasing,
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chartering, insurance, maintenance, repair, service,
modification, refurbishment, dry docking, survey,
conversion, overhaul, replacement, removal,
repossession, return, redelivery, storage, sale,
disposal, the complete or partial removal,
decommissioning, making safe, destruction, abandonment
or loss by the Borrowers, or any other person of any of
the Vessels or caused by any of the Vessels becoming a
wreck or an obstruction to navigation, whether or not
such liability may be attributable to any defect in any
of the Vessels or to the design, construction or use
thereof or from any maintenance, service, repair, dry
docking, overhaul, inspection or for any other reason
whatsoever (whether similar to any of the foregoing or
not), and regardless of when the same shall arise and
whether or not any of the Vessels (or any part thereof)
is in possession or control of the Borrowers, or the
Manager or any other person and whether or not the same
is in United Kingdom waters or abroad;
(ii) arising directly or indirectly out of or in any way
connected with any Release of Hazardous Material, any
Environmental Claim in respect of a Vessel, or any
breach of an Environmental Law or the terms and
conditions of an Environmental Approval;
(iii) as a consequence of any claim that any design, article
or material in any of the Vessels or any part thereof or
relating thereto or the operation or use thereof
constitutes an infringement of patent, copyright, design
or other proprietary right; or
(iv) in preventing or attempting to prevent the arrest,
seizure, taking in execution, requisition, impounding,
forfeiture or detention of any of the Vessels or in
securing or attempting to secure the release of any of
the Vessels.
(f) Clause 24.2(e) shall not extend to any claims, losses or
liabilities (the "LOSSES") incurred by the Finance Parties to
the extent that such Losses are a result of the gross negligence
or wilful misconduct of any of the Finance Parties.
24.3 BREAK COSTS
(a) Each Borrower must pay to each Lender, or as the case may be,
each Swap Bank, its Break Costs in accordance with this
Agreement.
(b) In respect of a Lender, Break Costs are the amount (if any)
determined by the relevant Lender by which:
(i) the interest which that Lender would have received for
the period from the date of receipt of payment of a Loan
or an overdue amount to the last day of the current Term
for that Loan or overdue amount if the principal or
overdue amount received had been paid on the last day of
that Term;
exceeds
(ii) the amount which that Lender would be able to obtain by
placing an amount equal to the amount received by it on
deposit with a leading bank in the appropriate interbank
market for a period starting on the Business Day
following receipt and ending on the last day of the
applicable Term.
(c) In respect of a Swap Bank and a Swap Agreement, BREAK COSTS are
the amount (if any) determined by that Swap Bank as being an
amount equal to any Swap Termination Payment for that Swap
Agreement.
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(d) Each Lender must supply to the Representative Borrower details
of the amount of any Break Costs claimed by it under this
Clause.
25. EXPENSES
25.1 INITIAL COSTS
The Borrowers must pay to each Finance Party the amount of all costs and
expenses (including legal fees) properly incurred by it in connection
with (but not limited to) the negotiation, preparation, printing and
execution of the Finance Documents.
25.2 SUBSEQUENT COSTS
The Borrowers must pay to each Finance Party the amount of all costs and
expenses (including reasonable or otherwise capped legal fees) incurred
by it in connection with:
(a) the negotiation, preparation, printing and execution of any
Finance Document (other than a Transfer Certificate) executed
after the date of this Agreement; and
(b) any amendment, waiver or consent requested by or on behalf of
the Borrowers or specifically allowed by this Agreement.
The Borrowers shall not be required to bear the amount of any costs and
expenses (including reasonable or otherwise capped legal fees) incurred
by a Lender or a New Lender (as that term is defined in Clause 28.2
(Assignments and transfers by Lender)) in connection with any voluntary
transfer made by a Lender under this Agreement or any of the Security
Agreements. In the event that a Lender is required to undertake any such
transfers as a result of the provisions of Clause 11.4 (Mitigation) any
costs of that Lender or a New Lender arising out of such transfer shall
be payable by the Borrowers.
25.3 ENFORCEMENT COSTS
The Borrowers must pay to each Finance Party the amount of all costs and
expenses (including legal fees) incurred by it in connection with the
enforcement or attempted enforcement of, or the preservation or
attempted preservation of any rights under, any Finance Document.
26. WAIVER OF CONSEQUENTIAL DAMAGES
In no event shall any Finance Party be liable on any theory of liability
for any special, indirect, consequential or punitive damages and each
Borrower hereby waives, releases and agrees (for itself and on behalf of
its Subsidiaries) not to ▇▇▇ upon any such claim for any such damages,
unless caused by the fraud, wilful default or gross negligence of the
relevant Finance Party in performance of any of its obligations under
this Agreement or any of the Finance Documents.
27. AMENDMENTS AND WAIVERS
27.1 PROCEDURE
(a) Except as provided in this Clause 27, no term of the Finance
Documents may be amended or waived without the agreement of the
Representative Borrower and the Majority Lenders. The Facility
Agent may effect, on behalf of any Finance Party, an amendment
or waiver allowed under this Clause.
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(b) The Facility Agent must promptly notify the other Parties and
the Swap Banks of any amendment or waiver effected by it under
paragraph (a) above. Any such amendment or waiver is binding on
all the Parties.
27.2 EXCEPTIONS
(a) An amendment or waiver which relates to:
(i) the definition of MAJORITY LENDERS in Clause 1.1
(Definitions);
(ii) an extension of the date of payment of any amount to a
Lender under the Finance Documents;
(iii) a reduction in the amount of any payment of principal,
interest, fee or other amount payable to a Lender under
the Finance Documents;
(iv) an increase in, or an extension of, a Commitment or the
Total Commitments;
(v) a release of a Borrower;
(vi) a term of a Finance Document which expressly requires
the consent of each Lender;
(vii) the right of a Lender to assign or transfer its rights
or obligations under the Finance Documents;
(viii) a reduction in the Margin;
(ix) the release of any Security Document other than in
accordance with the terms of this Agreement; or
(x) this Clause,
may only be made with the consent of all the Lenders and the
Representative Borrower such consent not to be unreasonably
withheld or delayed.
(b) An amendment or waiver which relates to the rights or
obligations of an Administrative Party may only be made with the
consent of that Administrative Party, the Majority Lenders and
the Representative.
27.3 CHANGE OF CURRENCY
If a change in any currency of a country occurs (including where there
is more than one currency or currency unit recognised at the same time
as the lawful currency of a country), the Finance Documents will be
amended to the extent the Facility Agent (acting reasonably and on the
instructions of the Majority Lenders and after consultation with the
Representative Borrower) determines is necessary to reflect the change.
27.4 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Finance Party under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
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(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any right is not a waiver of that
right.
28. CHANGES TO THE PARTIES
28.1 ASSIGNMENTS AND TRANSFERS BY OBLIGORS
No Borrower may assign or transfer any of its rights and obligations
under the Finance Documents without the prior consent of all the
Lenders.
28.2 ASSIGNMENTS AND TRANSFERS BY LENDERS
(a) A Lender (the EXISTING LENDER) may, subject to the following
provisions of this Subclause, at any time assign or transfer
(including by way of novation) any of its rights and obligations
under this Agreement to another bank, financial institution or
to a trust, fund or other entity which is regularly engaged or
established for the purpose of making, purchasing or otherwise
investing in loans, securities or other financial assets (the
NEW LENDER) without the consent of any of the Borrowers.
(b) An Existing Lender may at any time assign or transfer (including
by way of novation) any of its rights and obligations under this
Agreement to an Affiliate of the Existing Lender without the
consent of any of the Borrowers.
(c) A transfer of obligations will be effective only if either:
(i) the obligations are novated in accordance with the
following provisions of this Clause 28; or
(ii) the New Lender confirms to the Facility Agent and the
Representative Borrower in form and substance reasonably
satisfactory to the Facility Agent and the
Representative Borrower that it is bound by the terms of
this Agreement.
(d) On the transfer becoming effective in this manner, the relevant
Lender will be released from its obligations under this
Agreement to the extent that they are transferred to the New
Lender.
(e) Any reference in this Agreement to a Lender includes a New
Lender but excludes a Lender if no amount is or may be owed to
or by it under this Agreement.
28.3 PROCEDURE FOR TRANSFER BY WAY OF NOVATIONS
(a) In this Subclause:
TRANSFER DATE means, for a Transfer Certificate, the later of:
(i) the proposed Transfer Date specified in that Transfer
Certificate; and
(ii) the date on which the Facility Agent executes that Transfer
Certificate.
(b) A novation is effected if:
(i) the Existing Lender and the New Lender deliver to the
Facility Agent a duly completed Transfer Certificate;
and
86
(ii) the Facility Agent executes it.
(c) On the Transfer Date:
(i) the New Lender will assume the rights and obligations of
the Existing Lender expressed to be the subject of the
novation in the Transfer Certificate in substitution for
the Lender; and
(ii) the Existing Lender will be released from those
obligations and cease to have those rights.
(d) Each Party (other than the Existing Lender and the New Lender)
irrevocably authorises the Facility Agent to execute any duly
completed Transfer Certificate on its behalf.
28.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDER
(a) Unless expressly agreed to the contrary, an Existing Lender is
not responsible to a New Lender for:
(i) the legality, validity, effectiveness, completeness,
accuracy, adequacy or enforceability of any Finance
Document or any other document;
(ii) the financial condition of any Borrower;
(iii) the performance and observance by any Borrower of its
obligations under the Finance Documents or any other
documents; or
(iv) the accuracy of any statement or information (whether
written or oral) made in or supplied in connection with
any Finance Document,
and any representations or warranties implied by law are
excluded.
(b) Each New Lender confirms to the Existing Lender that it:
(i) has made, and will continue to make, its own independent
appraisal of all risks arising under or in connection
with the Finance Documents (including the financial
condition and affairs of each Borrower and its related
entities and the nature and extent of any recourse
against any Party or its assets) in connection with its
participation in this Agreement; and
(ii) has not relied exclusively on any information supplied
to it by the Existing Lender in connection with any
Finance Document.
(c) Nothing in any Finance Document requires an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the
rights and obligations assigned or transferred under
this Clause; or
(ii) support any losses incurred by the New Lender by reason
of the non-performance by any Borrower of its
obligations under any Finance Document or otherwise.
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28.5 COSTS RESULTING FROM CHANGE OF LENDER OR FACILITY OFFICE
If:
(a) a Lender assigns or transfers any of its rights and obligations
under the Finance Documents or changes its Facility Office; and
(b) as a result of circumstances existing at the date on which the
assignment, transfer or change occurs, a Borrower would be
obliged to pay a Tax Payment or an Increased Cost,
then, (i) if it changes its Facility Office, the relevant Lender
(directly or through the Facility Agent) shall inform the Representative
Lender of such change of Facility Office and (ii) unless the assignment,
transfer or change is made by a Lender to mitigate any circumstances
giving rise to a Tax Payment, Increased Cost or a right to be prepaid
and/or cancelled by reason of illegality or is after the occurrence of a
Default which is continuing, the relevant Borrower need only pay that
Tax Payment or Increased Cost to the same extent that it would have been
obliged to if no assignment, transfer or change had occurred.
28.6 CHANGES TO THE REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
of which it is an Affiliate) ceases to be a Lender, the Facility Agent
must (in consultation with the Borrower) appoint another Lender or an
Affiliate of a Lender to replace that Reference Bank.
28.7 ACCESSION OF A BORROWER
(a) The Representative Borrower shall procure that each of the Vessels
listed in Part 2 of Schedule 1 is purchased in the performance of its
obligations under the Asset Purchase Agreement by itself, one of the
Original Borrowers or one of the entities listed in the column headed
'Name of Borrower' in Part 2 of Schedule 1 (SUBSEQUENT BORROWER). If the
purchaser of such Vessel is one of the Subsequent Borrowers, the
Representative Borrower shall procure that such Subsequent Borrower
becomes bound by the terms of this Agreement as a Borrower by executing
and delivering to the Facility Agent a Borrower Accession Agreement.
(b) If a drawdown is proposed under this Agreement in respect of an
Identified Vessel or an Additional Vessel or any other vessel and such
vessel is, or is to be, owned by a person other than an Original
Borrower, the Representative Borrower shall procure that such person is
a wholly owned Subsidiary of the Representative Borrower registered in
Cyprus, the ▇▇▇▇▇▇▇▇ Islands, the United Kingdom or Bermuda or any other
jurisdiction acceptable to the Facility Agent acting on the instructions
of the Majority Lenders, and on or prior to the Utilisation Date in
respect of the relevant drawdown, such person becomes bound by this
Agreement as a Borrower by executing and delivering to the Facility
Agent a Borrower Accession Agreement.
29. DISCLOSURE OF INFORMATION
Until the date of the IPO or for one year from the date of signing of
this Agreement, no Finance Party may disclose any information supplied
to it, by or on behalf of the Borrowers, the Charterers or the Finance
Documents relating to this Facility, save that each Finance Party may
disclose such information as that Finance Party shall consider
appropriate in respect of information supplied to it, by or on behalf of
the Borrowers, the Charterers or the Finance Documents to:
(a) in the case of any other Finance Party, any of its Affiliates;
or
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(b) any other person to (or through) whom an Existing Lender assigns
or transfers (or may potentially assign or transfer) all or any
of its rights and obligations under this Agreement or with (or
through) whom a Lender enters into (or may potentially enter
into) any sub-participation in relation to, or any other
transaction under which payments are to be made by reference to,
this Agreement or the Borrowers; or
(c) any person to whom, and to the extent that, information is
required to be disclosed by any Applicable Law; or
(d) any other Finance Party; or
(e) to its and the Borrowers' professional advisors,
PROVIDED ALWAYS that, in relation to paragraph (b) above, the person to
whom the information is to be given has entered into a Confidentiality
Undertaking which includes the express prohibition on sharing
information relating to this Facility. Except as provided in this
Clause, a Lender may not disclose any information about any Borrower,
the Charterers or the Finance Documents to any person.
30. SET-OFF
A Finance Party may set off any matured obligation owed to it by a
Borrower under the Finance Documents against any obligation (whether or
not matured) owed by that Finance Party to that Borrower, regardless of
the place of payment, booking branch or currency of either obligation,
provided always that if a Finance Party intends to effect a set-off at a
time when there is no continuing Event of Default, it shall give the
Representative Borrower notice of its intention so to do. If the
obligations are in different currencies, that Finance Party may convert
either obligation at a market rate of exchange in its usual course of
business for the purpose of the set-off.
31. PRO RATA SHARING
31.1 REDISTRIBUTION
If any amount owing by a Borrower under this Agreement to a Lender (the
RECOVERING LENDER) is discharged by payment, set-off or any other manner
other than through the Facility Agent under this Agreement (a RECOVERY),
then:
(a) the recovering Lender must, within three (3) Business Days,
supply details of the recovery to the Facility Agent;
(b) the Facility Agent must calculate whether the recovery is in
excess of the amount which the recovering Lender would have
received if the recovery had been received by the Facility Agent
under this Agreement; and
(c) the recovering Lender must pay to the Facility Agent an amount
equal to such excess (the REDISTRIBUTION).
31.2 EFFECT OF REDISTRIBUTION
(a) The Facility Agent must treat a redistribution as if it were a
payment by the relevant Borrower under this Agreement and
distribute it among the Lenders, other than the recovering
Lender, accordingly.
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(b) When the Facility Agent makes a distribution under paragraph (a)
above, the recovering Lender will be subrogated to the rights of
the Finance Parties which have shared in that redistribution.
(c) If and to the extent that the recovering Lender is not able to
rely on any rights of subrogation under paragraph (b) above, the
relevant Borrower will owe the recovering Lender a debt which is
equal to the redistribution, immediately payable and of the type
originally discharged.
(d) If:
(i) a recovering Lender must subsequently return a recovery,
or an amount measured by reference to a recovery, to any
Borrower; and
(ii) the recovering Lender has paid a redistribution in
relation to that recovery,
each Finance Party must reimburse the recovering Lender all or
the appropriate portion of the redistribution paid to that
Finance Party, together with interest for the period while it
held the re-distribution. In this event, the subrogation in
paragraph (b) above will operate in reverse to the extent of the
reimbursement.
31.3 EXCEPTIONS
Notwithstanding any other term of this Clause, a recovering Lender need
not pay a redistribution to the extent that:
(a) it would not, after the payment, have a valid claim against the
relevant Borrower in the amount of the redistribution; or
(b) it would be sharing with another Finance Party any amount which
the recovering Lender has received or recovered as a result of
legal or arbitration proceedings, where:
(i) the recovering Lender notified the Facility Agent of
those proceedings; and
(ii) the other Finance Party had an opportunity to
participate in those proceedings but did not do so or
did not take separate legal or arbitration proceedings
as soon as reasonably practicable after receiving notice
of them.
32. SEVERABILITY
If a term of a Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(a) the legality, validity or enforceability in that jurisdiction of
any other term of the Finance Documents; or
(b) the legality, validity or enforceability in other jurisdictions
of that or any other term of the Finance Documents.
33. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts and
by facsimile provided that original signed copies are provided within a
reasonable period of time thereafter. This has the same effect as if the
signatures on the counterparts were on a single copy of the Finance
Document.
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34. NOTICES
34.1 IN WRITING
(a) Any communication in connection with a Finance Document must be
in writing and, unless otherwise stated, may be given in person,
by post, fax, e-mail or by any other electronic communication
approved by the Facility Agent.
(b) For the purpose of the Finance Documents, an electronic
communication will be treated as being in writing.
(c) Unless it is agreed to the contrary, any consent or agreement
required under a Finance Document must be given in writing.
34.2 CONTACT DETAILS
(a) Except as provided below, the contact details of each Party for
all communications in connection with the Finance Documents are
those notified by that Party for this purpose to the Facility
Agent on or before the date it becomes a Party. The Facility
Agent shall distribute the details which it holds on request.
(b) The contact details of the Representative Borrower for this
purpose are:
Address: Global Ship Lease Inc
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax number: ▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: CFO
(c) The contact details of the Facility Agent for this purpose are:
Address: Fortis Syndicated Loans Agency
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel number: ▇▇▇ (▇) ▇▇ ▇▇▇ ▇▇▇▇
Fax number: ▇▇▇ (▇) ▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ de Baan
(d) A Party may change its contact details by giving five (5)
Business Days' notice to the Facility Agent or (in the case of
the Facility Agent) to the other Parties.
(e) Where a Party nominates a particular department or officer to
receive a communication, a communication will not be effective
if it fails to specify that department or officer.
(f) Any communication for a Borrower shall be sent to the
Representative Borrower and service on the Representative
Borrower in accordance with Clause 34.3 shall be deemed good
service on the relevant Borrower.
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34.3 EFFECTIVENESS
(a) Except as provided below, any communication in connection with a
Finance Document will be deemed to be given as follows:
(i) if delivered in person, at the time of delivery;
(ii) if posted, five (5) days after being deposited in the
post, postage prepaid, in a correctly addressed
envelope;
(iii) if by fax, when received in legible form; and
(iv) if by e-mail or any other electronic communication, when
received in legible form.
(b) A communication given under paragraph (a) above but received on
a non-working day or after business hours in the place of
receipt will only be deemed to be given on the next working day
in that place.
(c) A communication or document to be made or delivered to the
Facility Agent will be effective only when received by the
Facility Agent and then only if it is expressly marked for the
attention of the department or officer identified with the
Facility Agent's signature below (or any substitute department
or officer as the Facility Agent shall specify for this
purpose).
34.4 BORROWERS
All communications under the Finance Documents to or from a Borrower
must be sent through the Facility Agent or with a copy to the Facility
Agent.
34.5 ENTIRE AGREEMENT
This Agreement and the other Finance Documents entered into pursuant to
this Agreement contain the whole agreement between the parties relating
to the transactions contemplated by this Agreement and supersede all
previous agreements between the parties relating to such transactions.
35. LANGUAGE
(a) Any notice given in connection with a Finance Document must be
in English.
(b) Any other document provided in connection with a Finance
Document must be:
(i) in English; or
(ii) (unless the Facility Agent otherwise agrees) accompanied
by a certified English translation. In this case, the
English translation prevails unless the document is a
statutory or other official document.
36. GOVERNING LAW
This Agreement is governed by English law.
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37. ENFORCEMENT
37.1 JURISDICTION
(a) The English courts have jurisdiction to settle any dispute in
connection with any Finance Document.
(b) The English courts are the most appropriate and convenient
courts to settle any such dispute.
(c) This Clause is for the benefit of the Lenders only. To the
extent allowed by law, the Lenders may take:
(i) proceedings in any other court; and
(ii) concurrent proceedings in any number of jurisdictions.
37.2 SERVICE OF PROCESS
(a) Each Borrower irrevocably appoints GSLS at its registered office
from time to time as its agent under the Finance Documents for
service of process in any proceedings before the English courts.
(b) If any person appointed as process agent is unable for any
reason to act as agent for service of process, the Borrowers
must immediately appoint another agent on terms acceptable to
the Facility Agent. Failing this, the Facility Agent may appoint
another agent for this purpose.
(c) Each Borrower agrees that failure by a process agent to notify
it of any process will not invalidate the relevant proceedings.
(d) This Clause does not affect any other method of service allowed
by law.
37.3 WAIVER OF IMMUNITY
Each Borrower irrevocably and unconditionally:
(a) agrees not to claim any immunity from proceedings brought by a
Finance Party against it in relation to a Finance Document and
to ensure that no such claim is made on its behalf;
(b) consents generally to the giving of any relief or the issue of
any process in connection with those proceedings; and
(c) waives all rights of immunity in respect of it or its assets.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.
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SCHEDULE 1
ORIGINAL PARTIES
PART 1
ORIGINAL BORROWERS AND THE IDENTIFIED VESSELS
DELIVERED VESSELS
JURISDICTION CHARTER RATE
OF INCORPORATION OF (USD PER
VESSEL NAME NAME OF BORROWER THE BORROWER SIZE (TEU) CHARTER PERIOD DAY) CHARTERER
Ville d'Aquarius Global Ship Lease 2 Cyprus 4,113 5 years 21,500 CMA CGM
Limited
Ville d'Orion Global Ship Lease 1 Cyprus 4,113 5 years 21,500 CMA CGM
Limited
▇▇▇▇▇ ▇▇▇▇▇▇ Global Ship Lease 6 Cyprus 2,207 10 years 17,900 CMA CGM
Limited
Kumasi Global Ship Lease 7 Cyprus 2,207 10 years 17,900 CMA CGM
Limited
▇▇▇▇▇ ▇▇▇▇▇▇ Global Ship Lease 8 Cyprus 2,207 10 years 17,900 CMA CGM
Limited
MOL Rainbow Global Ship Lease 5 Cyprus 2,207 10 years 17,900 CMA CGM
Limited
CMA CGM Matisse Global Ship Lease 3 Cyprus 2,262 9 years 17,900 CMA CGM
Limited
CMA CGM Utrillo Global Ship Lease 4 Cyprus 2,262 9 years 17,900 CMA CGM
94
Limited
CMA CGM Global Ship Lease 9 Cyprus 2,272 9 years 17,900 CMA CGM
La Tour Limited
CMA CGM Manet Global Ship Lease 10 Cyprus 2,272 9 years 17,900 CMA CGM
Limited
CMA CGM Alcazar GSL Alcazar Inc ▇▇▇▇▇▇▇▇ Islands 5,100 13 years 33,250 CMA CGM
SUBSEQUENT VESSEL
JURISDICTION OF
NAME OF BORROWER INCORPORATION OF THE CHARTER RATE
VESSEL NAME BORROWER SIZE (TEU) CHARTER PERIOD (USD PER DAY) CHARTERER
CMA CGM Chateau D'If GSL Chateau d'If Inc ▇▇▇▇▇▇▇▇ Islands 5,100 13 years 33,250 CMA CGM
--------------------------------------------------------------------------------
OTHER BORROWERS
JURISDICTION OF
BORROWER NAME INCORPORATION
Global Ship Lease England
Services Limited
--------------------------------------------------------------------------------
95
PART 2
OTHER IDENTIFIED BORROWERS AND IDENITIFIED VESSELS
JURISDICTION CHARTER RATE
OF INCORPORATION OF (USD PER
VESSEL NAME NAME OF BORROWER THE BORROWER SIZE (TEU) CHARTER PERIOD DAY) ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ Global Ship Lease 13 Cyprus 10.960 17 years 44,405 CMA CGM
Limited
CMA CGM America Global Ship Lease 16 Cyprus 4,045 14 years 23,500 CMA CGM
Limited
CMA CGM Sambhar Global Ship Lease 15 Cyprus 4,045 14 years 23,500 CMA CGM
Limited
CMA CGM Jamaica Global Ship Lease 14 Cyprus 4,298 14 years 23,500 CMA CGM
Limited
CMA CGM Berlioz Global Ship Lease 17 Cyprus 6,627 12 years 31,000 CMA CGM
Limited
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PART 3
ORIGINAL LENDERS
NAME OF ORIGINAL LENDER COMMITMENTS (US$)
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SCHEDULE 2
INITIAL CONDITIONS PRECEDENT DOCUMENTS
PART 1
INITIAL CONDITIONS PRECEDENT DOCUMENTS
1. REPRESENTATIVE BORROWER
(a) A certified copy* of the constitutional documents of the Representative
Borrower together with an up to date Certificate of Goodstanding dated
no more than ten (10) Business Days prior to the date of this Agreement.
(b) A certified copy* of a resolution of the board of directors and the
shareholders of the Representative Borrower:
(i) approving the terms of, and the transactions contemplated by,
each Finance Document and each Related Contract to which the
Representative Borrowers a party and resolving that it executes
each such Finance Document and each Related Contract, then to be
executed;
(ii) authorising a specified person or persons to execute each
Finance Document and each Related Contract on its behalf to
which it is a party, then to be executed; and
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be
signed and/or despatched by it under or in connection with each
Finance Document and each Related Contract to which it is a
party, then to be executed.
(c) A specimen of the signature of each person authorised by the resolution
referred to in paragraph(b).
(d) A certified copy* of all other resolutions, consents, licences,
exemptions and filings, corporate, official or otherwise which the
Facility Agent may reasonably require in connection with this Agreement
or any other Finance Document.
2. OTHER BORROWERS
(a) A certified copy* of the constitutional documents of each other dated no
more than ten (10) Business Days prior to the date of this Agreement.
(b) A certified copy* of a resolution of the board of directors of each
other Borrower:
(i) approving the terms of, and the transactions contemplated by,
each Finance Document and each Related Contract to which the
relevant Borrower is a party and resolving that it executes each
such Finance Document and each Related Contract, then to be
executed;
(ii) authorising a specified person or persons to execute each
Finance Document and each Related Contract on its behalf to
which it is a party, then to be executed; and
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be
signed and/or despatched by it under or in connection with each
Finance Document and each Related Contract to which it is a
party, then to be executed.
(c) A specimen of the signature of each person authorised by the resolution
referred to in paragraph1(b).
98
(d) A certified copy* of all other resolutions, consents, licences,
exemptions and filings, corporate, official or otherwise which the
Facility Agent may reasonably require in connection with this Agreement
or any other Finance Document.
3. FINANCE DOCUMENTS AND RELATED CONTRACTS
(a) A duly executed original of this Agreement.
(b) A duly executed original of the Retention Account Charge.
(c) A duly executed original of each Pledge of Shares for each Borrower
listed in Part 1 of Schedule 1.
(d) A duly executed original of each Swap Agreement Assignment.
(e) A duly executed original of the Fee Letter.
(f) Duly executed originals of all notices of assignment required to be
served under each Security Document referred to above and duly executed
originals of the acknowledgements thereof (or, where it is not possible
to provide originals of the same, faxed copies with such originals to
follow as soon as practicable after the date of this Agreement), duly
executed by each relevant counterparty.
4. OTHER DOCUMENTS
(a) A copy of any other authorisation or other document, opinion or
assurance which the Facility Agent considers to be necessary or
desirable in connection with the entry into and performance of, and the
transactions contemplated by, any Finance Document or any Related
Contract or for the validity and enforceability of any Finance Document
or any Related Contract.
(b) A letter from GSLS agreeing to its appointment as process agent for the
Borrowers under the Finance Documents.
(c) Due diligence of the Borrowers acceptable to the Facility Agent
including management and systems.
(d) Confirmation from the Lenders that they have satisfied all of their
"know your customer" requirements.
5. LEGAL OPINIONS
(a) A legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, London office, English legal
advisors to the Lenders, addressed to the Facility Agent as agent for
and on behalf of itself and the Lenders.
(b) A legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Island legal advisors to
the Facility Agent, addressed to the Facility Agent as agent for and on
behalf of itself and the Lenders.
(c) A legal opinion of Chrysses ▇▇▇▇▇▇▇▇▇▇▇ , Cypriot legal advisors to the
Lenders, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
(d) A legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, Amsterdam office, Dutch legal
advisors to the Lenders, addressed to the Facility Agent as agent for
and on behalf of itself and the Lenders. A legal opinion of the legal
advisors to the Lenders in the jurisdiction of any of the Borrowers not
listed in (a) to (e) above, or in respect of any security to be taken in
a jurisdiction in which a Vessel is to be registered or flagged,
addressed to the Facility Agent as agent for and on behalf of itself and
the Lenders.
99
6. OTHER REQUIREMENTS
(a) Evidence satisfactory to the Facility Agent that the Accounts have been
opened with the Account Bank.
(b) Evidence satisfactory to the Agent that the Retention Account, each
Earnings Account and each Operating Account have been opened and at
least US$1 deposited in each such account.
* Each certified copy document must be certified by a director, officer or
duly authorised attorney of the Borrower as being true and complete as
at a date no earlier than the date falling three Business Days prior to
the date of this Agreement.
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PART 2
IDENTIFIED VESSEL CONDITION PRECEDENT DOCUMENTS
In respect of the Delivered Vessels on the Delivery Date of each Delivered
Vessel, and in respect of the Subsequent Vessels on the Delivery Date of each
Subsequent Vessel, the Facility Agent shall require the following documentation:
1. BORROWER
(a) A certified copy* of the constitutional documents of the Borrower or, if
previously provided to the Facility Agent, a certificate of the Borrower
certifying that such documents remain in full force and effect and have
not been amended since the date of such provision.
(b) A certified copy* of a resolution of the board of directors of the
Borrower (unless such resolution in relation to the issues below is still
in full force and effect):
(i) approving the terms of, and the transactions contemplated by, each
Finance Document and each Related Contract to which the Borrower is
a party and resolving that it executes each such Finance Document
and each Related Contract, then to be executed;
(ii) authorising a specified person or persons to execute each Finance
Document and each Related Contract on its behalf to which it is a
party, then to be executed; and
(iii) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with each Finance Document
and each Related Contract to which it is a party, then to be
executed.
(c) A specimen of the signature of each person authorised by the resolution
referred to in paragraph(b).
(d) A certified copy* of all other resolutions, consents, licences, exemptions
and filings, corporate, official or otherwise which the Lender may
reasonably require in connection with this Agreement or any other Finance
Document.
2. FINANCE DOCUMENTS AND RELATED CONTRACTS
(a) A duly executed original of each General Assignment relating to the
relevant Identified Vessel.
(b) A duly executed original of the Mortgage relating to each relevant
Identified Vessel.
(c) A duly executed original of the Earnings Account and Operating Account
Assignment relating to each relevant Identified Vessel.
(d) A duly executed original of the Swap Agreement Assignment relating to each
relevant Identified Vessel
(e) A duly executed original of each of the Manager's Undertakings relating to
each relevant Identified Vessel.
(f) A certified copy* of each relevant Management Agreement, duly executed and
in form and substance satisfactory to the Facility Agent;
101
(g) A certified copy* of each relevant Time Charter, duly executed, for a
duration and on charter rates as set out in Part 1 of Schedule 1 and
otherwise in form and substance satisfactory to the Facility Agent.
(h) A certified copy* of each relevant Charter Guarantee (if any), duly
executed.
(i) A certified copy* of the documentation pursuant to which each relevant
Identified Vessel has been sold to the Borrower.
(j) Duly executed originals of all notices of assignment required to be served
under each Security Document referred to above and duly executed originals
of the acknowledgements thereof (or, where it is not possible to provide
originals of the same, faxed copies with such originals to follow as soon
as practicable after the relevant Utilisation Date), duly executed by each
relevant counterparty.
3. OTHER DOCUMENTS
(a) A copy of any other authorisation or other document, opinion or assurance
which the Facility Agent considers to be necessary or desirable in
connection with the entry into and performance of, and the transactions
contemplated by, any Finance Document or any Related Contract or for the
validity and enforceability of any Finance Document or any Related
Contract.
(b) A letter from GSLS agreeing to its appointment as process agent for the
Borrowers under the Finance Documents.
(c) A letter from the appointed process agent agreeing to its appointment as
process agent for the Charterer and the Charter Guarantor (if applicable)
in respect of the acknowledgement of the relevant Time Charter, Charter
Guarantee and Earnings Assignment.
(d) A duly executed Borrower Accession Agreement in respect of the Borrower if
it is not an Original Borrower.
4. THE VESSEL TO BE DELIVERED
(a) A certified copy* of:
(i) a classification certificate in respect of each relevant Identified
Vessel showing the Vessel to be in class without overdue
recommendations or, conditions;
(ii) a valid Interim Safety Management Certificate for the Vessel;
(iii) a valid Document of Compliance; and
(iv) a valid International Ship Security Certificate for the Vessel.
(b) Evidence acceptable to the Facility Agent that the relevant Identified
Vessel has been delivered to the relevant Borrower (whether under the
relevant Shipbuilding Contract or otherwise) and title to such Identified
Vessel has passed to the relevant Borrower.
5. INSURANCE
(a) A certified copy of all current insurance policies in respect of the
relevant Identified Vessel or sufficient information so as to enable
▇▇▇▇▇, London to prepare the insurance report referred to in paragraph
5(d) below.
102
(b) A duly executed and, where necessary, notarised notice of assignment (and
acknowledgement of the same) of the Obligatory Insurances in respect of
the relevant Identified Vessel duly executed by the Borrower substantially
in the form provided for in the relevant General Assignment.
(c) Fax confirmation from each broker and club concerned with the Obligatory
Insurances of the relevant Identified Vessel that:
(i) the relevant cover is in effect;
(ii) they will accept notice of assignment of the Obligatory Insurances
in favour of the Facility Agent and execute an acknowledgement of
the notice in the form set out in the relevant schedule to the
General Assignment;
(iii) they will issue a letter of undertaking addressed to the Facility
Agent in the form set out in schedule 2 to the General Assignment in
the case of London brokers, in their standard form in the case of
London clubs, substantially in the form set out in schedule 2 or
schedule 3 of the General Assignment (as appropriate) in any other
case or such other form as shall be acceptable to the Facility Agent
acting reasonably and having regard to normal market practice at the
relevant time as advised to the Facility Agent by its insurance
advisors;
(iv) they will accept endorsement of a loss payable clause on the
policies in the form provided for in the General Assignment (in the
case of brokers and insurers other than clubs) or will note the
interest of the Facility Agent in the entry for the relevant
Identified Vessel by way of a loss payable clause in their current
standard form (in the case of clubs); and
(v) they are not aware of any mortgage, charge, assignment or other
encumbrance affecting the Obligatory Insurances with which they are
concerned (other than any previously disclosed by the Borrower to
the Facility Agent in writing).
(d) Confirmation from the Facility Agent of its satisfaction with a final
insurance report prepared by ▇▇▇▇▇, London.
(e) Confirmation from the Facility Agent of its receipt of a Valuation of the
relevant Identified Vessel.
6. OTHER REQUIREMENTS
(a) Evidence satisfactory to the Facility Agent (acting on behalf of the
Majority Lenders) that the Borrower has successfully completed an IPO
resulting in a minimum gross proceeds of USD300,000,000 and continues to
be listed on the NYSE or NASDAQ.
7. LEGAL OPINIONS
(a) A legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, London office, English legal
advisors to the Lenders, addressed to the Facility Agent as agent for and
on behalf of itself and the Lenders.
(b) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the each relevant Approved Flag State of the relevant Identified
Vessel, addressed to the Facility Agent as agent for and on behalf of
itself and the Lenders.
(c) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the relevant Borrower and (if applicable) the Charter Guarantor,
addressed to the Facility Agent as agent for and on behalf of itself and
the Lenders.
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(d) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the Charterer and (if applicable) the Charter Guarantor, addressed to
the Facility Agent as agent for and on behalf of itself and the Lenders.
8. OTHER REQUIREMENTS
* Each certified copy document must be certified by a director, officer or
duly authorised attorney of the Borrower as being true and complete as at
a date no earlier than the date falling three Business Days prior to the
relevant Delivery Date (in respect of the Delivered Vessels) or relevant
Delivery Date (in the case of each Subsequent Vessel).
104
PART 3
ADDITIONAL VESSEL CONDITIONS PRECEDENT
On the Delivery Date of each Additional Vessel or, as the case may be, the date
of designation in accordance with Clause 3.1(h) (Conditions precedent), the
Facility Agent shall require the following documentation:
1. BORROWER
(a) A certified copy* of the constitutional documents of the Borrower or, if
previously provided to the Facility Agent, a certificate of the relevant
Borrower certifying that such documents remain in full force and effect
and have not been amended since the date of such provision.
(b) A certified copy* of a resolution of the board of directors of the
relevant Borrower (unless such resolution in relation to the issues below
is still in full force and effect):
(i) approving the terms of, and the transactions contemplated by, each
Finance Document and each Related Contract to which the relevant
Borrower is a party and resolving that it executes each such Finance
Document and each Related Contract, then to be executed;
(ii) authorising a specified person or persons to execute each Finance
Document and each Related Contract on its behalf to which it is a
party, then to be executed; and
(iii) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with each Finance Document
and each Related Contract to which it is a party, then to be
executed.
(c) A specimen of the signature of each person authorised by the resolution
referred to in paragraph(b).
(d) A certified copy* of all other resolutions, consents, licences, exemptions
and filings, corporate, official or otherwise which the Lender may
reasonably require in connection with this Agreement or any other Finance
Document.
2. FINANCE DOCUMENTS AND RELATED CONTRACTS
(a) A duly executed original of a General Assignment relating to the
Additional Vessel.
(b) A duly executed original of the Mortgage relating to the Additional
Vessel.
(c) A duly executed original of the Pledge of Shares relating to the relevant
Borrower of each relevant Additional Vessel.
(d) A duly executed original of the Earnings Account and Operating Account
Assignment relating to each relevant Additional Vessel.
(e) A duly executed original of the Swap Agreement Assignment relating to each
relevant Additional Vessel
(f) A duly executed original of the of the Manager's Undertaking relating to
the Additional Vessel .
(g) A certified copy* of each relevant Management Agreement, duly executed and
in form and substance satisfactory to the Facility Agent;
105
(h) A certified copy* of the relevant Acceptable Charter, duly executed, and
in form and substance satisfactory to the Facility Agent.
(i) A certified copy* of the documentation pursuant to which the Additional
Vessel has been sold to the relevant Borrower.
(j) Duly executed originals of all notices of assignment required to be served
under each Security Document referred to above and duly and executed
originals of the acknowledgements thereof (or, where it is not possible to
provide originals of the same, faxed copies with such originals to follow
as soon as practicable after the relevant Utilisation Date), duly executed
by each relevant counterparty.
3. OTHER DOCUMENTS
(a) A copy of any other authorisation or other document, opinion or assurance
which the Facility Agent considers to be necessary or desirable in
connection with the entry into and performance of, and the transactions
contemplated by, any Finance Document or any Related Contract or for the
validity and enforceability of any Finance Document or any Related
Contract.
(b) A letter from the appointed process agent agreeing to its appointment as
process agent for the relevant Borrower under the Finance Documents.
(c) A letter from the appointed process agent agreeing to its appointment as
process agent for the relevant Approved Charterer in respect of the
acknowledgement of the General Assignment.
(d) A duly executed Borrower Accession Agreement in respect of the relevant
Borrower if such Borrower is not an Original Borrower.
4. THE VESSEL TO BE DELIVERED
(a) A certified copy* of:
(i) a classification certificate in respect of the Additional Vessel
showing the Additional Vessel to be in class without recommendation,
condition or qualification;
(ii) a valid Interim Safety Management Certificate for the Additional
Vessel;
(iii) a valid Document of Compliance; and
(iv) a valid International Ship Security Certificate for the Additional
Vessel.
(b) Evidence acceptable to the Facility Agent that the Additional Vessel has
been delivered to the relevant Borrower (whether under the relevant
Shipbuilding Contract or otherwise) and title to such Additional Vessel
has passed to the relevant Borrower.
5. INSURANCE
(a) A certified copy of all current insurance policies in respect of the
Additional Vessel or sufficient information so as to enable ▇▇▇▇▇, London
to prepare the insurance report referred to in paragraph 5(d) below.
(b) A duly executed and, where necessary, notarised notice of assignment (and
acknowledgement of the same) of the Obligatory Insurances in respect of
the Additional Vessel duly executed by the Borrower substantially in the
form provided for in the General Assignment.
106
(c) Fax confirmation from each broker and club concerned with the Obligatory
Insurances of the Additional Vessel that:
(i) the relevant cover is in effect;
(ii) they will accept notice of assignment of the Obligatory Insurances
in favour of the Facility Agent and execute an acknowledgement of
the notice in the form set out in the relevant schedule to the
General Assignment;
(iii) they will issue a letter of undertaking addressed to the Facility
Agent in the form set out in schedule 2 to the General Assignment in
the case of London brokers, in their standard form in the case of
London clubs, substantially in the form set out in schedule 2 or
schedule 3 of the General Assignment (as appropriate) in any other
case or such other form as shall be acceptable to the Facility Agent
acting reasonably and having regard to normal market practice at the
relevant time as advised to the Facility Agent by its insurance
advisors;
(iv) they will accept endorsement of a loss payable clause on the
policies in the form provided for in the General Assignment (in the
case of brokers and insurers other than clubs) or will note the
interest of the Facility Agent in the entry for the Additional
Vessel by way of a loss payable clause in their current standard
form (in the case of clubs); and
(v) they are not aware of any mortgage, charge, assignment or other
encumbrance affecting the Obligatory Insurances with which they are
concerned (other than any previously disclosed by the Borrower to
the Facility Agent in writing).
(d) Confirmation from the Facility Agent of its satisfaction with a final
insurance report prepared by ▇▇▇▇▇.
(e) Confirmation from the Facility Agent of its receipt of a Valuation of the
Additional Vessel.
6. OTHER REQUIREMENTS
(a) Evidence satisfactory to the Facility Agent (acting on behalf of the
Majority Lenders) that the Representative Borrower continues to be listed
on the NYSE or NASDAQ.
7. LEGAL OPINIONS
(a) A legal opinion of ▇▇▇▇▇ & Overy LLP, London office, English legal
advisors to the Lenders, addressed to the Facility Agent as agent for and
on behalf of itself and the Lenders.
(b) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the relevant Borrower and (if applicable) the Charter Guarantor,
addressed to the Facility Agent as agent for and on behalf of itself and
the Lenders.
(c) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the relevant Approved Flag State, addressed to the Facility Agent as
agent for and on behalf of itself and the Lenders.
(d) A legal opinion of the legal advisors to the Lenders in the jurisdiction
of the Approved Charterer, addressed to the Facility Agent as agent for
and on behalf of itself and the Lenders.
8. OTHER REQUIREMENTS
* Each certified copy document must be certified by a director, officer or
duly authorised attorney of the Borrower as being true and complete as at
a date no earlier than the date falling three Business
107
Days prior to the Delivery Date of the Additional Vessel or on the date of
designation pursuant to Clause 3.1(h).
108
SCHEDULE 3
CONDITIONS SUBSEQUENT TO DRAWING
The Facility Agent shall require the following documentation and evidence from
the Borrower, in respect of a Vessel at the time provided for in Clause 3.1(h)
or 3.1(i) (Conditions precedent), as applicable.
(a) Evidence that:
(i) the Mortgage in respect of the Vessel has been duly recorded in the
Shipping Register of the Approved Flag State and constitutes a first
priority security interest over the Vessel and that all taxes and
fees payable to the Shipping Register of the Approved Flag State in
respect of that Vessel have been paid in full;
(ii) the title to the Vessel is held by the relevant Borrower free of all
Security Interests other than Permitted Liens; and
(iii) the Vessel is provisionally registered in the name of the relevant
Borrower, in the Approved Flag State.
(b) Confirmation acceptable to the Facility Agent that the relevant Charterer
has accepted the Vessel pursuant to the terms of the relevant Time
Charter.
109
SCHEDULE 4
PAYMENTS
PART 1
FORM OF REQUEST
To: Fortis Bank (Nederland) N.V. as Facility Agent
From: [The Borrower]
Date: [ ]
US$800,000,000 CREDIT AGREEMENT DATED 2007 (the FACILITY AGREEMENT)
1. We wish to borrow a Loan from you as follows:
(a) Utilisation Date: [ ]
(b) Amount/currency: [ ]
(c) Term: [ ]
2. The relevant [Delivered] [Subsequent] [Additional] Vessel details are as
follows:
(a) Vessel Name: [ ]
(b) TEU: [ ]]
3. [The Loan shall be used towards general corporate purposes.]
4. Payment Instructions:
To include provisions that:
5. We confirm that each condition specified in the Facility Agreement which
must be satisfied on or before the date of this Request is satisfied on
the date of this Request.
By:
--------------------------
BORROWER
Authorised Signatory
110
PART 2
PAYMENT ADVICE
To: [The Borrower]
From: Fortis Bank (Nederland) N.V. as Facility Agent
Date: [ ]
US$800,000,000 CREDIT AGREEMENT DATED , 2007
Further to receipt of your request dated [ ] and attached hereto requesting the
advance of a Loan, we confirm that all amounts have been advanced in accordance
with the requirements of the attached Request.
111
SCHEDULE 5
CALCULATION OF THE MANDATORY COST
1. GENERAL
The Mandatory Cost is the weighted average of the rates calculated below
by the Facility Agent on the first day of a Term. The Facility Agent must
distribute each amount of Mandatory Cost among the Lenders on the basis of
the rate for each Lender.
2. FOR A LENDER LENDING FROM A FACILITY OFFICE IN THE U.K.
(a) The relevant rate for a Lender lending from a Facility Office in the U.K.
is the arithmetic mean of the rates notified by each of the Reference
Banks to the Facility Agent and calculated in accordance with the
following formulae:
E x 0.01
-------- per cent. per annum
300
where on the day of application of the formula:
E is the charge payable by the Reference Bank to the Financial
Services Authority under the fees rules (but, for this purpose,
calculated by the Facility Agent on a notional basis as being the
average of the fee tariffs within fee-block Category A1 (Deposit
acceptors) of the fees rules, applying any applicable discount and
ignoring any minimum fee required under the fees rules) and
expressed in pounds per (pound)1 million of the tariff base of that
Reference Bank.
(b) For the purposes of this paragraph 2:
(i) eligible liabilities and special deposit have the meanings given to
them at the time of application of the formula by the Bank of
England;
(ii) fees rules means the then current rules on periodic fees in the
Supervision Manual of the FSA Handbook; and
(iii) tariff base has the meaning given to it in the fees rules.
(c) Each rate calculated in accordance with a formula is, if necessary,
rounded upward to four decimal places.
(d) (i) Each Reference Bank must supply to the Facility Agent the
information required by it to make a calculation of the rate for
that Reference Bank. The Facility Agent may assume that this
information is correct in all respects.
(ii) If a Reference Bank fails to do so, the Facility Agent may assume
that the Reference Bank's obligations in respect of cash ratio
deposits, special deposits and the fees rules are the same as those
of a typical bank from its jurisdiction of incorporation with a
Facility Office in the same jurisdiction as its Facility Office.
(iii) The Facility Agent has no liability to any Party if its calculation
over or under compensates any Lender.
112
3. FOR A LENDER LENDING FROM A FACILITY OFFICE IN A PARTICIPATING MEMBER
STATE
(a) The relevant rate for a Lender lending from a Facility Office in a
Participating Member State is the percentage rate per annum notified
by that Lender to the Facility Agent as its cost of complying with
the minimum reserve requirements of the European Central Bank.
(b) If a Lender fails to specify a rate under paragraph (a) above, the
Facility Agent will assume that the Lender has not incurred any such
cost.
4. CHANGES
The Facility Agent may, after consultation with the Borrower and the
Lenders, notify all the Parties of any amendment to this Schedule which is
required to reflect:
(a) any change in law or regulation; or
(b) any requirement imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case,
any successor authority).
Any notification will be, in the absence of manifest error, conclusive and
binding on all the Parties.
113
SCHEDULE 6
FORM OF TRANSFER CERTIFICATE
To: The Borrower
From: [THE EXISTING BANK] and [THE NEW BANK]
Date: [ ]
US$800,000,000 FACILITY AGREEMENT DATED , 2007 (the FACILITY AGREEMENT)
We refer to Clause 28.3 (Procedure for transfer by way of novations) of the
Facility Agreement.
1. We [ ] (the EXISTING BANK) and [ ] (the NEW BANK) agree to the Existing
Bank and the New Bank novating all the Existing Bank's rights and
obligations referred to in the Schedule in accordance with Clause 28.3.
(Procedure for transfer by way of novations).
2. The specified date for the purposes of Clause 28.3(a) (Procedure for
transfer by way of novations) is [date of novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 34.2 (Contact details) are set out in the Schedule
attached to this Certificate.
4. This Novation Certificate is governed by English law.
5. [The New Bank confirms that the person beneficially entitled to interest
payable to the New Bank in respect of an advance under a Finance Document
is either:
(a) a company resident in the United Kingdom for United Kingdom tax
purposes; or
(b) a partnership, each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries
on a trade in the United Kingdom through a permanent establishment
and which brings into account in computing its chargeable profits
(for the purposes of section 11(2) of the Taxes Act) the whole of
any share of interest payable in respect of that advance that falls
to it by reason of sections 114 and 115 of the Taxes Act; or
(c) a company not so resident in the United Kingdom which carries on a
trade in the United Kingdom through a permanent establishment and
which brings into account interest payable in respect of that
advance in computing the chargeable profits (for the purposes of
section 11(2) of the Taxes Act) of that company.](1)
114
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE NOVATED
[Choose one of the following options (a) to (c):]
(a) all of the rights and obligations of the Existing Lender in respect of the
Facility - principal amount US$[ ].
(b) the principal amount of US$[ ] in respect of each of the Loans and all the
rights and obligations attached to the same-total principal amount US$[ ].
(c) the principal amount of US$[ ] in respect of [each of] Loan [ ] [and Loan
[ ] and [ ]] and all the rights and obligations attached to the same.
[NEW BANK]
[Facility Office Address for notices]
[Existing Bank] [New Bank]
By: By:
Date: Date:
The Transfer Date is confirmed by the Facility Agent as [ ].
FORTIS BANK (NEDERLANDS) N.V.
By:
115
SCHEDULE 7
COMPLIANCE CERTIFICATE
To: Fortis Bank (Nederland) N.V. Capital Corp. as Facility Agent
From: Global Ship Lease Inc.
US$800,000,000 FACILITY AGREEMENT DATED , 2007 (the FACILITY AGREEMENT)
1. Terms defined in the Facility Agreement have the same meaning in this
Certificate.
2. [I/We hereby certify that [no Default has occurred and is continuing or is
outstanding] [a Default under Clause [ ] of [specify document] is
outstanding and the following steps are being taken to remedy it [ ].
3. I/We hereby certify that as of the date of this Certificate the status of
the financial covenants set out in Clause 17 (Financial Covenants) of the
Facility Agreement are as follows:
(a) CASH BALANCE: the Cash Balance exceeds the lower of:
(i) fifteen million Dollars (US$15,000,000) and
(ii) six (6) months' Net Interest Expense of the Borrowers.
(b) MINIMUM NET WORTH: the Minimum Net Worth of the Borrower is at least
two hundred million Dollars (US$200,000,000).
(c) FINANCIAL NET DEBT RATIO: the ratio of Financial Net Debt to Total
Capitalisation does not exceed 75%.
(d) EBITDA TO DEBT SERVICE RATIO: the ratio of EBIDTA to Debt Service is
not less than 1.10 to 1 on a trailing four quarter basis.
4. I/ We certify that the rates of charterhire payable under the Time
Charters for each of the Vessels are as follows:
Name of Vessel Charterhire Rate (US$/ day)
Yours faithfully,
[...........................]
Chief Executive Officer
[or]
................................
Chief Financial Officer
116
SCHEDULE 8
EBITDA TO DEBT SERVICE COMPLIANCE CERTIFICATE
PART 1
COMPLIANCE CERTIFICATE FOR A NEW VESSEL WHICH IS NOT TO BE AN ADDITIONAL
VESSEL
To: Fortis Bank (Nederland) N.V. as Facility Agent
From: [Borrower]
US$800,000,000 FACILITY AGREEMENT DATED , 2007 (the FACILITY AGREEMENT)
1. Terms defined in the Facility Agreement have the same meaning in this
Certificate.
2. We refer to Clause 3.1(a) (Conditions precedent) of the Facility
Agreement. This is an EBITDA to Debt Service Compliance Certificate in
respect of the following Other Vessel (the VESSEL):
(a) Vessel Name: [ ]
(b) TEU: [ ]
3. I/We hereby certify that as of [ ] the EBITDA to Debt Service Ratio for
the period from the date of this Certificate until the Final Maturity Date
on a forward looking basis is not less than 1.10 to 1.
[ ]
Yours faithfully,
[...........................]
Chief Executive Officer
[or]
................................
Chief Financial Officer
117
PART 2
COMPLIANCE CERTIFICATE FOR DETERMINATION OF ACCEPTABLE CHARTER
To: Fortis Bank (Nederland) N.V. as Facility Agent
From: [Borrower]
US$800,000,000 FACILITY AGREEMENT DATED , 2007 (the FACILITY AGREEMENT)
1. Terms defined in the Facility Agreement have the same meaning in this
Certificate.
2. We refer to the definition of Acceptable Charter of the Facility
Agreement. This is an EBITDA to Debt Service Compliance Certificate in
respect of the following [Identified Vessel] [Additional Vessel] (the
VESSEL):
(a) Vessel Name: [ ]
(b) TEU: [ ]
(c) Charterer: [ ]
(d) Charter Term: [ ]
(e) Rate of Charter Hire: [ ]
3. I/We hereby certify that as of [ ] the EBITDA to Debt Service Ratio for
the period from the date of this Certificate until the Termination Date of
the Acceptable Charter on a forward looking basis is not less than 1.10 to
1.
[ ]
Yours faithfully,
[...........................]
Chief Executive Officer
[or]
................................
Chief Financial Officer
118
PART 3
COMPLIANCE CERTIFICATE FOR DETERMINATION UNDER THE BORROWING BASE
To: Fortis Bank (Nederland) N.V. as Facility Agent
From: [Borrower]
US$800,000,000 FACILITY AGREEMENT DATED , 2007 (the FACILITY AGREEMENT)
1. Terms defined in the Facility Agreement have the same meaning in this
Certificate.
2. We refer to the Clause 3.4 (Borrowing Base) of the Facility Agreement.
This is an EBITDA to Debt Service Compliance Certificate in respect of the
following [Additional Vessel] (the VESSEL):
(a) Vessel Name: [ ]
(b) TEU: [ ]
(c) Charterer: [ ]
(d) Charter Term: [ ]
(e) Rate of Charter Hire: [ ]
3. I/We hereby certify that as of [ ] the EBITDA to Debt Service Ratio for
the period from the date of this Certificate until the Final Maturity Date
on a forward looking basis is not less than 1.10 to 1.
[ ]
Yours faithfully,
[...........................]
Chief Executive Officer
[or]
................................
Chief Financial Officer
119
SCHEDULE 9
ACCEPTABLE CHARTERERS
120
SCHEDULE 10
APPROVED FLAG STATES
121
SCHEDULE 11
FORM OF BORROWER ACCESSION AGREEMENT
To: [FACILITY AGENT] as the FACILITY AGENT
From: [PROPOSED NEW PARTY]
Date: [ ]
GLOBAL SHIP LEASE INC - CREDIT AGREEMENT DATED [ ] (THE AGREEMENT)
We refer to the Agreement. This deed is a Borrower Accession Agreement.
We, [name of new Party] of [address/registered office],[Cyprus/▇▇▇▇▇▇▇▇
Islands/United Kingdom], agree to be a Borrower under the Agreement and to enter
into such Finance Documents as are necessary to provide security over the Vessel
and to be bound by the terms of the Agreement and the Finance Documents as a
Borrower. We confirm that the representations set out in Clause 14 of the
Agreement (where relevant) are true and correct as at the date of this Borrower
Accession Agreement.
Our contact details are as follows:
[
].
We irrevocably appoint:
[ ]
to act as agent for service of process in any proceedings before the English
courts.
This deed is intended to be executed as a deed and is governed by English law.
EXECUTED as a DEED by )
[PROPOSED NEW PARTY] )
acting by )
and )
acting under the )
authority of [PROPOSED NEW PARTY] )
in the presence of: )
Witness' signature:..............................
Name: ...........................
Address:
122
APPENDIX 1
FORM OF GENERAL ASSIGNMENT
123
APPENDIX 2
FORM OF DPP
124
APPENDIX 3
FORM OF SWAP AGREEMENT ASSIGNMENT
125
APPENDIX 4
FORM OF MANAGER'S UNDERTAKING
126
APPENDIX 5
FORM OF RETENTION ACCOUNT CHARGE
127
APPENDIX 6
FORM OF EARNINGS ACCOUNT AND OPERATING ACCOUNT CHARGE
128
APPENDIX 7
FORM OF MORTGAGE
PART 1
FORM OF CYPRIOT MORTGAGE
PART 2
FORM OF PANAMANIAN MORTGAGE
129
APPENDIX 8
PLEDGE OF SHARES
PART 1
FORM OF CYPRIOT PLEDGE
PART 2
FORM OF ▇▇▇▇▇▇▇▇ ISLANDS PLEDGE
130
SIGNATORIES
REPRESENTATIVE BORROWER
GLOBAL SHIP LEASE INC
By:
ORIGINAL BORROWERS
GLOBAL SHIP LEASE 1 LIMITED
By:
GLOBAL SHIP LEASE 2 LIMITED
By:
GLOBAL SHIP LEASE 3 LIMITED
By:
GLOBAL SHIP LEASE 4 LIMITED
By:
GLOBAL SHIP LEASE 5 LIMITED
By:
GLOBAL SHIP LEASE 6 LIMITED
By:
GLOBAL SHIP LEASE 7 LIMITED
By:
131
GLOBAL SHIP LEASE 8 LIMITED
By:
GLOBAL SHIP LEASE 9 LIMITED
By:
GLOBAL SHIP LEASE 10 LIMITED
By:
GSL ALCAZAR INC
By:
GSL CHATEAU D'IF INC
By:
ORIGINAL LENDERS
[ ]
By:
[ ]
By:
[ ]
By:
[ ]
BY:
132
[ ]
BY:
[ ]
BY:
THE MANDATED LEAD ARRANGERS
FORTIS BANK (NEDERLAND) N.V.
By:
CITIGROUP GLOBAL MARKETS LIMITED
By:
HSH NORDBANK AG
By:
SUMITOTMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH
By:
DNB NOR BANK ASA
By:
THE FACILITY AGENT
FORTIS BANK (NEDERLAND) N.V.
By:
133
134