JUNIOR FACILITY AGREEMENT
between
PACIFIC TANKSHIP LTD.,
as borrower
CHRISTIANIA BANK OG KREDITKASSE ASA
as agent and security trustee
and
CHRISTIANIA BANK OG KREDITKASSE ASA
as lender
▇▇▇▇▇▇▇▇ Chance
London
CONTENTS
CLAUSE PAGE
1. Interpretation ........................................................ 1
2. The Facility .......................................................... 8
3. Purpose ............................................................... 8
4. Conditions Precedent .................................................. 8
5. Nature of Banks' Rights and Obligations ............................... 8
6. Availability .......................................................... 9
7. Interest Periods ...................................................... 10
8. Interest .............................................................. 10
9. Repayment and Prepayment .............................................. 11
10. Taxes and Tax Receipts ................................................ 12
11. Changes in Circumstances .............................................. 13
12. Representations ....................................................... 15
13. Information Covenants ................................................. 18
14. Financial Condition ................................................... 19
15. General Covenants ..................................................... 20
16. Events of Default ..................................................... 21
17. Default Interest and Indemnity ........................................ 25
18. Currency of Account and Payment ....................................... 27
19. Payments .............................................................. 27
20. Set-Off ............................................................... 27
21. Sharing ............................................................... 28
22. Fees .................................................................. 29
23. Costs and Expenses .................................................... 29
24. The Agent and the Banks ............................................... 30
25. Benefit of Agreement .................................................. 34
26. Assignments and Transfers ............................................. 34
27. Calculations and Evidence of Debt ..................................... 35
28. Remedies and Waivers .................................................. 36
29. Partial Invalidity .................................................... 36
30. Notices ............................................................... 36
31. Law ................................................................... 37
32. Jurisdiction .......................................................... 37
The First Schedule
Condition Precedent Documents ......................................... 39
The Second Schedule
Notice of Drawdown .................................................... 43
The Third Schedule
Form of Transfer Certificate .......................................... 44
THIS AGREEMENT is made on 27 October 1997
BETWEEN:
(1) PACIFIC TANKSHIP LTD., (the "BORROWER");
(2) CHRISTIANIA BANK OG KREDITKASSE ASA (in its capacity as agent, the
"AGENT");
(3) CHRISTIANIA BANK OG KREDITKASSE ASA (in its capacity as the security
trustee, the "SECURITY Trustee"); and
(4) CHRISTIANIA BANK OG KREDITKASSE ASA ("INITIAL BANK").
RECITALS
A. The Initial Bank has agreed to grant to the Borrower, upon the terms
and subject to the conditions herein set forth, a loan facility in the
amount of up to $4,500,000.
B. By a further Loan Agreement (the "SENIOR FACILITY AGREEMENT") of even
date herewith and made between the Borrower, the Agent, the Security
Trustee and the Initial Bank as defined therein the Initial Bank has
agreed to lend to the Borrower a further sum of up to $18,000,000
secured by first ranking security over the assets mortgaged or charged
by the Borrower to the Security Trustee pursuant to the Facility
Documents defined therein.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"ADMINISTRATIVE GENERAL PARTNER" means GMC Administration Ltd., a
company duly incorporated under the laws of the Cayman Islands.
"ADVANCE" means, save as otherwise provided herein, the advance made or
to be made by the Banks hereunder;
"ASSIGNMENT OF ACCOUNTS" MEANS THE ASSIGNMENT OF THE BORROWER'S BANK
ACCOUNTS TO BE EXECUTED BY THE BORROWER IN FAVOUR OF THE SECURITY
TRUSTEE PURSUANT TO PARAGRAPH 17, OF PART 1 OF THE FIRST SCHEDULE;
"ASSIGNMENT OF EARNINGS AND INSURANCES" means an assignment of earnings
and insurances to be entered into by the Borrower in favour of the
Security Trustee pursuant to paragraph 2, Part 2 of the First Schedule;
"BANKS" means the Initial Bank and any Transferees of the Initial Bank
(and any subsequent Transferees) and "BANK" means each of the Banks;
"BASLE PAPER" means the paper entitled "International Convergence of
Capital Measurement
and Capital Standards" dated July 1988 and prepared by the Basle
Committee on Banking Regulations and Supervision, as amended in
November 1991;
"BORROWER DEPOSIT ACCOUNT" means the account held in the name of the
Borrower with The Industrial Bank of Japan, Ltd., Japan;
"CAPITAL ADEQUACY REQUIREMENT" means a request or requirement relating
to the maintenance of capital, including one which makes any change to,
or is based on any alteration in, the interpretation of the Basle Paper
or which increases the amounts of capital required thereunder, other
than a request or requirement made by way of implementation of the
Basle Paper in the manner in which it is being implemented at the date
hereof;
"CHARTERS" means each of the Initial Charter and the Subsequent Charter
and "CHARTER" means each of them;
"CHARTERERS" means each of the Initial Charterer and the Subsequent
Charterer and "CHARTERER" means each of them;
"DRAWDOWN DATE" means the date on which the Advance is made to the
Borrower hereunder;
"EARNINGS ACCOUNT" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"EVENT OF DEFAULT" means any of those events specified in Clause 16.1
(EVENTS OF DEFAULT);
"FACILITY" means the dollar loan facility granted to the Borrower in
this Agreement;
"FACILITY AMOUNT" means an amount of up to US$2,500,000 to be advanced
by the Initial Bank to the Borrower;
"FACILITY OFFICE" means in relation to a Bank, the Agent or the
Security Trustee the office identified with the signature below (or in
the case of a Transferee, at the end of the Transfer Certificate to
which it is a party as Transferee) or such other office as it may from
time to time select;
"FAIR MARKET VALUE" means, in relation to the Vessel at any time, the
sale value of the Vessel in dollars determined on the basis of a sale
(for cash and prompt delivery) by a willing seller to a willing buyer,
free of charter and encumbrances and at arm's length on normal
commercial terms;
"FINAL REPAYMENT DATE" means the date which falls 66 months after the
Drawdown Date;
"FACILITY DOCUMENTS" means this Agreement, the Guarantee, the Interest
Rate Swap Agreement, the Trust Deed, the Mortgage, the Assignment of
Earnings and Insurances, the Priority Agreement and the Assignment of
Accounts and any other document agreed between the Agent and the
Borrower to be a Facility Document and "FACILITY DOCUMENT" means each
of them;
"GENERAL PARTNERS" means the Managing General Partner and the
Administrative General Partner and "GENERAL PARTNER" means each of
them;
"GUARANTEE" means the guarantee to be executed by the Guarantor in
favour of the Agent on behalf of the Initial Bank pursuant to paragraph
11, of Part 1 of the First Schedule;
"GUARANTOR" means Maritime Equity Management Ltd., a New York
corporation;
"INITIAL CHARTER" means the bareboat charter party (as from time to
time amended or novated) dated 6 October 1997 whereby the Initial
Charterer has agreed to charter the Vessel on a bareboat charter basis
from the Borrower for a period of approximately six months from the
Drawdown Date;
"INITIAL CHARTERER" means ▇▇▇▇▇▇ Lines S.A., a corporation duly
incorporated under the laws of the Panama;
"INSTRUCTING GROUP" means a Bank or group of Banks to whom in aggregate
more than fifty per cent of the Loan is (or, immediately prior to its
repayment, was then) owed;
"INTEREST RATE SWAP AGREEMENT" means the International Swap Dealers
Association, Inc. Master Agreement together with a confirmation letter
both dated on or about the date hereof entered into by the Borrower and
the Initial Bank as Swap Counterparty (as from time to time amended,
supplemented or extended by the parties thereunder) pursuant to which
the Borrower will hedge all or part of its interest costs under this
Agreement;
"INTEREST PERIOD" means any of those periods mentioned in Clause 7.2
(DURATION OF INTEREST PERIODS);
"LIBOR" means, in relation to any period for which an interest rate is
to be determined hereunder, the rate per annum determined by the Agent
to be equal to the LIBOR fixing on Telerate page 3740 for deposits in
dollars for a period corresponding to that period at 11.00 a.m. on the
Quotation Date for that period Provided that if there are no such rates
so appearing on such page at such time it means the rate per annum
determined by the Agent to be equal to the arithmetic mean (rounded
upwards, if not already such a multiple to the nearest whole multiple
of one-sixteenth of one per cent.) of the respective rates (as notified
to the Agent) at which the Reference Banks were offering to prime banks
in the London Interbank Market deposits in dollars for a period
corresponding to such period at such time;
"LOAN" means the aggregate principal amount for the time being
outstanding hereunder;
"MANAGEMENT AGREEMENT" means the agreement (as from time to time
amended or novated) to be entered or entered into between the Borrower
and Universe Tankships (Bermuda) Ltd. relating to the management of the
Vessel pursuant to paragraph 13, Part 1, of the First Schedule;
"MANAGING GENERAL PARTNER" means Genmar Pacific Ltd., a corporation
duly incorporated under the laws of the State of New York, USA;
"MARGIN" means three per cent. (3%) per annum;
"MEMORANDUM OF AGREEMENT" means the agreement (as from time to time
amended or novated) for the purchase and sale of the Vessel dated 6
October 1997 and made between the Borrower and the Seller;
"MORTGAGE" means a first preferred Panamanian ship mortgage over the
Vessel to be granted by the Borrower to the Security Trustee pursuant
to paragraph 1, Part 2 of the First Schedule;
"NOTICE OF DRAWDOWN" means a notice in the form or substantially the
form of that set out in the Second Schedule;
"PANAMA" means Republic of Panama;
"PERMITTED LIENS" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"PRIORITY AGREEMENT" means the agreement between the Agent, the Banks,
the Borrower and the agent and the lenders under the Senior Facility
Agreement regulating the priorities and the rights of enforcement of
security between the Banks and the lenders under the Senior Facility
Agreement pursuant to paragraph 19, Part 1 of the First Schedule;
"QUOTATION DATE" in relation to any period for which an interest rate
is to be determined hereunder means the day on which quotations would
ordinarily be given by prime banks in the London Interbank Market for
dollar deposits for delivery on the first day of that period Provided
that if, for any such period, quotations would ordinarily be given on
more than one date, the Quotation Date for that period shall be the
last of those dates;
"REFERENCE BANK" means the principal Oslo office of Christiania Bank og
Kreditkasse ASA and such other banks as may from time to time be agreed
between the Borrower and the Agent;
"RETENTION ACCOUNT" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"SELLER" means ▇▇▇▇▇▇ Lines S.A. Panama;
"SHAREHOLDER" means Pacific Tankship, L.P., the sole shareholder of the
Borrower;
"SUBSEQUENT CHARTER" means the time charter (as from time to time
amended or novated) dated as of 17 October 1997 whereby the Subsequent
Charterer has agreed to charter the Vessel from the Borrower for a
minimum of sixty months immediately upon the termination of the Initial
Charter;
"SUBSEQUENT CHARTERER" means American Eagle Tankers Inc. Limited;
"TERMINATION DATE" means the earlier of 31 December 1997 and the date
on which the
Facility Amount has been reduced to zero;
"TRANSFER CERTIFICATE" means a certificate in the form set out in the
Third Schedule (or such other form as may be agreed between the
relevant Bank, the proposed Transferee, the Agent and the Borrower
pursuant to Clause 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS)) signed by
a Bank and a Transferee whereby:
(i) such Bank seeks to procure the transfer to such
Transferee of all or a part of such Bank's rights and
obligations hereunder upon and subject to the terms
and conditions set out in Clause 26.2 (ASSIGNMENTS
AND TRANSFERS BY BANKS); and
(ii) such Transferee undertakes to perform the obligations
it will assume as a result of delivery of such
certificate to the Borrower as is contemplated in
Clause 26.4 (TRANSFERS BY BANKS)
"TRANSFER DATE" in relation to any Transfer Certificate means the date
for the making of the transfer as specified in the schedule to such
Transfer Certificate;
"TRANSFEREE" means a bank or other financial institution to which a
Bank seeks to transfer all or part of such Bank's rights and
obligations hereunder;
"TRUST DEED" means a security trust deed of the date hereof entered
into between the Security Trustee, the Agent, the Borrower and the
Banks and the agent and lenders under the Senior Facility Agreement
pursuant to paragraph 18, Part 1 of the First Schedule;
"VESSEL" means the vessel known as m/t "PACIFIC JUPITER", more
particularly described in the Mortgage.
1.2 Any reference in this Agreement to:
the Agent, the Security Trustee, or the Banks shall be construed so as
to include their respective successors, Transferees and permitted
assigns in accordance with their respective interests;
a "BUSINESS DAY" shall be construed as a reference to a day (other than
a Saturday or Sunday) on which banks are generally open for business in
Oslo, London and New York City;
a "CHARTER" shall be construed as a reference to any agreement
(including the Charters) pursuant to which the Vessel is, or will be,
employed;
a "CLAUSE" shall, subject to any contrary indication, be construed as a
reference to a clause hereof;
an "ENCUMBRANCE" shall be construed as a reference to a mortgage,
charge, pledge, lien or other encumbrance securing any obligation of
any person or any other type of preferential arrangement (including,
without limitation, title transfer and retention arrangements) having a
similar effect;
the "EQUIVALENT" in one currency (in this paragraph the "FIRST
CURRENCY") of an amount denominated in another currency (in this
paragraph the "SECOND CURRENCY") on any date shall, save as otherwise
provided, be construed as a reference to the amount of the first
currency which could be purchased with that amount of the second
currency at the spot rate of exchange quoted by the Agent at or about
11.00 a.m. on such date for the purchase of the first currency with the
second currency for delivery on the second business day thereafter;
a "GUARANTEE" includes any guarantee, indemnity or other obligation to
pay, purchase, provide funds for the payment of or indemnify against
the consequences of default in the payment of indebtedness of any other
person and any encumbrance which secures the payment of any
indebtedness of any other person;
a "HOLDING COMPANY" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned
company or corporation is a subsidiary;
"INDEBTEDNESS" shall be construed so as to include any obligation
(whether incurred as principal or as surety) for the payment or
repayment of money, whether present or future, actual or contingent;
a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month save that, where any such period would otherwise end on
a day which is not a business day, it shall end on the next business
day, unless that day falls in the calendar month succeeding that in
which it would otherwise have ended, in which case it shall end on the
preceding business day Provided that, if a period starts on the last
business day in a calendar month or if there is no numerically
corresponding day in the month in which that period ends, that period
shall end on the last business day in that later month (and references
to "MONTHS" shall be construed accordingly);
a "PERSON" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
a "SCHEDULE" shall, subject to any contrary indication, be construed as
a reference to a schedule hereto;
a "SUBSIDIARY" of a company or corporation shall be construed as a
reference to any company or corporation:
(i) which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
(ii) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the
first-mentioned company or corporation; or
(iii) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation
and, for these purposes, a company or corporation shall be treated as
being controlled by another if that other company or corporation is
able to direct its affairs and/or to control the composition of its
board of directors or equivalent body;
"TAX" shall be construed so as to include any present or future tax,
levy, impost, duty or other charge 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);
"TOTAL LOSS" includes any actual, constructive, arranged, agreed or
compromised total loss, any requisitioning for title and the capture,
seizure, arrest, detention, or confiscation of the Vessel by any
government, or by persons purporting to act on behalf of any
government, unless the Vessel be released and restored to the Owner
from such capture, seizure, detention or confiscation within one month
after the date thereof; and
the "WINDING-UP" or "DISSOLUTION" of a company or limited partnership
shall be construed so as to include any equivalent or analogous
proceedings under the law of the jurisdiction in which such company or
limited partnership is incorporated or established or any jurisdiction
in which such company or limited partnership carries on business.
1.3 "$" and "DOLLARS" denote lawful currency of the United States of
America.
1.4 Save where the contrary is indicated, any reference in this Agreement
to:
(i) this Agreement or any other agreement or document
shall be construed as a reference to this Agreement
or, as the case may be, such other agreement or
document as the same may have been, or may from time
to time be, amended, varied or supplemented;
(ii) a statute shall be construed as a reference to such
statute as the same may have been, or may from time
to time be, amended or re-enacted; and
(iii) a time of day shall be construed as a reference to
London time.
1.5 Clause headings are for ease of reference only.
1.6 For the purposes of the Facility Documents, a total loss of the Vessel
shall be deemed to have occurred:
(i) if it consists of an actual total loss, at noon
Greenwich Mean Time on the actual date of loss or, if
that is not known, on the date on which she was last
heard of;
(ii) if it consists of a requisitioning for title, at noon
Greenwich Mean Time on the date on which the same is
expressed to take effect by the person making the
same; and
(iii) if it consists of a constructive or compromised or
arranged or agreed total loss, at noon Greenwich Mean
Time on the date at which notice of her
abandonment is given to her insurers for the time
being or (if her insurers for the time being do not
admit the claim for total loss) at the time on which
a total loss is subsequently adjudged to have
occurred by a competent court or arbitration tribunal
or liability in respect thereof as a total loss is
admitted by underwriters.
2. THE FACILITY
The Initial Bank hereby grants to the Borrower, upon the terms and
subject to the conditions hereof, a loan facility in the maximum amount
of $4,500,000.
3. PURPOSE
The purpose of the Facility is to provide the Borrower with funds to
finance the purchase of the Vessel and, accordingly, the Borrower shall
apply all of the amounts raised by it hereunder in or towards such
purpose (but so that neither the Agent nor the Initial Bank shall be
obliged to concern itself with the application of amounts borrowed by
the Borrower hereunder).
4. CONDITIONS PRECEDENT
The Borrower shall not be entitled to give any Notice of Drawdown
hereunder unless the Agent shall have confirmed to the Borrower by
facsimile or letter that it has received three days prior to the
proposed Drawdown Date each of the documents specified in Part 1 of the
First Schedule and found the same to be satisfactory to it in form and
substance.
5. NATURE OF BANKS' RIGHTS AND OBLIGATIONS
5.1 OBLIGATIONS OF BANKS SEVERAL
The obligations of each Bank hereunder are several.
5.2 FAILURE OF ANY BANK TO PERFORM OBLIGATIONS
The failure by a Bank to perform its obligations hereunder shall not
affect the obligations of the Borrower towards any other party hereto
nor shall any other party be liable for the failure by such Bank to
perform its obligations hereunder.
5.3 RIGHTS OF BANKS SEVERAL
The rights of the Banks hereunder are also several. The amount at any
time owing by the Borrower to any party under this Agreement shall be a
separate and independent debt from any amount owing to any other party.
6. AVAILABILITY
6.1 THE FACILITY
The Facility shall be made by the Initial Bank to the Borrower by way
of a single Advance.
It is hereby agreed that on the Drawdown Date, the Advance shall be
paid into the Borrower Deposit Account and shall be held in escrow in
the Borrower Deposit Account until its release therefrom in accordance
with the provisions of the Memorandum of Agreement;
6.2 DRAWDOWN CONDITIONS
Save as otherwise provided herein, the Advance will be made by the
Initial Bank and paid into the Borrower Deposit Account, on the request
of the Borrower if:
(i) not more than ten nor less than two business days
before the proposed date for the making of the
Advance the Agent has received from the Borrower a
Notice of Drawdown therefor, receipt of which shall
oblige the Borrower to borrow the amount therein
requested on the date therein stated upon the terms
and subject to the conditions contained herein;
(ii) the aggregate sum of the amount stated in the Notice
of Drawdown and the amount drawn down or to be drawn
down under the Senior Facility Agreement shall not
exceed 75% of the Fair Market Value of the Vessel as
determined in accordance to Clause 14.1 (FAIR MARKET
VALUE OF VESSEL);
(iii) the Drawdown Date is a business day which is or
precedes the Termination Date;
(iv) the interest rate applicable to the Advance during
its first Interest Period does not fall to be
determined pursuant to the proviso to Clause 7.2
(DURATION OF INTEREST PERIODS); and
(v) (a) no event has occurred which is or may become
(with the passage of time, the giving of
notice, the making of any determination
hereunder or any combination thereof) an
Event of Default; and
(b) the representations set out in Clause 12
(REPRESENTATIONS) are true on and as of the
proposed date for the making of such Advance
or the Agent agrees (notwithstanding any matter mentioned at
(a) or (b) above) that the Advance should be made and paid
into the Borrower Deposit Account.
6.3 RELEASE CONDITION
The Borrower hereby covenants that prior to the release of the Advance
held in the Borrower Deposit Account to the Seller it will deliver to
the Agent each of the documents specified in Part 2 of the First
Schedule and in both form and substance satisfactory to the Agent.
7. INTEREST PERIODS
7.1 INTEREST PERIODS
The period for which the Advance is outstanding shall be divided into
successive periods each of which (other than the first) shall start on
the last day of the preceding such period.
7.2 DURATION OF INTEREST PERIODS
The duration of each Interest Period relating to the Advance shall,
save as otherwise provided herein, be one, three, six or twelve months,
or any such other period as may be agreed from time to time between the
Borrower and the Agent, in each case as the Borrower may select by not
less than three business days' prior notice to the Agent Provided that:
(i) if the Borrower selects a duration of twelve months
in relation to an Interest Period, then:
(a) the Borrower may, at the same time, notify
the Agent of an alternative selection of
three or six months to apply if the
Borrower's selection becomes ineffective
pursuant to (b) below; and
(b) any Bank may, at any time before 9.00 a.m.
on the second business day preceding the
first day of such Interest Period, notify
the Agent that it objects to the Borrower's
selection, whereupon such selection shall
become ineffective Provided that no such
objection shall be given except for reason
of the non availability to such Bank of
dollars for twelve months interest periods
in the London Inter-bank Market;
(ii) if the Borrower fails to give such notice of its
selection in relation to an Interest Period, or if
its selection becomes ineffective under (i)(b) above
and the Borrower has failed to give the Agent any
permitted alternative selection pursuant to (i)(a)
above, then the duration of that Interest Period
shall, subject to (iii) below, be three months;
(iii) the Borrower may not select an Interest Period of one
month more than three times during any calendar year;
and
(iv) any Interest Period which would otherwise end during
the month preceding, or extend beyond, the Final
Repayment Date shall be of such duration that it
shall end on the Final Repayment Date.
8. INTEREST
8.1 PAYMENT OF INTEREST
On the last day of each Interest Period (and, in the case of an
Interest Period of a duration of more than three months, on the last
day of each successive period of three months falling within such
Interest Period) the Borrower shall pay accrued interest on the Advance
to which such Interest Period relates.
8.2 CALCULATION OF INTEREST
The rate of interest applicable to the Advance from time to time during
an Interest Period relating thereto shall be the rate per annum which
is the sum of the Margin and LIBOR for such Interest Period Provided
that if LIBOR for an Interest Period falls to be determined in
accordance with the proviso to the definition thereof but none of the
Reference Banks was offering to prime banks in the London Interbank
Market dollar deposits for the proposed duration of such Interest
Period, the rate of interest applicable to the Advance to which such
Interest Period relates from time to time during such Interest Period
shall be the rate per annum which is the sum of the Margin and the
weighted average of the rates per annum notified to the Agent by each
Bank before the last day of such Interest Period to be that which
expresses as a percentage rate per annum the cost to it of funding such
Advance during such Interest Period from whatever sources it may select
and the Agent shall notify the Borrower accordingly.
9. REPAYMENT AND PREPAYMENT
9.1 REPAYMENT
The Borrower shall repay the Loan in full on the Final Repayment Date.
9.2 PREPAYMENT
The Borrower may, if it has given to the Agent not less than fifteen
(15) business days' prior notice to that effect, prepay the whole or
any part of the Advance (but if in part being an amount or integral
multiple of $100,000) on the last day of an Interest Period relating
thereto. Any prepayment made by the Borrower shall satisfy the
Borrower's remaining obligations under Clause 9.1 (REPAYMENT) in
inverse order of maturity.
9.3 NOTICE OF PREPAYMENT
Any notice of prepayment given by the Borrower pursuant to Clause 9.2
(PREPAYMENT) shall be irrevocable and shall specify the date upon which
such prepayment is to be made and the amount thereof and shall oblige
the Borrower to make such prepayment on such date.
9.4 PREPAYMENT FEE
If the Borrower makes any prepayment pursuant to Clause 9.2
(PREPAYMENT), the Borrower
shall be obliged, together with such prepayment, to pay a prepayment
fee. The prepayment fee shall equal to:-
(a) for any prepayments made within 12 months of the Drawdown
Date, 7% of the amounts so prepaid;
(b) for any prepayments made in the period beginning 12 months and
ending 24 months from Drawdown Date, 5.5% of the amounts so
prepaid;
(c) for any prepayments made in the period beginning 24 months and
ending 36 months from Drawdown Date, 4.0% of the amounts so
prepaid;
(d) for any prepayments made in the period beginning 36 months and
ending 48 months from Drawdown Date, 2.5% of the amounts so
prepaid;
(e) for any prepayments made during the 12 months preceding the
Final Repayment Date, 1% of the amounts so prepaid.
Provided that no such fee shall be payable if such prepayment was made
pursuant to a refinancing of the Loan granted by the Initial Bank or by
a syndicate of banks of which the Initial Bank is an agent or an
underwriter.
9.5 INTEREST RATE SWAP AGREEMENTS
If the Borrower makes any prepayment pursuant to Clause 9.2, it shall
be obliged to pay to the Initial Bank as counterparty to the Interest
Rate Swap Agreement (or the Initial Bank shall pay to the Agent for
account of the Borrower) the amount of any loss (or, as the case may
be, profit) incurred or made by the Initial Bank as a result of a total
or partial early termination of the Interest Rate Swap Agreement made
to ensure that the notional principal amount of the Interest Rate Swap
Agreement matches the reduced amount of the Loan.
9.6 NO OTHER REPAYMENTS OR REBORROWING
No amount repaid or prepaid hereunder may be reborrowed.
10. TAXES AND TAX RECEIPTS
10.1 TAX GROSS-UP
All payments to be made by the Borrower to any person under any of the
Facility Documents to which it is a party shall be made free and clear
of and without deduction for or on account of tax unless the Borrower
is required to make such a payment subject to the deduction or
withholding of tax, in which case the sum payable by the Borrower in
respect of which such deduction or withholding is required to be made
shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives and
retains (free from any liability in respect of any such deduction or
withholding) a net sum equal to the sum which it would have received
and so retained had no such deduction or withholding been made or
required to be made.
10.2 TAX INDEMNITY
Without prejudice to the provisions of Clause 10.1 (TAX GROSS-UP), if
any person or the Agent on its behalf is required to make any payment
on account of tax or otherwise (not being a tax imposed on the net
income of the Facility Office by the jurisdiction in which it is
incorporated or in which the Facility Office is located) on or in
relation to any sum received or receivable by such person under any of
the Facility Documents (including, without limitation, any sum received
or receivable under this Clause 10) or any liability in respect of any
such payment is asserted, imposed, levied or assessed against the such
person, the Borrower shall, upon demand of the Agent, promptly
indemnify the such person against such payment or liability, together
with any interest, penalties and expenses payable or incurred in
connection therewith Provided that if a Bank or the Agent or the
Security Trustee considers that it is reasonable to do so and that it
would not be otherwise prejudiced thereby, it will, prior to
instructing the Agent to make a demand under this Clause 10.2, use
reasonable endeavours to determine whether any such payment or
liability was correctly or legally imposed or asserted.
10.3 CLAIMS BY A BANK
If a Bank intends to make a claim pursuant to Clause 10.2 (TAX
INDEMNITY) it shall notify the Agent of the event by reason of which it
is entitled to do so whereupon the Agent shall notify the Borrower
accordingly.
10.4 NOTIFICATION OF REQUIREMENT TO DEDUCT TAX
If, at any time, the Borrower is required by law to make any deduction
or withholding from any sum payable by it under any of the Facility
Documents to which it is a party (or if thereafter there is any change
in the rates at which or the manner in which such deductions or
withholdings are calculated), the Borrower shall promptly notify the
Agent, whereupon the Agent shall notify the Banks and the Security
Trustee accordingly.
10.5 EVIDENCE OF PAYMENT OF TAX
If the Borrower makes any payment under any of the Facility Documents
to which it is a party in respect of which it is required to make any
deduction or withholding, it shall pay the full amount required to be
deducted or withheld to the relevant taxation or other authority within
the time allowed for such payment under applicable law and shall
deliver to the Agent, within thirty days after it has received the
same, an original receipt (or a certified copy thereof) issued by such
authority evidencing the payment to such authority of all amounts so
required to be deducted or withheld in respect of such payment.
11. CHANGES IN CIRCUMSTANCES
11.1 INCREASED COSTS
If, by reason of (a) any change in law or in its interpretation or
administration and/or (b) compliance with any Capital Adequacy
Requirement or any request from or requirement of any central bank or
other fiscal, monetary or other authority:
(i) a Bank or any holding company of such Bank incurs a
cost as a result of such Bank having entered into
and/or performing its obligations under this
Agreement and/or assuming or maintaining a commitment
under this Agreement and/or making its advance
hereunder;
(ii) a Bank or any holding company of such Bank is unable
to obtain the rate of return on its overall capital
which it would have been able to obtain but for such
Bank having entered into and/or performing its
obligations and/or assuming or maintaining a
commitment under this Agreement;
(iii) there is any increase in the cost to a Bank or any
holding company of such Bank of funding or
maintaining all or any of the advances comprised in a
class of advances formed by or including the advance
made or to be made by such Bank hereunder; or
(iv) a Bank or any holding company of such Bank becomes
liable to make any payment on account of tax or
otherwise (not being a tax imposed on the net income
of the Facility Office by the jurisdiction in which
such Bank is incorporated or in which the Facility
Office is located) on or calculated by reference to
the amount of the Advance made or to be made
hereunder and/or by reference to any sum received or
receivable by such Bank hereunder,
then the Borrower shall, from time to time on demand of the Agent,
promptly pay to the Agent for the account of such Bank amounts
sufficient to indemnify it (or,as the case may be, to enable it to
indemnify its holding company) against, as the case may be, (1) such
cost, (2) such reduction in such rate of return (or such proportion of
such reduction as is, in the opinion of such Bank, attributable to its
obligations hereunder), (3) such increased cost (or such proportion of
such increased cost as is, in the opinion of such Bank, attributable to
its funding or maintaining its advance hereunder) or (4) such
liability.
11.2 INCREASED COSTS CLAIMS
If a Bank intends to make a claim pursuant to Clause 11.1 (INCREASED
COSTS) it shall notify the Agent of the event by reason of which it is
entitled to do so whereupon the Agent shall notify the Borrower
accordingly.
11.3 ILLEGALITY
If at any time it is unlawful for a Bank to make its portion of the
Advance or to fund or allow to remain outstanding its portion of the
Loan, then that Bank shall, promptly after becoming aware of such fact,
deliver to the Agent who will deliver to the Borrower a certificate to
that effect whereupon:
(i) if no Advance has been made hereunder, the Bank shall
not thereafter be obliged to make the Advance
hereunder and its Facility Commitment shall be
reduced to zero; and
(ii) if the Advance has already been made hereunder, then,
if the Agent on behalf of any relevant Bank so
requires, the Borrower shall on such date as the
Agent shall have specified repay such Bank's portion
of the Loan in full together with accrued interest
thereon.
11.4 MITIGATION
(a) If circumstances arise which would (or would upon the giving
of notice) result in:
(i) the reduction of a Bank's portion of the
Loan pursuant to Clause 11.3 (ILLEGALITY);
(ii) the prepayment of the Loan pursuant to
Clause 11.3 (ILLEGALITY);
(iii) an increase in the amount of any payment
pursuant to Clause 10.1 (TAX GROSS-UP); or
(iv) a claim by a Bank for indemnification
pursuant to Clause 10.2 (TAX INDEMNITY) or a
claim by a Bank for indemnification pursuant
to Clause 11.1 (INCREASED COSTS),
then, without in any way limiting, reducing or otherwise
qualifying the obligations of the Borrower under any of the
Clauses referred to above, such Bank shall, in consultation
with the Agent and the Borrower, take such reasonable steps as
may be reasonably open to it to mitigate the effects of such
circumstances, including by transferring its Facility Office
to another jurisdiction or by assigning its rights hereunder
to another financial institution approved by the Borrower
Provided that such Bank shall have no obligation to transfer
its Facility Office or assign its rights hereunder as
aforesaid if it is of the opinion that to do so would or might
have an adverse effect on its business, operations or
financial condition.
(b) If circumstances arise which would result in the Security
Trustee being entitled pursuant to Clause 4.5 of the Trust
Deed to exercise its rights to make deductions and
withholdings from payments made to the Agent hereunder, the
Security Trustee shall, in consultation with the Borrower,
take such reasonable steps as may be reasonably open to it to
mitigate the effects of such circumstances Provided that the
Security
Trustee shall have no obligation to do so if it is of the opinion that
to do so would or might have an adverse effect on its business
operations or financial condition.
12. REPRESENTATIONS
12.1 Subject to any reservations and/or qualifications as to matters of law
which may be made in the legal opinions referred to in paragraphs 3, 4,
5, 6 and 7 of Part 1 of the First Schedule, the Borrower represents
that:
(i) STATUS It is a limited liability company duly
organised under the laws of the Cayman Islands with
power to enter into the Facility Documents to which
it is a party and to exercise its rights and perform
its obligations under the Facility Documents and it
is duly qualified to register the Vessel under
Panamanian flag;
(ii) DUE AUTHORISATION All corporate and other action
required to authorise the execution by the Borrower
of the Facility Documents to which it is a party and
the performance of its obligations under such
Facility Documents has been duly taken;
(iii) NO DEDUCTIONS OR WITHHOLDING Under the laws of the
Cayman Islands and Panama in force at the date
hereof, the Borrower will not be required to make any
deduction or withholding from any payment it may make
under any of the Facility Documents to which it is a
party;
(iv) CLAIMS PARI PASSU Without prejudice to the security
constituted by or pursuant to any Facility Documents
to which it is a party under the laws of the Cayman
Islands and Panama in force at the date hereof, the
claims of the Agent, the Banks and the Security
Trustee against the Borrower under any such Facility
Documents will, to the extent that such claims exceed
the realised value of the security therefor, rank at
least PARI PASSU with the claims of all its other
unsecured and non-subordinated creditors save those
whose claims are preferred solely by any bankruptcy,
insolvency or other similar laws of general
application;
(v) NO IMMUNITY In any proceedings taken in the Cayman
Islands in relation to any of the Facility Documents
to which it is a party, the Borrower will not be
entitled to claim for itself or any of its assets
immunity from suit, execution, attachment or other
legal process;
(vi) GOVERNING LAW AND JUDGMENTS In any proceedings taken
in the Cayman Islands in relation to any of the
Facility Documents to which it is a party, the choice
of English law as the governing law of those Facility
Documents as are expressed to be governed by English
law and any judgment obtained in England will be
recognised and enforced;
(vii) VALIDITY AND ADMISSIBILITY IN EVIDENCE Other than the
recording of the Mortgage on a preliminary basis
through the Consulate of Panama in New
York and on a permanent basis at the Republic
Registry Office of the Republic of Panama and any
required registration in the Cayman Islands all acts,
conditions and things required to be done, fulfilled
and performed in order (a) to enable the Borrower
lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to
be assumed by it in the Facility Documents to which
it is a party, (b) to ensure that the obligations
expressed to be assumed by it in such Facility
Documents are legal, valid and binding and (c) to
make such Facility Documents admissible in evidence
in the Cayman Islands have been done, fulfilled and
performed;
(viii) NO FILING OR STAMP TAXES Under the laws of the Cayman
Islands in force at the date hereof, it is not
necessary that any of the Facility Documents to which
it is a party be filed, recorded or enrolled with any
court or other authority in its jurisdiction of
incorporation or that any stamp, registration or
similar tax be paid on or in relation to any such
Facility Documents; and
(ix) BINDING OBLIGATION The obligations expressed to be
assumed by the Borrower in the Facility Documents to
which it is a party are legal and valid obligations
binding on it in accordance with the terms of such
Facility Documents.
12.2 The Borrower further represents that:
(i) NO WINDING-UP It has not taken any corporate action
nor have any other steps been taken or legal
proceedings been started or (to the best of its
knowledge and belief) threatened against it for its
winding-up, dissolution or reorganisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer
of it or of any or all of its assets or revenues;
(ii) NO MATERIAL DEFAULT It is not in breach of or in
default under any agreement to which it is a party or
which is binding on it or any of its assets to an
extent or in a manner which might have a material
adverse effect on its business or financial
condition;
(iii) NO MATERIAL PROCEEDINGS No action or administrative
proceeding of or before any court or agency which
might have a material adverse effect on its business
or financial condition has been started or
threatened;
(iv) NO OTHER BUSINESS It has not incurred any liabilities
or entered into any other commitments nor undertaken
any business other than in connection with the
purchase or operation of the Vessel;
(v) NO UNDISCLOSED LIABILITIES As at the date hereof it
has no liabilities (contingent or otherwise) which
have not been disclosed to the Agent nor any
unrealised or anticipated losses arising from
commitments entered into by it;
(vi) FULL DISCLOSURE Each of the Charters, the Charter
Guarantee, the
Memorandum of Agreement and the Management Agreement
are in full force and effect and the Borrower has
disclosed to the Agent all of the terms and
conditions of each such agreement and there are no
amendments or variations to any such document which
have not been disclosed to the Agent;
(vii) NO OBLIGATION TO CREATE SECURITY Its execution of the
Facility Documents to which it is a party and its
exercise of its rights and performance of its
obligations thereunder will not result in the
existence of nor oblige it to create any encumbrance
over all or any of its present or future revenues or
assets except pursuant to such Facility Documents;
(viii) EXECUTION OF FACILITY DOCUMENTS Its execution of the
Facility Documents to which it is a party and its
exercise of its rights and performance of its
obligations under such Facility Documents do not
constitute and will not result in any breach of any
agreement or treaty;
(ix) ENCUMBRANCES Save as permitted by Clause 15(ix), no
encumbrance exists over all or any of its present or
future revenues or assets;
(x) OWNERSHIP OF THE BORROWER The Shareholder is the sole
shareholder of the Borrower;
(xi) OWNERSHIP OF THE SHAREHOLDER The General Partners are
the only general partners of the Shareholder; and
(xii) MANAGEMENT OF THE VESSEL The Vessel will be managed
by Universe Tankships (Bermuda) Ltd in accordance
with the provisions of the Management Agreement
during the Subsequent Charter.
13. INFORMATION COVENANTS
13.1 ANNUAL STATEMENTS
The Borrower shall using its best endeavours and as soon as the same
become available, but in any event within one hundred and eighty days
after the end of each of their respective financial years, furnish to
the Agent, the Borrower's and the Initial Charterer's or, as the case
may be, the Subsequent Charterer balance sheets as at the end of such
financial year and the Borrower's and the Initial Charterer's or, as
the case may be, the Subsequent Charterer profit-and-loss accounts in
respect of that financial year, in each case prepared in accordance
with internationally accepted accounting principles consistently
applied.
13.2 SEMI-ANNUAL STATEMENTS
The Borrower using its best endeavours and shall as soon as the same
become available, but in any event within 90 days after the end of each
of their respective financial half years, furnish to the Agent, the
Borrower's and the Initial Charterer's or, as the case may be, the
Subsequent Charterer's balance sheets as at the end of such accounting
period and the Borrower's and the Initial Charterer's or, as the case
may be, the Subsequent Charterer's profit-and-loss accounts in respect
of that accounting period, together with the Borrower's cash flow
reports for such period in each case prepared in accordance with
internationally accepted accounting principles consistently applied.
13.3 NOTIFICATION OF EVENT OF DEFAULT
The Borrower shall promptly inform the Agent of the occurrence of any
event which is or may become (with the passage of time, the giving of
notice, the making of any determination hereunder or any combination
thereof) an Event of Default and, upon receipt of a written request to
that effect from the Agent, promptly deliver to the Agent a written
confirmation given by a duly authorised officer of the Borrower to the
effect that, save as previously notified to the Agent or as notified in
such confirmation, no such event has occurred.
13.4 NOTIFICATION OF OFF-HIRE
The Borrower shall promptly inform the Agent of any material
interruption in the operation of the Vessel (which shall include
situations where the Vessel is off-hire for a period of 5 days or more
at any one time) and the financial implications of such interruption.
13.5 OTHER FINANCIAL INFORMATION
The Borrower shall from time to time on the request of the Agent use
its best endeavours to furnish the Agent with such other information
about its and either the Initial Charterer's or, as the case may be,
the Subsequent Charterer's business, assets and financial condition
(including financial accounts and cash flow reports) as the Agent may
reasonably request.
13.6 PROVISO
It is hereby agreed that the Borrower's obligations under this Clause
13 to provide or furnish the Agent with any information regarding the
Initial Charterer shall cease upon termination of the Initial Charter.
14. FINANCIAL CONDITION
14.1 FAIR MARKET VALUE OF VESSEL
The Borrower shall ensure that the Fair Market Value of the Vessel as
established by ▇.▇. ▇▇▇▇▇▇ and H ▇▇▇▇▇▇▇▇ Limited or such other two (2)
reputable brokers appointed by the Agent (after consultation with the
Borrower) shall at all times equal to or exceed 140% of the Loan as
defined in the Senior Facility Agreement. If at any time this ratio is
not met, the Borrower will forthwith on the demand of the Agent prepay
such portion of the Loan as will ensure that such ratios are complied
with. The Agent shall be entitled to request such estimates of the Fair
Market Value at least twice per calendar year (or at any time after the
occurrence of an Event of Default) and the Borrower shall promptly pay
or reimburse to the Agent the cost of obtaining such valuations.
14.2 MINIMUM WORKING CAPITAL
The Borrower shall maintain at all times Working Capital (which shall
mean Current Assets less Current Liabilities) of at least $500,000.
14.3 NOTIFICATION OF FINANCIAL CONDITION The Borrower shall deliver to the
Agent semi annually a certificate stating the Borrower's compliance
with the covenants undertaken pursuant to this Clause 14 with each of
the semi-annual financial statements delivered pursuant to Clause 13.2.
14.4 For the purposes of Clause 14.2:
"CURRENT ASSETS" means all assets of the Borrower which, in accordance
with internationally accepted accounting principles, would be classed
as current assets; and
"CURRENT LIABILITIES" means all obligations of the Borrower which, in
accordance with internationally accepted accounting principles, would
be considered as current liabilities, excluding all amounts of
principal due under this Facility within one year from the date of
calculation.
15. GENERAL COVENANTS
The Borrower:
(i) shall obtain, comply with the terms of and do all
that is necessary to maintain in full force and
effect all authorisations, approvals, licences and
consents required in or by the laws and regulations
of the Cayman Islands and all other applicable
jurisdictions to enable it lawfully to enter into and
perform its obligations under the Facility Documents
to which it is a party or to ensure the legality,
validity, enforceability or admissibility in evidence
in the Cayman Islands and all other applicable
jurisdictions of such Facility Documents;
(ii) shall procure that no change of the classification or
flag of the Vessel, management of the Vessel or the
Charters shall occur without the prior written
consent of the Agent;
(iii) shall, in the event of total loss of the Vessel,
procure that the Loan is repaid in full within 90
days of the Agent's written notice (whether as a
result of the application of insurance proceeds or
otherwise);
(iv) shall not, without the prior written consent of the
Agent, (such consent not to be unreasonably withheld)
permit any distributions of the Borrower's profits or
assets or pay any dividends or other distributions to
the Shareholder or any of the Shareholder's partners;
(v) shall not make any loans, grant any credit (save in
the ordinary course of business) or give any
guarantee or indemnity to or for the benefit of any
person or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any
obligations of any person;
(vi) shall not, without prior written consent of the
Agent, make any investments which exceed $500,000
with the assets of the Borrower (otherwise than by
placing its cash into bank accounts with the Agent)
except for any investments required to maintain the
classification status of the Vessel;
(vii) shall not, without the prior written consent of the
Instructing Group and the Agent, permit any change to
its shareholding;
(viii) shall maintain all its bank accounts with the Agent's
branch in New York and shall only operate such
accounts in accordance with Clause 11 of the
Assignment of Earnings and Insurances;
(ix) shall not, without the prior consent of the Agent,
create or permit to subsist any encumbrance over all
or any of its present or future revenues or assets
other than the Permitted Liens and any encumbrance
created pursuant to the Facility Documents to which
it is a party and any first priority security over
the Vessel and its earnings, insurances and bank
accounts in favour of the Security Trustee on terms
acceptable to the Agent to secure the Borrower's
obligations under the Senior Facility Agreement;
(x) shall manage its business and procure that the Vessel
is managed in compliance with all applicable laws and
regulations applicable thereto and shall promptly
notify the Agent of any non-compliance other than of
a minor or technical nature;
(xi) shall not engage in any other business other than the
ownership and chartering of the Vessel;
(xii) shall procure that the Vessel is at all times fully
approved by major oil companies relevant in its
trade;
(xiii) shall ensure that during the currency of the
Subsequent Charter the technical management of the
Vessel remains with Universal Tankships (Bermuda)
Ltd.;
(xiv) shall ensure that the Vessel has been sent for
drydocking and has been subject to special survey
prior to it being redelivered to the Borrower upon
termination of the Initial Charter.
16. EVENTS OF DEFAULT
16.1 If:
(i) FAILURE TO PAY The Borrower or the Initial Charterer
or, as the case may be, the Subsequent Charterer,
fails to pay any sum due from it under this Agreement
or, the Initial Charter or, as the case may be, the
Subsequent Charter at any time in the currency and in
the manner specified herein or therein Provided that
it shall not be an Event of Default if any sum due
under the Initial Charter or, as the case may be, the
Subsequent Charter is paid by the Initial Charterer
or, as the case may be, the Subsequent Charterer,
within 5 business days of the due date for payment as
specified therein; or
(ii) MISREPRESENTATION Any representation or statement
made by the Borrower in any Facility Document or in
any notice or other document, certificate or
statement delivered by it pursuant hereto or thereto
or in connection herewith or therewith is or proves
to have been incorrect or misleading in any material
respect when made; or
(iii) COVENANTS The Borrower fails duly to perform the
obligations expressed to be assumed by it in Clause
14 (FINANCIAL CONDITION) or 15 (GENERAL COVENANTS);
or
(iv) INSURANCE The Borrower fails to insure or procure the
insurance of the Vessel in accordance with the
requirements of the Assignment of Earnings and
Insurances and/or the Mortgage; or
(v) OTHER OBLIGATION The Borrower fails duly to perform
or comply with any other obligation expressed to be
assumed by it in any Facility Document and such
failure is not remedied within thirty days after the
Agent has given notice to the Borrower requiring the
same to be remedied; or
(vi) CROSS DEFAULT If (a) any indebtedness of the Borrower
or the Shareholder or either General Partner or the
Initial Charterer or, as the case may be, the
Subsequent Charterer or the Guarantor is not paid
when due (or within any period of grace applicable
thereto), (b) any indebtedness of the Borrower or the
Shareholder, or either General Partner or the Initial
Charterer or, as the case may be, the Subsequent
Charterer or the Guarantor is declared to be or
otherwise becomes due and payable prior to its
specified maturity or (c) any creditor of the
Borrower or the Shareholder or either General
Partner, the Initial Charterer or, as the case may
be, the Subsequent Charterer or the Guarantor become
entitled to declare any indebtedness of the Borrower
or the Shareholder or either General Partner or the
Initial Charterer or, as the case may be, the
Subsequent Charterer or the Guarantor due and payable
prior to its specified maturity Provided that it
shall not be an Event of Default if, with respect to
either General Partner, the events specified in (a),
(b) and (c) above are genuinely disputed by such
General Partner in appropriate legal proceedings; or
(vii) INSOLVENCY AND RESCHEDULING The Borrower or the
Shareholder or either General Partner or the Initial
Charterer or, as the case may be, the Subsequent
Charterer or the Guarantor is unable to pay its debts
as they fall due, commences negotiations with any one
or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of or a
composition with its creditors; or
(viii) WINDING-UP Otherwise than for the purposes of a
reconstruction on terms previously approved by the
Instructing Group, the Borrower or the Shareholder or
either General Partner or the Initial Charterer or,
as the case may be, the Subsequent Charterer or the
Guarantor takes any corporate action or other steps
are taken or legal proceedings are started for its
winding-up, dissolution or re-organisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer
of it or of any or all of its revenues and assets; or
(ix) REPUDIATION The Borrower or the Initial Charterer or,
as the case may be, the Subsequent Charterer
repudiates any Facility Document to which is a party
or the Initial Charter or, as the case may be, the
Subsequent Charter or does or causes to be done any
act or thing evidencing an intention to repudiate any
such Facility Document or the Initial Charter or, as
the case may be, the Subsequent Charter; or
(x) LEGALITY OF FACILITY DOCUMENTS At any time any act,
condition or thing required to be done, fulfilled or
performed in order (a) to enable the Borrower
lawfully to enter into, exercise its rights under and
perform its obligations expressed to be assumed by it
in the Facility Documents to which it is a party, (b)
to ensure that the obligations expressed to be
assumed by the Borrower in such Facility Documents
are legal, valid and binding or (c) to make any of
such Facility Documents admissible in evidence in the
Cayman Islands is not done, fulfilled or performed;
or
(xi) COMPLIANCE WITH OBLIGATIONS At any time it is or
becomes unlawful for the Borrower to perform or
comply with any or all of its obligations under any
Facility Document or any of the obligations of the
Borrower under the Facility Document are not or cease
to be legal, valid and binding; or
(xii) SEIZURE BY GOVERNMENT By or under the authority of
any government, (a) the management of the Borrower is
wholly or partially displaced or the authority of the
Borrower in the conduct of its business is wholly or
partially curtailed or (b) the whole or any part (the
market value of which is twenty per cent. or more of
the market value of the whole) of its revenues or
assets is seized, nationalised, expropriated or
compulsorily acquired; or
(xiii) MATERIAL ADVERSE CHANGE There shall occur any event
or circumstance which in the opinion of the
Instructing Group may, or may be likely to,
materially and adversely affect the ability of the
Borrower or the Initial Charterer or, as the case may
be, the Subsequent Charterer to discharge its
obligations under the Facility Documents to which it
is a party or the Initial Charter or, as the case may
be, the Subsequent Charter in the manner provided
therein; or
(xiv) VARIATION OR TERMINATION OF AGREEMENTS The Memorandum
of Agreement or either Charters is amended in any
material manner without the prior written consent of
the Agent or terminated otherwise than by reason of
the due discharge of all obligations of each of the
parties thereto or if any party thereto is in breach
of any of its obligations thereunder; or
(xv) MANAGEMENT AGREEMENT If there is any material
amendment to the Management Agreement or the
Management Agreement is terminated or otherwise
ceases to be effective without the Agent's prior
written consent; or
(xvi) SENIOR FACILITY Any event of default (howsoever
described) occurs under the Senior Facility
Agreement; or
(xvii) PARTNERSHIP/OWNERSHIP STRUCTURE If there is any
change in the shareholding of the Borrower or of
either General Partner without the prior written
consent of the Instructing Group; or
(xviii) ANALOGOUS EVENT If any event occurs to the Borrower,
the Shareholder, any General Partner, the Initial
Charterer or, as the case may be, the Subsequent
Charterer under the laws of any other jurisdiction
which is analogous to any of the events or
circumstances referred to in paragraphs (vii) or
(viii) above; or
(xix) SWAP AGREEMENT Any event of default (howsoever
described) occurs under the Interest Rate Swap
Agreement; or
(xx) SUBSEQUENT CHARTERER If the Subsequent Charterer
fails to take delivery of the Vessel pursuant to the
Subsequent Charter promptly upon the expiry of the
Initial Charter,
then, and in any such case and at any time thereafter, the Agent may,
and shall if so instructed by the Instructing Group, by written notice
to the Borrower:
(a) declare the Loan to be immediately due and payable (whereupon
the same shall become so payable together with accrued
interest thereon and any other sums then owed by the Borrower
hereunder) or declare the Loan to be due and payable on demand
of the Agent; and/or
(b) declare that the Facility Amount shall be cancelled, whereupon
the same shall be cancelled and the amount thereof reduced to
zero.
16.2 ADVANCE DUE ON DEMAND
If, pursuant to Clause 16.1, the Agent declares the Loan to be due and
payable on demand of the Agent, then, and at any time thereafter, the
Agent may by written notice to the Borrower:
(i) call for repayment of the Loan on such date as it may
specify in such notice (whereupon the same shall
become due and payable on such date together with
accrued interest thereon and any other sums then owed
by the Borrower hereunder) or withdraw its
declaration with effect from such date as it may
specify in such notice; and/or
(ii) select as the duration of any Interest Period
relating to an Advance which begins whilst such
declaration remains in effect a period of six months
or less.
16.3 PROVISO
(i) It is hereby agreed that each of the events set out
in Clause 16.1(i), (vi), (vii), (viii), (ix), (xiii)
and (xiv) shall not be an Event of Default if it
occurs in relation to the Initial Charterer after the
termination of the Initial Charter as a result of the
obligations thereunder having been fully performed by
the Initial Charterer in accordance with the terms
specified therein; and
(ii) It is hereby agreed that if any Event of Default
occurs only in relation to the Initial Charterer or
Subsequent Charterer and within 15 days thereafter
alternative arrangements in form and substance
satisfactory to the Agent and the Instructing Group,
as determined in their sole discretion, are entered
into to provide alternative security for the
performance by the Borrower of its obligations
hereunder, then the Agent, on instruction of the
Instructing Group, may agree that the event of
circumstances giving rise to such Event of Default
shall not be treated as an Event of Default.
17. DEFAULT INTEREST AND INDEMNITY
17.1 DEFAULT INTEREST PERIODS
If any sum due and payable by the Borrower hereunder is not paid on the
due date therefor in accordance with the provisions of Clause 19
(PAYMENTS) or if any sum due and payable by the Borrower under any
judgment of any court in connection with this Agreement is not paid on
the date of such judgment, the period beginning on such due date or, as
the case may be, the date of such judgment and ending on the date upon
which the obligation of the Borrower to pay such sum (the balance
thereof for the time being unpaid being herein referred to as an
"UNPAID SUM") is discharged shall be divided into successive periods,
each of which (other than the first) shall start on the last day of the
preceding such period and the duration of each of which shall be
selected by the Agent.
17.2 DEFAULT INTEREST
During each such period relating thereto as is mentioned in Clause 17.1
(DEFAULT INTEREST PERIODS) an unpaid sum shall bear interest at the
rate per annum which is the sum from time to time of one per cent., the
Margin and LIBOR for that period Provided that:
(i) if, for any such period, LIBOR falls to be determined
pursuant to the proviso to the definition thereof but
none of the Reference Banks was offering dollar
deposits for the period aforesaid, the rate of
interest applicable to such unpaid sum shall be
determined by reference to the cost to each Bank of
obtaining such deposits from such sources as it may
select as notified to the Agent; and
(ii) if such unpaid sum is all or part of the Advance
which became due and payable on a day other than the
last day of an Interest Period relating thereto, the
first such period applicable thereto shall be of a
duration equal to the unexpired portion of that
Interest Period and the rate of interest applicable
thereto during such period shall be that which
exceeds by one per cent. the rate which would have
been applicable to it had it not so fallen due.
17.3 PAYMENT OF DEFAULT INTEREST
Any interest which shall have accrued under Clause 17.2 (DEFAULT
INTEREST) in respect of an unpaid sum shall be due and payable and
shall be paid by the Borrower at the end of the period by reference to
which it is calculated or on such other dates as the Agent may specify
by written notice to the Borrower.
17.4 BROKEN PERIODS
If any Bank receives or recovers all or any part of such Bank's share
of the Advance otherwise than on the last day of an Interest Period
relating to the Advance, the Borrower shall pay to the Agent on demand
an amount equal to the amount (if any) by which (a) the additional
interest which would have been payable on the amount so received or
recovered had it been received or recovered on the last day of that
Interest Period exceeds (b) the amount of interest which in the opinion
of the Agent would have been payable to the Agent on the last day of
that Interest Period in respect of a dollar deposit equal to the amount
so received or recovered placed by it with a prime bank in London for a
period starting on the third business day following the date of such
receipt or recovery and ending on the last day of that Interest Period.
17.5 BORROWER'S INDEMNITY
The Borrower undertakes:
(i) to indemnify each of the Agent, each Bank and the
Security Trustee against any loss or expense,
including legal fees on a full indemnity basis, which
any of them may sustain or incur as a consequence of
any default by the Borrower in the performance of any
of the obligations expressed to be assumed by it in
any of the Facility Documents to which it is a party;
and
(ii) to indemnify each Bank against any loss it may suffer
as a result of its funding its share of the Advance
requested by the Borrower hereunder but not made by
reason of the operation of any one or more of the
provisions hereof.
17.6 Any unpaid sum shall (for the purposes of this Clause 17 and Clause
11.1 (INCREASED COSTS) be treated as an advance and accordingly in this
Clause 17 and Clause 11.1 (INCREASED COSTS) the term "Advance" includes
any unpaid sum and the term "Interest Period", in relation to an unpaid
sum, includes each such period relating thereto as is mentioned in
Clause 17.1 (DEFAULT INTEREST PERIODS).
18. CURRENCY OF ACCOUNT AND PAYMENT
18.1 CURRENCY OF ACCOUNT
The dollar is the currency of account and payment for each and every
sum at any time due from the Borrower hereunder Provided that each
payment in respect of costs and expenses shall be made in the currency
in which the same were incurred.
18.2 CURRENCY INDEMNITY
If any sum due from the Borrower under any Facility Document to which
the Borrower is a party or any order or judgment given or made in
relation hereto or thereto has to be converted from the currency (the
"FIRST CURRENCY") in which the same is payable under such Facility
Document or order or judgment into another currency (the "SECOND
CURRENCY") for the purpose of (i) making or filing a claim or proof
against the Borrower, (ii) obtaining an order or judgment in any court
or other tribunal or (iii) enforcing any order or judgment given or
made in relation to any Facility Document, the Borrower shall indemnify
and hold harmless each of the persons to whom such sum is due from and
against any loss suffered as a result of any discrepancy between (a)
the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (b) the
rate or rates of exchange at which such person may in the ordinary
course of business purchase the first currency with the second currency
upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.
19. PAYMENTS
19.1 PAYMENTS
On each date on which this Agreement requires an amount to be paid by
the Borrower or a Bank hereunder, the Borrower or, as the case may be,
such Bank shall make the same available to the Agent by payment in
dollars and in same day funds (or in such other funds as may for the
time being be customary in New York City for the settlement in New York
City of international banking transactions in dollars) to the account
of the Agent in Oslo or such other account as the Agent may have
specified for this purpose.
19.2 NO SET-OFF
All payments made by the Borrower hereunder shall be made free and
clear of and without any deduction for or on account of any set-off or
counterclaim.
20. SET-OFF
The Borrower authorises each Bank at any time following the occurrence
of an Event of Default to apply any credit balance to which the
Borrower is entitled on any account of the Borrower with such Bank in
satisfaction of any sum due and payable from the Borrower to such Bank
under this Agreement but unpaid; for this purpose, such Bank is
authorised to purchase with the moneys standing to the credit of any
such account such other currencies as may be necessary to effect such
application.
21. SHARING
21.1 REDISTRIBUTION OF PAYMENTS
If at any time, the proportion which any Bank (a "RECOVERING BANK") has
received or recovered (whether by payment, the exercise of a right of
set-off or combination of accounts or otherwise) in respect of its
portion of any payment (a "RELEVANT PAYMENT") to be made under this
Agreement by the Borrower for account of such Recovering Bank and one
or more other Banks is greater (the portion of such receipt or recovery
giving rise to such excess proportion being herein called an "EXCESS
AMOUNT") than the proportion thereof so received or recovered by the
Bank or Banks so receiving or recovering the smallest proportion
thereof, then:
(i) such Recovering Bank shall pay to the Agent an amount
equal to such excess amount;
(ii) there shall thereupon fall due from such Recovering
Bank an amount equal to the amount paid out by such
Recovering Bank pursuant to paragraph (i) above, the
amount so due being, for the purposes hereof, treated
as if it were an unpaid part of such Recovering
Bank's portion of such relevant payment; and
(iii) the Agent shall treat the amount received by it from
such Recovering Bank pursuant to paragraph (i) above
as if such amount had been received by it from the
Borrower in respect of such relevant payment and
shall pay the same to the persons entitled thereto
(including such Recovering Bank) PRO RATA to their
respective entitlements thereto.
21.2 REPAYABLE RECOVERIES
If any sum (a "RELEVANT SUM") received or recovered by a Recovering
Bank in respect of any amount owing to it by the Borrower becomes
repayable and is repaid by such Recovering Bank, then:
(i) each Bank which has received a share of such relevant
sum by reason of the implementation of Clause 19.1
(PAYMENTS) shall, upon request of the Agent, pay to
the Agent for account of such Recovering Bank an
amount equal to its share of such relevant sum; and
(ii) there shall thereupon fall due from the Borrower to
each such Bank an amount equal to the amount paid out
by it pursuant to paragraph (i) above, the amount so
due being, for the purposes hereof, treated as if it
were the sum payable to such Bank against which such
Bank's share of such relevant sum was applied.
22. FEES
22.1 ARRANGEMENT FEE
The Borrower shall pay to the Agent for its own account hereunder an
arrangement fee of the amount specified in the letter exchanged between
the Agent and General Maritime Corporation dated 10 October 1997 such
fee to be payable at the Drawdown Date.
22.2 AGENCY FEE
The Borrower shall pay to the Agent a non-refundable agency fee of the
amount specified in the letter exchanged between the Agent and General
Maritime Corporation dated 10 October 1997, such fee to be payable on
the Drawdown Date and on each anniversary thereof.
23. COSTS AND EXPENSES
23.1 TRANSACTION EXPENSES
The Borrower shall, from time to time on demand of the Agent, reimburse
the Agent for all costs and expenses including legal fees) incurred by
it in connection with the negotiation, preparation and execution of the
Facility Documents to which it is party and the completion of the
transactions herein contemplated.
23.2 PRESERVATION AND ENFORCEMENT OF RIGHTS
The Borrower shall, from time to time on demand of the Agent, reimburse
the Agent, the Banks and the Security Trustee for all costs and
expenses (including legal fees) incurred in or in connection with the
preservation and/or enforcement of any of the rights of the Agent, the
Banks and the Security Trustee under the Facility Documents to which it
is a party.
23.3 STAMP TAXES
The Borrower shall pay all stamp, registration and other taxes to which
any Facility Document or any judgment given in connection with any
Facility Document is or at any time may be subject and shall, from time
to time on demand of the Agent, indemnify the Security Trustee and the
Bank against any liabilities, costs, claims and expenses resulting from
any failure to pay or any delay in paying any such tax.
23.4 BANKS' LIABILITIES FOR COSTS
If the Borrower fails to perform any of its obligations under this
Clause 23, each Bank shall, in the proportion borne by its share of the
Loan to the amount of the Loan for the time being indemnify the Agent
against any loss incurred by it as a result of such failure and the
Borrower shall forthwith reimburse each Bank for any payment made by it
pursuant to this Clause 23.4.
24. THE AGENT AND THE BANKS
24.1 APPOINTMENT OF THE AGENT
Each Bank hereby appoints the Agent to act as its agent in connection
with this Agreement and the other Facility Documents and authorises the
Agent to exercise such rights, powers and discretions as are
specifically delegated to the Agent by the terms hereof together with
all such rights, powers and discretions as are reasonably incidental
thereto.
24.2 AGENT'S DISCRETIONS
The Agent may:
(i) assume that:
(a) any representation made by the Borrower in
connection with this Agreement and the other
Facility Documents is true;
(b) no event which is or may become an Event of
Default has occurred; and
(c) the Borrower is not in breach of or default
under its obligations with this Agreement
and the other Facility Documents
unless it has actual knowledge or actual notice to
the contrary;
(ii) assume that the Facility Office of each Bank is that
identified with its signature (or, in the case of a
Transferee, at the end of the Transfer Certificate to
which it is a party as Transferee) below until it has
received from such Bank a notice designating some
other office of such Bank to replace its Facility
Office and act upon any such notice until the same is
superseded by a further such notice;
(iii) engage and pay for the advice or services of any
lawyers, accountants, surveyors or other experts
whose advice or services may to it seem necessary,
expedient or desirable and rely upon any advice so
obtained;
(iv) rely as to any matters of fact which might reasonably
be expected to be within the knowledge of the
Borrower upon a certificate signed by or on behalf of
the Borrower;
(v) rely upon any communication or document believed by
it in good faith to be genuine;
(vi) refrain from exercising any right, power or
discretion vested in it as agent hereunder unless and
until instructed by an Instructing Group as to
whether or not such right, power or discretion is to
be exercised and, if it is to be
exercised, as to the manner in which it should be
exercised; and
(vii) refrain from acting in accordance with any
instructions of an Instructing Group to begin any
legal action or proceeding arising out of or in
connection with this Agreement until it shall have
received such security as it may require (whether by
way of payment in advance or otherwise) for all
costs, claims, expenses (including legal fees) and
liabilities which it will or may expend or incur in
complying with such instructions.
24.3 AGENT'S OBLIGATIONS
The Agent shall:
(i) promptly inform each Bank of the contents of any
notice or document received by it from the Borrower
or, as the case may be, the Guarantor under this
Agreement and the other Facility Documents;
(ii) promptly notify each Bank of the occurrence of any
Event of Default or any default by the Borrower or,
as the case may be, the Guarantor in the due
performance of or compliance with its obligations
under this Agreement and the other Facility Documents
of which the Agent has actual knowledge or actual
notice;
(iii) save as otherwise provided herein, act as agent
hereunder in accordance with any instructions given
to it by an Instructing Group, which instructions
shall be binding on all the Banks; and
(iv) if so instructed by an Instructing Group, refrain
from exercising any right, power or discretion vested
in it as agent hereunder.
24.4 EXCLUDED OBLIGATIONS
Notwithstanding anything to the contrary expressed or implied herein,
the Agent shall not:
(i) be bound to enquire as to:
(a) whether or not any representation made by
the Borrower or, as the case may be, the
Guarantor in connection with the Facility
Documents is true;
(b) the occurrence or otherwise of any event
which is or may become an Event of Default;
(c) the performance by the Borrower or, as the
case may be, the Guarantor of its
obligations under any of the Facility
Documents; or
(d) any breach of or default by the Borrower or,
as the case may be, the Guarantor of or
under its obligations under any of the
Facility
Documents;
(ii) be bound to account to each Bank for any sum or the
profit element of any sum received by it for its own
account;
(iii) be bound to disclose to any other person any
information relating to the Borrower or as the case
may be, the Guarantor if such disclosure would or
might in its opinion constitute a breach of any law
or regulations or be otherwise actionable at the suit
of any person; or
(iv) be under any obligations other than those for which
express provision is made herein.
24.5 INDEMNIFICATION
Each Bank shall, from time to time on demand by the Agent, indemnify
the Agent, in the proportion its share of the Loan bears to the amount
of the Loan at the time of such demand or, if the Loan has then been
repaid in full, against any and all costs, claims, losses, expenses
(including legal fees) and liabilities together with any VAT thereon
which the Agent may incur, otherwise than by reason of its own
negligence or wilful misconduct, in acting in its capacity as agent
hereunder.
24.6 EXCLUSION OF LIABILITIES
The Agent does not accept any responsibility for the accuracy and/or
completeness of information supplied by the Borrower or as the case may
be, the Guarantor in connection herewith or with any other Facility
Document or for the legality, validity, effectiveness, adequacy or
enforceability of this Agreement or any other Facility Document and the
Agent shall not be under any liability as a result of taking or
omitting to take any action in relation to this Agreement or any other
Facility Document, save in the case of gross negligence or wilful
misconduct.
24.7 NO ACTION
Each Bank agrees that it will not assert or seek to assert against any
director, officer or employee of the Agent any claim it might have
against any of them in respect of the matters referred to in Clause
24.6 (EXCLUSION OF LIABILITIES).
24.8 BUSINESS WITH THE BORROWER
The Agent and each of the Banks may accept deposits from, lend money to
and generally engage in any kind of banking or other business with the
Borrower or as the case may be, the Guarantor.
24.9 RESIGNATION
The Agent may resign its appointment hereunder at any time without
assigning any reason therefor by giving not less than thirty days'
prior written notice to that effect to each of the other parties hereto
Provided that no such resignation shall be effective until a successor
for the Agent is appointed in accordance with the succeeding provisions
of this Clause 24.
24.10 SUCCESSOR AGENT
If the Agent gives notice of its resignation pursuant to Clause 24.9
then any reputable and experienced bank or other financial institution
may be appointed as a successor to the Agent by an Instructing Group
with the Borrower's consent (such consent not to be unreasonably
delayed or withheld) during the period of such notice but, if no such
successor is so appointed, the Agent may appoint such a successor
itself.
24.11 RIGHTS AND OBLIGATIONS
If a successor to the Agent is appointed under the provisions of Clause
24.10 (SUCCESSOR AGENT), then (i) the retiring Agent shall be
discharged from any further obligation hereunder but shall remain
entitled to the benefit of the provisions of this Clause 24 and (ii)
its successor and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if
such successor had been a party hereto.
24.12 OWN RESPONSIBILITY
It is understood and agreed by each Bank that it has itself been, and
will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Borrower
or, as the case may be, the Guarantor and, accordingly, each Bank
warrants to the Agent that it has not relied and will not hereafter
rely on the Agent:
(i) to check or enquire on its behalf into the adequacy,
accuracy or completeness of any information provided
by the Borrower or, as the case may be, the Guarantor
in connection with any of the Facility Documents or
the transactions therein contemplated (whether or not
such information has been or is hereafter circulated
to each Bank by the Agent); or
(ii) to assess or keep under review on its behalf the
financial condition, creditworthiness, condition,
affairs, status or nature of the Borrower or, as the
case may be, the Guarantor.
24.13 AGENCY DIVISION SEPARATE
In acting as agent hereunder for the Banks, the Agent shall be regarded
as acting through its agency division which shall be treated as a
separate entity from any other of its divisions or departments and,
notwithstanding the foregoing provisions of this Clause 24, any
information received by some other division or department of the Agent
may be treated as confidential and shall not be regarded as having been
given to the Agent's agency division.
24.14 CONFIDENTIAL INFORMATION
Notwithstanding anything to the contrary expressed or implied herein
and without prejudice to the provisions of Clause 24.13 (AGENCY
DIVISION SEPARATE), the Agent shall not as between itself and the Banks
be bound to disclose to any Bank or other person any information which
is supplied by Borrower or, as the case may be, the Guarantor to the
Agent in its capacity as agent hereunder for the Banks and which is
identified by such member of the Group at the time it is so supplied as
being confidential information Provided that the consent of the
Borrower or, as the case may be, the Guarantor to such disclosure shall
not be required in relation to any information which in the opinion of
the Agent relates to an Event of Default or in respect of which the
Banks have given a confidentiality undertaking in a form satisfactory
to the Agent and the Borrower or, as the case may be, the Guarantor.
25. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and permitted assigns.
26. ASSIGNMENTS AND TRANSFERS
26.1 NO ASSIGNMENT AND TRANSFER BY THE BORROWER
The Borrower shall not be entitled to assign or transfer all or any of
its rights, benefits and obligations hereunder.
26.2 ASSIGNMENTS AND TRANSFERS BY BANKS
Any Bank may at any time (and at its own cost) assign or transfer all
or any of its rights and benefits hereunder.
26.3 ASSIGNMENTS BY BANKS
If any Bank assigns all or any of its rights and benefits hereunder in
accordance with Clause 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS), then,
unless and until the assignee has agreed with the Agent and the
Security Trustee that it shall be under the same obligations towards
each of them as it would have been under if it had been an original
party hereto as a Bank, the Agent and the Security Trustee shall not be
obliged to recognise such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
26.4 TRANSFERS BY BANKS
If a Bank wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 26.2 (ASSIGNMENTS AND
TRANSFERS BY BANKS), then such transfer may be effected by the delivery
to the Agent and the Borrower of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date
specified in such Transfer Certificate and the fifth business day after
(or such earlier business day endorsed by the Agent on such Transfer
Certificate) the date of delivery of such Transfer Certificate to the
Agent:
(i) to the extent that in such Transfer Certificate such
Bank seeks to transfer its rights and obligations
hereunder, the Borrower and such Bank shall be
released from further obligations towards one another
hereunder and their respective rights against one
another shall be cancelled (such rights and
obligations being referred to in this Clause 26.4 as
"DISCHARGED RIGHTS AND OBLIGATIONS"); and
(ii) the Borrower and the Transferee party thereto shall
assume obligations towards one another and/or acquire
rights against one another which differ from such
discharged rights and obligations only insofar as the
Borrower and such Transferee have assumed and/or
acquired the same in place of the Borrower and such
Bank;
26.5 TRANSFER FEES
On the date upon which a transfer takes effect pursuant to this Clause
26, the Transferee in respect of such transfer shall pay to the Agent
for its own account a transfer fee of $500.
26.6 Any assignment or transfer which is not contemplated by the express
provisions of this Clause 26 may only be made by a Bank with the prior
written consent of the Borrower and in such event, the provisions of
Clauses 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS), 26.4 (TRANSFERS BY
BANKS) and 26.5 (TRANSFER FEES) shall apply MUTATIS MUTANDIS thereto.
26.7 DISCLOSURE OF INFORMATION
Any Bank may, with the prior written consent of the Borrower (such
consent not to be unreasonably withheld or delayed), disclose to any
actual or potential assignee or to any person who may otherwise enter
into contractual relations with such Bank in relation to this Agreement
such information about the Borrower as such Bank and the Borrower shall
consider appropriate.
27. CALCULATIONS AND EVIDENCE OF DEBT
27.1 BASIS OF ACCRUAL
Interest and commitment commission shall accrue from day to day and
shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed.
27.2 EVIDENCE OF DEBT
Each Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it
hereunder; in any legal action or proceeding arising out of or in
connection with this Agreement and other Facility Documents, the
entries made in such accounts shall be conclusive evidence of the
existence and amounts of the obligations of the Borrower therein
recorded.
27.3 CONTROL ACCOUNTS
The Agent shall maintain on its books a control account or accounts in
which shall be recorded (i) the amount of the Advance made hereunder by
the Banks, (ii) the amount of all principal, interest and other sums
due or to become due from the Borrower to each of the Banks under the
Facility Documents and (iii) the amount of any sum received or
recovered by the Agent under the Facility Documents and each Bank's
share therein. To the extent that discrepancies exist between accounts
maintained by each Bank pursuant to clause 27.2 (EVIDENCE OF DEBT) and
control accounts maintained by the Agent under this Clause 27.3, the
control accounts herein maintained shall prevail.
27.4 PRIMA FACIE EVIDENCE
In any legal action or proceeding arising out of or in connection with
this Agreement and/or any other Facility Document, the entries made in
the accounts maintained pursuant to Clause 27.2 (EVIDENCE OF DEBT) or
Clause 27.3 (CONTROL ACCOUNTS) shall be PRIMA FACIE evidence of the
existence and extent of the obligations of the Borrower therein
recorded.
27.5 CHANGE OF CIRCUMSTANCE CERTIFICATES
A certificate of the Bank as to (a) the amount by which a sum payable
to it hereunder is to be increased under Clause 10.1 (TAX GROSS-UP) or
(b) the amount for the time being required to indemnify it against any
such cost or liability as is mentioned in Clause 10.2 (TAX INDEMNITY)
or 11.1 (INCREASED COSTS) shall, in the absence of manifest error, be
conclusive for the purposes of this Agreement and PRIMA FACIE evidence
in any legal action or proceeding arising out of or in connection with
this Agreement.
28. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the
Agent, any Bank and the Security Trustee or any of them, any right or
remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy.
The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
29. PARTIAL INVALIDITY
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.
30. NOTICES
30.1 COMMUNICATIONS IN WRITING
Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, facsimile or letter.
30.2 COMMUNICATIONS THROUGH THE AGENT
Each communication between the Banks and the Borrower hereunder shall
only be effected through the Agent.
30.3 DELIVERY
Any communication or document to be made or delivered by one party to
the other pursuant to this Agreement shall (unless the other party has
by three days' written notice to the one specified another address or
telex or facsimile number) be made or delivered to that other party at
the address or telex or facsimile number identified with its signature
below and shall be deemed to have been made or delivered when
despatched and answerback received (in the case of any communication
made by telex) or (in the case of any communication made by facsimile)
when legibly received or (in the case of any communication made by
letter) when left at that address or (as the case may be) ten days
after being deposited in the post postage prepaid in an envelope
addressed to it at that address Provided that:
(i) if any such communication or document would otherwise
be deemed to have been received on a day which is not
a business day it shall be deemed to have been
received on the first business day thereafter; and
(ii) any communication or document to be made or delivered
by the Borrower to each Bank shall be effective only
when legibly received by the Bank and then only if
the same is expressly marked for the attention of the
department or officer identified with such Bank's
signature below (or such other department or officer
as such Bank shall from time to time specify for this
purpose).
30.4 ENGLISH LANGUAGE
Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true
and accurate translation thereof.
31. LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
32. JURISDICTION
32.1 ENGLISH COURTS
Each of the parties hereto irrevocably agrees for the benefit of the
Agent, the Banks and the Security Trustee that the courts of England
shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and, for such purposes, irrevocably
submits to the jurisdiction of such courts.
32.2 APPROPRIATE FORUM
The Borrower irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 32.1 (ENGLISH
COURTS) being nominated as the forum to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out
of or in connection with this Agreement and agrees not to claim that
any such court is not a convenient or appropriate forum.
32.3 SERVICE OF PROCESS
The Borrower agrees that the process by which any suit, action or
proceeding in England is begun may be served on it by being delivered
to ▇▇▇▇▇▇▇▇ Chance Secretaries Limited at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ or other of its registered offices for the time being.
32.4 NON-EXCLUSIVE SUBMISSIONS
The submission to the jurisdiction of the courts referred to in Clause
32.1 (ENGLISH COURTS) shall not (and shall not be construed so as to)
limit the right of the Agent, the Banks or the Security Trustee to take
proceedings against the Borrower in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
THE FIRST SCHEDULE
CONDITION PRECEDENT DOCUMENTS
PART 1
1. In relation to the Borrower, the Shareholder, the Managing General
Partner, the Initial Charterer, the Subsequent Charterer and the Guarantor
(herein together referred to as the "RELEVANT PARTIES"):
(i) a copy, certified a true copy by a duly authorised
officer of the Borrower, of a Board Resolution of the
Borrower approving the execution, delivery and
performance of each of the Facility Documents to
which it is a party and the terms and conditions
thereof and authorising a named person or persons to
sign each of such Facility Documents;
(ii) a copy, certified a true copy by a duly authorised
officer of the Managing General Partner of the
Shareholder's Certificate of Registration as a
Limited Partnership and its Limited Partnership
Agreement;
(iii) a copy, certified a true copy by a duly authorised
officer of the Relevant Party, of the constitutive
documents of such Relevant Party;
(iv) a copy, certified a true copy by a duly authorised
officer of the Initial Charterer, of a Board
Resolution of the Initial Charterer approving the
execution, delivery and performance of the Initial
Charter and the terms and conditions thereof and
authorising a named person or persons to sign the
Initial Charter;
(v) a copy, certified a true copy by a duly authorised
officer of the Subsequent Charterer, of a Board
Resolution of the Subsequent Charterer approving the
execution, delivery and performance of the Subsequent
Charter and the terms and conditions thereof and
authorising a named person or persons to sign and
deliver the Subsequent Charter;
(vi) a copy, certified a true copy by a duly authorised
officer of the Guarantor of a Board Resolution of the
Guarantor approving the execution, delivery and
performance of the Guarantee and the terms and
conditions thereof and authorising a named person or
persons to sign the Guarantee;
(vii) a certificate of a duly authorised officer of the
Borrower setting out the names and signatures of the
persons authorised to sign, on behalf of the
Borrower, each of the Facility Documents to which it
is a party and any documents to be delivered pursuant
thereto; and
(viii) a copy certified a true copy by a duly authorised
officer of the Borrower of the proforma opening
balance sheet of the Borrower evidencing its capital
structure including the amount of its Working
Capital;
(ix) a certificate of a duly authorised officer of the
Managing General Partner of the Shareholder setting
out the partners (both general and limited) of the
Shareholder; and
(x) a certificate of a duly authorised officer of the
Borrower certifying that the Shareholder is the sole
Shareholder of the Borrower.
2. A copy of the Cayman Islands Exempted Limited Partnership Law and of
each such other law, decree, consent, licence, approval, registration or
declaration as is, in the opinion of counsel to the Banks, necessary to render
the Facility Documents and the Charters legal, valid, binding and enforceable,
to make them admissible in evidence in the Cayman Islands and Panama and to
enable the Borrower lawfully to perform its obligations under the Facility
Documents to which it is a party.
3. An opinion of the Initial Bank's counsel in relation to Panamanian law
in a form satisfactory to the Initial Bank.
4. An opinion of the Initial Bank's Cayman Islands counsel in a form
satisfactory to the Initial Bank.
5. An opinion of the Initial Charterer's internal counsel in a form
satisfactory to the Initial Bank relating to the Initial Charter.
6. An opinion of the Subsequent Charterer's internal counsel in a form
satisfactory to the Initial Bank relating to the Subsequent Charter;
7. An opinion of ▇▇▇▇▇▇▇▇ Chance in a form satisfactory to the Initial
Bank.
8. Evidence that ▇▇▇▇▇▇▇▇ Chance Secretaries Limited has agreed to act as
the agent of the Borrower for the service of process in England.
9. A copy, certified to be a true copy by a duly authorised officer of the
Borrower of the Memorandum of Agreement showing the purchase price of the Vessel
to be $31,000,000.
10. A copy, certified to be a true copy by a duly authorised officer of the
Borrower of each of the Charters.
11. A Guarantee where the Guarantor guarantees the obligations of the
Borrower under this Agreement for a sum not exceeding $2,000,000 in favour of
the Agent on behalf of the Initial Bank.
12. Valid up-to-date class certificates from a classification society
acceptable to the Agent and showing the Vessel to be in a class acceptable to
the Agent, without extension or recommendations.
13. Details of the manager of the Vessel during the Subsequent Charter and
a certified true copy of the Management Agreement in a form acceptable to the
Initial Bank.
14. A copy of the ▇▇▇▇ of Sale relating to the Vessel and any other
documents required to be produced by the Seller or the Borrower pursuant to the
Memorandum of Agreement.
15. Evidence of the discharge of any existing mortgages over the Vessel.
16. Confirmation that the technical management of the Vessel is during the
Subsequent Charter with Universe Tankships (Bermuda) Ltd.
17. An assignment of the Borrower's bank accounts in a form acceptable to
the Agent.
18. A security trust deed whereby the Security Trustee agrees to hold the
benefit of the security created by the mortgage and the assignment of earnings
and insurances and the assignment of accounts referred to in paragraphs 1, 2 and
3 above on trust for the Beneficiaries named therein in a form acceptable to the
Agent.
19. A Priority Agreement between the Borrower, the Banks and the Agent
under this Agreement and the agent and the lenders under the Senior Facility
Agreement.
20. A copy of the Seller's Latest Annual Franchise Tax Receipt ("Tasa
Annual").
21. A letter of undertaking from Poles, Tublin, Patestides & Stratakis that
the Protocol of Delivery and Acceptance of the Vessel shall not be delivered to
The Industrial Bank of Japan, Ltd., until consent of the Agent or its
representative is given.
22. An opinion of the Initial Bank's New York counsel in a form
satisfactory to the Initial Bank.
23. A Letter of Awareness from Neptune Orient Lines relating to the
Subsequent Charter.
PART 2
Each of the following documents duly executed by the Borrower:
1. A first preferred Panamanian ship mortgage over the Vessel granted by
the Borrower in favour of the Security Trustee in a form acceptable to the
Agent.
2. An assignment of earnings and insurances agreement entered into by the
Borrower in favour of the Security Trustee to secure the Borrower's obligations
under this Agreement in a form acceptable to the Agent.
3. All notices to be given under the assignments referred to in 2 above.
4. The Protocol of Delivery and Acceptance of the Vessel duly signed by
the Borrower and the Seller.
5. Evidence that the Vessel has been properly insured and the terms of the
insurances are acceptable to the Agent.
THE SECOND SCHEDULE
NOTICE OF DRAWDOWN
From: Pacific Tankship Ltd.,
To: Christiania Bank og Kreditkasse ASA as Agent
Dear Sirs,
1. We refer to the agreement (the "JUNIOR FACILITY AGREEMENT") dated ____
October 1997 and made between ourselves as borrower, yourselves as agent and
security trustee and Initial Bank. Terms defined in the Junior Facility
Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Junior Facility
Agreement and on ____________, we wish to borrow the amount of ________________
United States Dollars (being an amount equal to the lesser of the amount of the
Facility Amount) upon the terms and subject to the conditions contained therein.
We hereby confirm that the aggregate sum of this proposed drawdown and the
amount drawndown (or to be drawndown) under the Senior Facility Agreement shall
not exceed 75% of the Fair Market Value of the Vessel.
3. We would like the Advance to have a first Interest Period of:
First Choice: _____________________________ months' duration.
Second Choice:* __________________________ months' duration.
4. We further confirm that, at the date hereof, the representations set
out in Clauses 12.1 and 12.2 of the Facility Agreement are true and that no
event which is or may become (with the passage of time, the giving of notice,
the making of any determination under the Facility Agreement or any combination
thereof) an Event of Default has occurred.
5. The proceeds of this drawdown should be credited to our account
No.0007110471 with The Industrial Bank of Japan, Ltd.
Yours faithfully
----------------------------
for and on behalf of
PACIFIC TANKSHIP LTD.,
--------------------------------------------------------------------------------
* Only if the first choice Interest Period is twelve months.
THE THIRD SCHEDULE
FORM OF TRANSFER CERTIFICATE
To: Christiania Bank og Kreditkasse ASA (as Agent) and
Pacific Tankship Ltd.,
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "FACILITY AGREEMENT") dated [ ] whereby a
US$4,500,000 loan facility was made available to [ ] (the "BORROWER")
by the Initial Bank as defined therein in connection with which Christiania
Bank og Kreditkasse ASA acted as Agent and Security Trustee.
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank, Transferee, Bank's
Participation and Amount Transferred are defined in the schedule hereto.
2. The Bank confirms that the Bank's Participation is an accurate summary
of its participation in the Facility Agreement and requests the Transferee to
accept and procure the transfer to the Transferee of a percentage of the Bank's
Participation (equal to the percentage that the Amount Transferred is of the
aggregate of the component amounts (as set out in the Schedule hereto) of the
Bank's Participation) by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of notices specified in
the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 26.2 of the Facility Agreement so as to take effect in accordance with
the terms thereof on the Transfer Date or on such later date as may be
determined in accordance with the terms thereof.
4. The Transferee warrants that it has received a copy of the Facility
Agreement together with such other information as it has required in connection
with this transaction and that it has not relied and will not hereafter rely on
the Bank to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Bank to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower.
5. The Transferee hereby undertakes with the Bank and each of the other
parties to the Facility Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Facility Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of the Facility Agreement or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower or
for the performance and observance by the Borrower of any of its obligations
under the Facility Agreement or any document relating thereto and any and all
such conditions and warranties, whether express or implied by law or otherwise,
are hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the Facility
Agreement (or any document relating thereto) shall oblige the Bank to (i) accept
a re-transfer from the Transferee of the whole or any part of its rights,
benefits and/or obligations under the Facility Agreement transferred pursuant
hereto or (ii) support any losses directly or indirectly sustained or incurred
by the Transferee for any reason whatsoever including, without limitation, the
non-performance by the Borrower or any other party to the Facility Agreement (or
any document relating thereto) of its obligations under any such document. The
Transferee hereby acknowledges the absence of any such obligations under any
such document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) or (ii) above.
8. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English law.
SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Bank's Participation:
Bank's portion of the Loan:
Bank's Commitment:
5. Amount Transferred:
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
Address:
EXECUTION PAGE
THE BORROWER
PACIFIC TANKSHIP LTD.,
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Address: c/o General Maritime Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇
▇▇▇
Attention:
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
THE AGENT AND SECURITY TRUSTEE
CHRISTIANIA BANK OG KREDITKASSE ASA
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Attention:
Tel: ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇
THE INITIAL BANK
CHRISTIANIA BANK OG KREDITKASSE ASA
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Attention: Shipping Department
Tel: ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇