Exhibit 10.6
FURTHER AMENDED AND RESTATED LOAN FACILITY AGREEMENT
DATED: 26 JUNE 2003
BETWEEN:-
(1) NORSK TEEKAY HOLDINGS LTD which is a company incorporated according to the
law of the Xxxxxxxx Islands with its registered office at c/o Trust Company
Complex, Ajeltake Road, Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx Xxxxxxx XX-00000
and its principal place of business at Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxx Xxxxxx & Blake Road, Nassau, The Bahamas ("THE BORROWER");
and
(2) the banks and financial institutions listed in Schedule 1, each acting
through its office at the address indicated against its name in Schedule 1
(together "THE BANKS" and each a "BANK"); and
(3) DNB NOR BANK ASA, acting as facility agent and security trustee (in that
capacity "THE AGENT"); and
(4) CITIGROUP GLOBAL MARKETS LIMITED, DNB NOR BANK ASA and NORDEA BANK FINLAND
PLC, NEW YORK BRANCH each acting as a mandated lead arranger through its
office and at the address indicated against its name in Schedule 7
(together "THE ARRANGERS" and each "AN ARRANGER"); and
(5) CITIGROUP GLOBAL MARKETS LIMITED and DNB NOR BANK ASA each acting as a
joint book runner through its office and at the address indicated against
its name in Schedule 7 (together "THE BOOK RUNNERS").
WHEREAS:-
Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate principal amount not exceeding four hundred and fifty
five million Dollars ($455,000,000) in respect of an initial secured reducing
facility of five hundred and fifty million Dollars ($550,000,000) which
originally assisted the Borrower in refinancing the Bridge Facility and all
other sums due and payable under or pursuant to the Bridge Facility Agreement
and is now for the Borrower's other general corporate purposes.
IT IS AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
1.1.1 "THE ADDRESS FOR SERVICE" means c/o Teekay Shipping (UK) Ltd of
0xx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx or, in
relation to any of the Security Parties, such other address in
England and Wales as that Security Party may from time to time
designate by no fewer than ten Business Days' written notice to
the Agent.
1.1.2 the "ADVANCE DATE", in relation to any Drawing, means the date
on which that Drawing is advanced by the Banks to the Borrower
pursuant to Clause 2.
1.1.3 "APPROVED BROKERS" means X. Xxxxxxxx & Co. Ltd, Xxxxxxx Xxxxxx &
Young Shipbrokers Ltd, Fearnley AS, X. X. Xxxxxx AS and P. Bassoe
AS.
1.1.4 "ASSIGNMENT" means the deed of assignment of Intercompany
Indebtedness referred to in Clause 8.1.1.
1.1.5 "BAREBOAT CHARTERER" means TNOL in its capacity as bareboat
charterer of the TNOL Vessels and/or any other bareboat charterer
of the Vessels who is acceptable to the Majority Banks.
1.1.6 "THE BORROWER'S OBLIGATIONS" means all of the liabilities and
obligations of the Borrower to the Finance Parties under or
pursuant to the Borrower's Security Documents, whether actual or
contingent, present or future, and whether incurred alone or
jointly or jointly and severally with any other and in whatever
currency, including (without limitation) interest, commission and
all other charges and expenses.
1.1.7 "THE BORROWER'S SECURITY DOCUMENTS" means those of the Security
Documents to which the Borrower is or is to be a party.
1.1.8 "BREAK COSTS" means all documented costs, losses, premiums or
penalties incurred by any of the Finance Parties in the
circumstances contemplated by Clause 17.4 or as a result of any
of them receiving any
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prepayment of all or any part of the Facility (whether pursuant
to Clause 5.2 or otherwise) or any other payment under or in
relation to the Security Documents on a day other than the due
date for payment of the sum in question, and includes (without
limitation) any losses or costs incurred in liquidating or
re-employing deposits from third parties acquired to effect or
maintain the Facility, and any liabilities, expenses or losses
incurred by any of the Finance Parties in terminating or
reversing, or otherwise in connection with, any interest rate
and/or currency swap, transaction or arrangement entered into by
any of the Finance Parties to hedge any exposure arising under
this Agreement, or in terminating or reversing, or otherwise in
connection with, any open position arising under this Agreement.
1.1.9 "BRIDGE FACILITY" means the five hundred million Dollar
($500,000,000) short term facility made available by the Bridge
Lenders to the Borrower pursuant to the Bridge Facility
Agreement.
1.1.10 "BRIDGE FACILITY AGREEMENT" means the USD500,000,000 Revolving
Credit Facility Agreement dated 27 March 2003 made between the
Borrower as borrower, the Bridge Lenders, and the Agent as agent
on behalf of the Bridge Lenders pursuant to which the Bridge
Lenders made the Bridge Facility available to the Borrower
subject to and upon the terms and conditions contained therein
1.1.11 "BRIDGE LENDERS" means the banks listed in Exhibit 1 of the
Bridge Facility Agreement.
1.1.12 "BUSINESS DAY" means a day on which banks are open for the
transaction of business of the nature contemplated by this
Agreement (and not authorised by law to close) in Xxx Xxxx Xxxx,
Xxxxxx Xxxxxx xx Xxxxxxx; Xxxxxx, Xxxxxxx; Oslo, Norway; and any
other financial centre which the Agent may consider appropriate
for the operation of the provisions of this Agreement.
1.1.13 "CHANGE OF CONTROL" means that TSC and the Guarantor between
them shall cease, for any reason whatsoever, to own or control
directly or indirectly, all of the shares of Navion, NOL and/or
TNOL.
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1.1.14 "COMMISSION RATE" means thirty two point five per cent (32.5%)
of the Margin, per annum.
1.1.15 "COMMITMENT" means, in relation to each Bank, the amount of the
Facility which that Bank agrees to advance to the Borrower as its
several liability as indicated against the name of that Bank in
Schedule 1, as reduced from time to time in accordance with
Clause 2.4, or, where the context permits, the amount of the
Facility advanced by that Bank and remaining outstanding.
1.1.16 "COMMITMENT COMMISSION" means the commitment commission to be
paid by the Borrower to the Agent on behalf of the Banks pursuant
to Clause 7.2.
1.1.17 "COMMITMENT TERMINATION DATE" means the date falling one month
prior to the Termination Date.
1.1.18 a "COMMUNICATION" means any notice, approval, demand, request
or other communication from one party to this Agreement to any
other party to this Agreement.
1.1.19 "THE COMMUNICATIONS ADDRESS" means x/x Xxxxxx Xxxxxxxx (Xxxxxx)
Xxx, Xxxxx 0000, Xxxxxxx 5, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X.,
Xxxxxx X0X 0X0, fax no: x000 000 0000 marked for the attention of
Director, Finance.
1.1.20 "COVENANTING GROUP" means the Borrower and its Subsidiaries,
NOL and TNOL.
1.1.21 "CURRENCY OF ACCOUNT" means, in relation to any payment to be
made to a Finance Party pursuant to any of the Security
Documents, the currency in which that payment is required to be
made by the terms of the relevant Security Document.
1.1.22 "DEFAULT RATE" means the rate which is the aggregate of (i) two
per centum (2%) per annum (ii) the Margin (iii) LIBOR and (iv)
the Mandatory Cost.
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1.1.23 "DOLLARS" and "$" each means available and freely transferable
and convertible funds in lawful currency of the United States of
America.
1.1.24 "DRAWDOWN NOTICE" means a notice complying with Clause 2.3.
1.1.25 "DRAWING" means a part (or, if requested and available, all) of
the Facility advanced by the Banks to the Borrower in accordance
with Clause 2.
1.1.26 "EARNINGS", in relation to a Vessel, means all hires including
(without limitation) all time charter hire and bareboat charter
hire, freights, pool income and other sums payable to or for the
account of the Owner or Bareboat Charterer in respect of that
Vessel including (without limitation) all remuneration for
salvage and towage services, demurrage and detention moneys,
contributions in general average, compensation in respect of any
requisition for hire and damages and other payments (whether
awarded by any court or arbitral tribunal or by agreement or
otherwise) for breach, termination or variation of any contract
for the operation, employment or use of that Vessel.
1.1.27 "ENCUMBRANCE" means any mortgage, charge, pledge, lien,
assignment, hypothecation, preferential right, option, title
retention or trust arrangement or any other agreement or
arrangement which, in any of the aforementioned instances, has
the effect of creating security.
1.1.28 "EVENT OF DEFAULT" means any of the events set out in Clause
12.2.
1.1.29 "EXECUTION DATE" means the date on which this Agreement is
executed by each of the parties hereto.
1.1.30 "FACILITY" means the reducing revolving credit facility made
available by the Banks to the Borrower pursuant to this
Agreement.
1.1.31 "THE FACILITY OUTSTANDINGS" at any time means the total of all
Drawings made at that time, to the extent not reduced by
repayments, prepayments and voluntary reductions.
1.1.32 "THE FACILITY PERIOD" means the period beginning on the
Execution Date and ending on the date when the whole of the
Indebtedness has
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been repaid in full and the Borrower has ceased to be under any
further actual or contingent liability to the Finance Parties
under or in connection with the Security Documents.
1.1.33 "THE FEE LETTERS" means the letters from the Agent, the
Arrangers and the Book Runners as agreed and accepted by the
Borrower and/or the Guarantor setting out certain fees,
commissions and other sums payable by the Borrower and/or the
Guarantor in connection with the Facility.
1.1.34 "THE FINANCE PARTIES" means the Banks, the Agent, the Arrangers
and the Book Runners.
1.1.35 "FIRST QUALIFYING SECURITY ASSIGNMENT" means the deed of
assignment of the First Qualifying Security Documents dated 30
September 2004 executed by (inter alios) the Borrower, NOL and
the Intercompany Agent in favour of the Agent.
1.1.36 "FIRST QUALIFYING SECURITY DOCUMENTS" means the NOL Guarantee
and the Mortgages.
1.1.37 "FIRST REDUCTION DATE" means the earlier to occur of (i) six
months after the first Advance Date to occur after 30 September
2006 and (ii) 30 April 2007.
1.1.38 "FREE LIQUIDITY", means cash, cash equivalents and marketable
securities of maturities less than one (1) year to which the
Guarantor Group shall have free, immediate and direct access each
as reflected in the Guarantor's most recent quarterly management
accounts forming part of the Guarantor's Accounts.
1.1.39 "GAAP" means the generally accepted accounting principles in
the United States of America.
1.1.40 "THE GUARANTEE" means the guarantee and indemnity of the
Guarantor in respect of the Borrower's Obligations referred to in
Clause 8.2.3.
1.1.41 "GUARANTOR GROUP" means the Guarantor and each of its
Subsidiaries (including but not limited to the Borrower).
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1.1.42 "GUARANTOR" means Teekay Offshore Operating L.P., a limited
partnership formed under the laws of the Xxxxxxxx Islands and
with its registered office at Trust Company Complex, Ajeltake
Island, XX Xxx 0000, Xxxxxx, Xxxxxxxx Xxxxxxx XX-000000.
1.1.43 "GUARANTOR'S ACCOUNTS" means either the annual consolidated
financial statements of the Guarantor prepared in accordance with
GAAP comprising a profit and loss account, balance sheet and cash
flow statement and audited by Ernst & Young or such other first
class firm of accountants as may be acceptable to the Agent or
(as the context may require) the quarterly consolidated financial
statements of the Guarantor which shall be unaudited but shall
also be prepared in accordance with GAAP.
1.1.44 "THE INDEBTEDNESS" means the Facility Outstandings; all other
sums of any nature including costs (together with all interest on
any of those sums) which from time to time may be payable by the
Borrower to the Finance Parties pursuant to the Security
Documents; any damages payable as a result of any breach by the
Borrower of any of the Security Documents; and any damages or
other sums payable as a result of any of the obligations of the
Borrower under or pursuant to any of the Security Documents being
disclaimed by a liquidator or any other person, or, where the
context permits, the amount thereof for the time being
outstanding.
1.1.45 "INSURANCES", in relation to a Vessel, means all policies and
contracts of insurance (including but not limited to hull and
machinery, all entries in protection and indemnity or war risks
associations) which are from time to time taken out or entered
into in respect of or in connection with that Vessel or her
increased value and (where the context permits) all benefits
thereof, including all claims of any nature and returns of
premium.
1.1.46 "INTERCOMPANY AGENT" means DnB NOR Bank ASA in its capacity as
agent under the Intercompany Loan Agreement.
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1.1.47 "INTERCOMPANY BORROWER" means Norsk Teekay AS being a company
incorporated according to the laws of Norway with Enterprise No.
985 030 235.
1.1.48 "INTERCOMPANY INDEBTEDNESS" means that portion of the Facility
on lent by the Borrower to the Intercompany Borrower upon the
terms and conditions of the Intercompany Loan Agreement.
1.1.49 "INTERCOMPANY LOAN AGREEMENT" means the agreement dated 26 June
2003 as amended and restated by an agreement dated 30 September
2004 and as further amended and restated by an agreement dated 5
October 2006 each made between the Borrower as lender, the
Intercompany Borrower and the Intercompany Agent under which the
Borrower has lent the Intercompany Indebtedness to the
Intercompany Borrower.
1.1.50 "INTEREST PAYMENT DATE" means each date for the payment of
interest in accordance with Clause 6.
1.1.51 "INTEREST PERIOD" means each interest period selected by the
Borrower or agreed by the Agent pursuant to Clause 6.
1.1.52 "LAW" means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other legislative
or quasi-legislative rule or measure, or any order or decree of
any government, judicial or public or other body or authority, or
any directive, code of practice, circular, guidance note or other
direction issued by any competent authority or agency (whether or
not having the force of law).
1.1.53 "LIBOR" means the rate, rounded to the nearest four decimal
places downwards (if the digit displayed in the fifth decimal
place is 1,2,3 or 4) or upwards (if the digit displayed in the
fifth decimal place is 5,6,7,8 or 9) displayed on Reuters page
LIBOR 01 (or such other page or pages which replace(s) such page
for the purposes of displaying offered rates of leading banks,
for deposits in Dollars of amounts equal to the amount of the
relevant Drawing for a period equal in length to the relevant
Interest Period or if there is no such display rate then
available for Dollars for an amount comparable to the Drawing,
the arithmetic mean
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(rounded upwards, if necessary, to the nearest whole multiple of
one-sixteenth per centum (1/16%)) of the respective rates
notified to the Agent by each of the Reference Banks as the rate
at which it is offered deposits in Dollars and for the required
period by prime banks in the London Interbank Market.
1.1.54 "MAJORITY BANKS" means any one or more Banks whose combined
Proportionate Shares exceed sixty six and two thirds per centum
(66 2/3%).
1.1.55 "MANDATORY COST" means for each Bank to which it applies, the
cost imputed to that Bank of compliance with the mandatory liquid
asset requirements of the Bank of England and/or the banking
supervision or other costs imposed by the Financial Services
Authority, determined in accordance with Schedule 6 (CALCULATION
OF THE MANDATORY COST).
1.1.56 "MARGIN" means nought point six two five (0.625) per cent per
annum.
1.1.57 "MATERIAL SUBSIDIARY" means:
any Subsidiary of the Guarantor whose assets, as determined in
accordance with GAAP and as shown from the most recent financial
statements available to the Agent relating to it, as multiplied
by the Relevant Percentage in respect of such Subsidiary, equal
or exceed 10% of the aggregate value of the assets of the
Guarantor Group as determined in accordance with GAAP and as
shown from the most recently available financial statements of
the Guarantor Group,
provided that:
(i) in respect of any Subsidiary of the Guarantor, only the
value of its assets as multiplied by the Relevant Percentage
in respect of such Subsidiary shall be taken into account in
the computation of the value of the assets of the Guarantor
Group; and
(ii) a statement by the auditors of the Guarantor to the effect
that, in their opinion, a Subsidiary of the Guarantor is or
is not or was or was not at any particular time a Material
Subsidiary shall, in the
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absence of manifest error, be conclusive and binding on each
of the parties to this Agreement.
1.1.58 "THE MAXIMUM FACILITY AMOUNT" means the amount of the aggregate
Commitments (stated in Dollars) subject to any reductions
effected in accordance with Clauses 2.4, 15.7 and 15.8.
1.1.59 "MORTGAGES" means the first priority statutory ship mortgages
over the Vessels each dated 30 September 2004 together with deeds
of covenants collateral thereto made between NOL and the Borrower
or NOL, the Borrower and the Intercompany Agent, as the case may
be.
1.1.60 "NAVION" means Teekay Norway AS (formerly known as Navion ASA
with Enterprise No. 979199325) of Xxxxxx 0, X-0000 Xxxxxxxxx,
Xxxxxx.
1.1.61 "NAVION GROUP" means the Borrower, TNOL, the Intercompany
Borrower, Navion and Navion's Subsidiaries.
1.1.62 "NOL" means Navion Offshore Loading AS being a company
incorporated according to the laws of Norway with Enterprise No.
984 837 771.
1.1.63 "NOL GUARANTEE" means the guarantee and indemnity dated 30
September 2004 executed by NOL in favour of the Intercompany
Agent.
1.1.64 "OWNER" means NOL and/or any other owner of a Vessel which is
acceptable to the Majority Banks and which secures all or any
part of the Indebtedness.
1.1.65 "PERMITTED LIENS" means (i) any Encumbrance which has the prior
written approval of the Agent acting upon the instructions of all
the Banks or (ii) any Encumbrance arising either by operation of
law or in the ordinary course of the business of the relevant
Security Party which is discharged in the ordinary course of
business or (iii) any Encumbrance over assets acquired subject to
that Encumbrance, provided the Encumbrance is discharged within
three (3) months of the date of acquisition of the asset.
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1.1.66 "POTENTIAL EVENT OF DEFAULT" means any event which, with the
giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an Event
of Default.
1.1.67 "PRO RATA INSURANCE PROCEEDS AMOUNT" means, in respect of each
Vessel, a figure equal to (x) a fraction in which (i) the
numerator is the amount of the insurance proceeds payable in
respect of such Vessel in the event of a Total Loss and (ii) the
denominator is the aggregate market value of all the Vessels
(based on the Valuations) multiplied by (y) the Maximum Facility
Amount.
1.1.68 "PROCEEDINGS" means any suit, action or proceedings begun by
any of the Finance Parties arising out of or in connection with
the Security Documents.
1.1.69 "PROPORTIONATE SHARE" means, for each Bank, the percentage
indicated against the name of that Bank in Schedule 1, as amended
by any Transfer Certificate executed from time to time.
1.1.70 "QUALIFYING SECURITY" means together the First Qualifying
Security Documents and any other security granted in respect of
the Intercompany Indebtedness which is assigned to the Agent as
security for the Indebtedness.
1.1.71 "QUALIFYING SECURITY PARTIES" means any party who grants
Qualifying Security.
1.1.72 "REFERENCE BANKS" means DnB Nor Bank ASA, Citibank N.A. and
Nordea Bank Norge ASA.
1.1.73 "RELEVANT PERCENTAGE" means, in respect of any Subsidiary of
the Guarantor at any time, the percentage of the equity share
capital or the partnership capital, as the case may be, of such
Subsidiary which is beneficially owned (free from Encumbrances)
by the Guarantor at such time.
1.1.74 "REQUISITION COMPENSATION", in relation to a Vessel, means all
compensation or other money which may from time to time be
payable to an Owner and/or a Bareboat Charterer as a result of
that Vessel being
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requisitioned for title or in any other way compulsorily acquired
(other than by way of requisition for hire).
1.1.75 "THE SECURITY DOCUMENTS" means this Agreement, the Shares
Charge, the Assignment, the First Qualifying Security Assignment,
the Guarantee, the TNOL Assignment and Subordination Agreements,
or (where the context permits) any one or more of them, and any
other agreement or document which may at any time be executed as
security for the payment of all or any part of the Indebtedness.
1.1.76 "SECURITY PARTIES" means, at any relevant time, the Borrower,
the Intercompany Borrower, the Guarantor, TNOL, NOL and any other
party who may at any time during the Facility Period be liable
for, or provide security for, all or any part of the
Indebtedness, and "SECURITY PARTY" means any one of them.
1.1.77 "SHARES CHARGE" means the assignment of the charge over the
issued share capital of Navion referred to in Clause 8.1.2.
1.1.78 "SUBSEQUENT REDUCTION DATES" means each date falling at
consecutive six monthly intervals after the previous Subsequent
Reduction Date which in the case of the first Subsequent
Reduction Date shall be six months after the First Reduction
Date.
1.1.79 "SUBORDINATED DEBT" means (based on the Borrower's Accounts)
any inter-company loan (including interest thereon) which has a
term beyond the Termination Date and which shall be treated as
equity in Navion for financial covenant test purposes.
1.1.80 "SUBSIDIARY" means a subsidiary undertaking, as defined in
section 736 Companies Act 1985 or any analogous definition under
any other relevant system of law.
1.1.81 "TAXES" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related interest
and penalties) and any restrictions or conditions resulting in
any charge, other than taxes on the overall net income of a
Finance Party or branch thereof, and "TAX" and "TAXATION" shall
be interpreted accordingly.
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1.1.82 "THE TERMINATION DATE" means 31 October 2014.
1.1.83 "TKO" means Teekay Offshore Partners L.P. a master limited
partnership formed or to be formed according to the laws of The
Xxxxxxxx Islands and to be publicly listed.
1.1.84 "TNOL" means Teekay Navion Offshore Loading PTE Ltd being a
company incorporated according to the laws of Singapore.
1.1.85 "TNOL ASSIGNMENT AND SUBORDINATION AGREEMENTS" means the deeds
of assignment of Insurances and Earnings and subordination of
rights in relation to the TNOL Vessels each dated 28 January 2005
and made between TNOL, NOL and the Agent.
1.1.86 "TNOL BAREBOAT CHARTERS" means the bareboat charterparties
dated 28 January 2005 and entered into between NOL as owner and
TNOL as Bareboat Charterer in respect of the TNOL Vessels.
1.1.87 "TNOL VESSELS" means the Vessels listed in Schedule 3.
1.1.88 "TOTAL DEBT" means the aggregate of:-
(a) the amount calculated in accordance with GAAP shown as each
of "long term debt", "short term debt" and "current portion
of long term debt" on the latest consolidated balance sheet
of the Guarantor; and
(b) the amount of any liability in respect of any lease or hire
purchase contract entered into by the Guarantor or any of
its Subsidiaries which would, in accordance with GAAP, be
treated as a finance or capital lease (excluding any amounts
applicable to leases to the extent that the lease
obligations are secured by a security deposit which is held
on the balance sheet under "RESTRICTED CASH").
1.1.89 "TOTAL LOSS", in relation to a Vessel means:-
(a) an actual, constructive, arranged, agreed or compromised
total loss of that Vessel; or
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(b) the requisition for title, compulsory acquisition,
nationalisation or expropriation of that Vessel by or on
behalf of any government or other authority (other than by
way of requisition for hire); or
(c) the capture, seizure, arrest, detention or confiscation of
that Vessel, unless the Vessel is released and returned to
the possession of its Owner or Bareboat Charterer (as the
case may be) within two months after the capture, seizure,
arrest, detention or confiscation in question.
1.1.90 "TRANSACTION DOCUMENTS" means together the Intercompany Loan
Agreement, the Security Documents, the Qualifying Security and
the TNOL Bareboat Charters.
1.1.91 "TRANSFER CERTIFICATE" means a certificate materially in the
form set forth in Schedule 4 signed by a Bank and a Transferee
whereby:-
(a) such Bank seeks to procure the transfer to such Transferee
of all or a part of such Bank's rights and obligations under
this Agreement upon and subject to the terms and conditions
set out in Clause 14; and
(b) such Transferee undertakes to perform the obligations it
will assume as a result of delivery of such certificate to
the Agent as is contemplated in Clause 14.
1.1.92 "TRANSFER DATE" means, in relation to any Transfer Certificate,
the date for the making of the transfer specified in the schedule
to such Transfer Certificate.
1.1.93 "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 under this Agreement.
1.1.94 "THE TRUST PROPERTY" means:-
(a) the benefit of Clause 8 and the covenants contained in
Clause 9.3; and
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(b) all benefits arising under (including, without limitation,
all proceeds of the enforcement of) each of the Security
Documents (other than this Agreement), with the exception of
any benefits arising solely for the benefit of the Agent).
1.1.95 "TSC" means Teekay Shipping Corporation being a corporation
incorporated according to the laws of the Xxxxxxxx Islands.
1.1.96 "VALUATION" means in relation to a Vessel, the arithmetic mean
of the written valuations of that Vessel expressed in Dollars
prepared by two of the Approved Brokers (or such other firms of
reputable independent shipbrokers as may be acceptable to the
Majority Banks), one appointed by the Agent and the other
appointed by the Borrower, unless either the Agent or the
Borrower disagrees with such arithmetic average, in which event
the two shipbrokers shall appoint a third firm of Approved
Brokers (or such other firm of reputable independent shipbrokers
as may be acceptable to the Majority Banks) and the valuation of
the Vessel shall be the arithmetic mean of all three such
valuations. Such valuations shall be prepared at the Borrower's
expense, without a physical inspection, on the basis of a sale
for prompt delivery for cash at arm's length between a willing
buyer and a willing seller without the benefit of any
charterparty or other engagement.
1.1.97 "THE VESSELS" means the vessels listed in Schedule 2, and any
other vessel which is used as security for the Indebtedness and
everything now or in the future belonging to them on board and
ashore (each a "VESSEL").
1.2 INTERPRETATION
In this Agreement:-
1.2.1 words denoting the plural number include the singular and vice
versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and vice
versa;
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1.2.3 references to Recitals, Clauses, Schedules and Appendices are
references to recitals and clauses of, and schedules and
appendices to, this Agreement;
1.2.4 references to this Agreement include the Recitals, the Schedules
and the Appendices;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be
ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation, to
all or any of the Transaction Documents) are, unless the context
otherwise requires, references to that document as amended,
supplemented, novated, reconfirmed, amended and restated or
replaced from time to time;
1.2.7 references to statutes or provisions of statutes are references
to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted;
1.2.8 references to any of the Finance Parties include its successors,
transferees and assignees; and
1.2.9 references to times of day are to Oslo time.
2 THE FACILITY AND ITS PURPOSE
2.1 AGREEMENT TO LEND Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of the
Security Documents, each of the Banks agrees to advance to the
Borrower its Commitment of an aggregate principal amount not exceeding
the Maximum Facility Amount to be used by the Borrower for the
purposes referred to in the Recital.
2.2 DRAWINGS Subject to satisfaction by the Borrower of the conditions set
out in Clause 3.1 (in respect of the first Drawing), Clause 3.3 (in
respect of all subsequent Drawings), and subject to Clause 2.3, and
provided that the maximum aggregate amount of the Facility
Outstandings at any given time during the Facility Period shall not
exceed the Maximum Facility Amount, each Drawing
16
shall be advanced to the Borrower, in each case by the Agent
transferring the amount of the Drawing to such account of the Borrower
as the Borrower shall notify to the Agent in the relevant Drawdown
Notice by such same day method of funds transfer as the Agent shall
select.
2.3 ADVANCE OF DRAWINGS Each Drawing shall be advanced in Dollars. Each
Drawing shall be advanced on a Business Day, provided that the
Borrower shall have given to the Agent not more than ten and not fewer
than four Business Days' notice in writing materially in the form set
out in Schedule 5 of the required Advance Date of the Drawing in
question and provided that the requested Drawing would not cause a
breach of Clause 2.5. Each Drawdown Notice once given shall be
irrevocable and shall constitute a warranty by the Borrower that:-
2.3.1 all conditions precedent to the advance of the Drawing requested
in that Drawdown Notice will have been satisfied on or before the
Advance Date requested;
2.3.2 no Event of Default or Potential Event of Default has occurred
or will then have occurred; and
2.3.3 no Event of Default or Potential Event of Default will result
from the advance of the Drawing in question.
The Agent shall promptly notify each Bank of the receipt of each
Drawdown Notice, following which each Bank will make its Proportionate
Share of the amount of the requested Drawing available to the Borrower
through the Agent on the Advance Date requested.
2.4 FACILITY REDUCTION
2.4.1 The amount of the Facility available to the Borrower for drawing
under this Agreement shall be four hundred and fifty five million
Dollars ($455,000,000) (reduced from the initial Facility of five
hundred and fifty million Dollars $550,000,000) which shall be
available for drawing from 5 October 2006 until the First
Reduction Date. On the First Reduction Date and on each of the
fifteen Subsequent Reduction Dates the amount of the Facility
available for drawing shall be reduced in accordance with the
schedule of reductions set forth in Schedule 8. In the event of a
Change of Control the amount of the Facility available for
drawing shall
17
be reduced to zero and any outstanding Drawings shall be
immediately repayable. On the Termination Date the Facility
available shall be reduced to zero. The mandatory reductions in
the amount of the Facility available for drawing required
pursuant to this Clause will be made in the amounts and at the
times specified whether or not the Maximum Facility Amount is
reduced pursuant to Clause 2.4.3, Clause 2.4.4, Clause 2.4.5,
Clause 5.2, Clause 15.7 or Clause 15.8. Any mandatory reductions
pursuant to Clause 2.4.3 (sale) or Clause 2.4.4 (Total Loss)
shall be applied to the remaining mandatory reductions hereunder
on a pro rata basis.
2.4.2 The Borrower may voluntarily cancel the Maximum Facility Amount
in whole or in part in integral multiples of five million Dollars
($5,000,000), provided that it has first given to the Agent not
fewer than five (5) Business Days' prior written notice expiring
on a Business Day of its desire to reduce the Maximum Facility
Amount. Any such reduction in the Maximum Facility Amount shall
not be reversed. Any voluntary reduction in the Maximum Facility
Amount pursuant to this Clause shall be applied to the remaining
mandatory reductions under Clause 2.4.1 on a pro rata basis.
2.4.3 In the event of a sale or disposal of a Vessel or the sale or
disposal of any other asset owned by any member of the Navion
Group as at the date hereof or which is the subject of Qualifying
Security and where the net sales proceeds of such sales of other
assets in any twelve (12) month period exceeds five million
Dollars ($5,000,000) (or the equivalent in any other currency),
the Maximum Facility Amount shall be reduced on the date of
receipt of such proceeds by the amount of such net sale or
disposal proceeds (which in the case of a Vessel must be proceeds
received from a commercial sale or disposal at arms length for
full consideration) (the "NET PROCEEDS") unless either:-
(i) the Vessel or asset in question remains owned by a member of
the Navion Group; or
(ii) the Vessel or asset in question is replaced within one
hundred and twenty (120) days of the sale with a similar
vessel or asset being
18
in all respects acceptable to all of the Finance Parties in
their absolute discretion,
and in either case any security held by the Agent (whether
directly or indirectly) over such Vessel or asset is
reconstituted immediately after the sale to the new owner or over
the replacement asset (as the case may be) in substantially
identical form, and the Agent obtains favourable legal opinions
in respect of such reconstituted security. For any period
commencing on the date of the sale or disposal of a Vessel or
other relevant asset and ending on the earlier of (a) the date
falling one hundred and twenty (120) days thereafter and (b) the
date on which a replacement Vessel or asset is acquired in
accordance with the provisions of this Clause, then, at the
Borrower's option, either:-
(a) the Net Proceeds shall be placed in such account as the
Agent may reasonably specify and the Borrower shall execute
and deliver or cause to be executed and delivered (as the
case may be) a first priority charge over the Net Proceeds
in favour of the Agent on behalf of the Finance Parties or,
if applicable, in favour of the Intercompany Agent who will
assign such charge to the Agent, in each case in such form
as the Agent may reasonably specify and the Net Proceeds and
the said deed of charge would (subject to no Event of
Default or Potential Event of Default then being in
existence) be released at the end of such period; or
(b) a part of the Maximum Facility Amount equivalent to the Net
Proceeds (the "UNAVAILABLE PORTION") shall be unavailable
for drawing. If the aggregate Drawings then advanced exceed
the Maximum Facility Amount less the Unavailable Portion,
the Borrower shall promptly make such prepayment as may be
required to ensure that the aggregate Drawings then advanced
are equal to or less than the Maximum Facility Amount less
the Unavailable Portion. For the avoidance of doubt,
Commitment Commission shall continue to accrue on the
Unavailable Portion for such period.
19
2.4.4 In the event that any Vessel becomes a Total Loss, on the
earlier to occur of (a) the date of receipt of the proceeds of
the Total Loss and (b) the date falling one hundred and eighty
(180) days after the occurrence of the Total Loss (the "REDUCTION
DATE"), the Maximum Facility Amount shall (subject to the proviso
hereto) reduce by the Pro Rata Insurance Proceeds Amount in
respect of such Vessel. Any such reductions in the Maximum
Facility Amount shall not be reversed. If, as a result of any
reduction in the Maximum Facility Amount pursuant to this Clause
the Facility Outstandings exceed the Maximum Facility Amount, the
Borrower shall, on the earlier to occur of (a) the one hundred
and eightieth day after the date of such Total Loss occurring and
(b) the date on which the relevant Owner or the Bareboat
Charterer (as the case may be) receives the proceeds of such
Total Loss, prepay such amount of the Facility Outstandings as
will ensure that the Facility Outstandings are not greater than
the Maximum Facility Amount. Any such prepayment shall not be
reborrowed and Clause 5.3 shall apply to any such prepayment.
PROVIDED ALWAYS that if there is an investment in a substitute
vessel acceptable to all of the Banks within one hundred and
twenty (120) days of the Reduction Date, and security over such
substitute vessel acceptable to all of the Banks is also executed
and delivered within one hundred and twenty (120) days of the
Reduction Date, then the reduction in the Maximum Facility Amount
shall not apply.
2.4.5 If at any time during the Facility Period TSC ceases to own a
minimum of fifty one per cent (51%) of the voting rights of
Teekay Offshore GP L.L.C, the general partner of TKO which will,
following the public listing of, and offering for TKO, own a
minimum of fifty one per cent (51%) of the voting rights of
Teekay Offshore Operating GP L.L.C, the Maximum Facility Amount
shall be immediately reduced to zero and the Borrower shall
immediately prepay the Indebtedness. The provisions of Clause 5.3
shall apply to any prepayment made under or pursuant to this
Clause. Any reduction in the Maximum Facility Amount pursuant to
this Clause shall be permanent and non reversible.
2.4.6 To the extent that repayments or prepayments made by the
Borrower to the Agent in accordance with this Agreement reduce
the Facility Outstandings to less than the Maximum Facility
Amount, the Borrower
20
shall again be entitled to make Drawings up to the Commitment
Termination Date in accordance with and subject to the terms of
this Agreement. Any part of the Facility which is undrawn on the
Commitment Termination Date shall be automatically cancelled.
2.4.7 Simultaneously with each reduction of the Maximum Facility
Amount in accordance with Clause 2.4.1, Clause 2.4.2, Clause
2.4.3, Clause 2.4.4 or Clause 2.4.5 (as the case may be), the
Commitment of each Bank will reduce so that the Commitments of
the Banks in respect of the reduced Maximum Facility Amount
remain in accordance with their respective Proportionate Shares.
2.5 RESTRICTIONS ON DRAWINGS The Borrower shall not be entitled to make
more than one Drawing on any Business Day and no more than seven (7)
Drawings may be outstanding at any one time during the Facility
Period. Each Drawing shall be of an amount of not less than ten
million Dollars ($10,000,000) and in integral multiples of five
million Dollars ($5,000,000) or the undrawn balance of the Facility.
If at any time during the Facility Period the Facility Outstandings
exceed the Maximum Facility Amount then available or if a proposed
Drawing added to the Facility Outstandings would result in the Maximum
Facility Amount being exceeded then the Borrower shall immediately pay
to the Agent on behalf of the Banks such amounts as will ensure that
the Facility Outstandings are equal to or less than the Maximum
Facility Amount then available.
2.6 TERMINATION DATE No Bank shall be under any obligation to advance all
or any part of its Commitment after the Commitment Termination Date.
2.7 SEVERAL OBLIGATIONS The obligations of the Banks under this Agreement
are several. The failure of a Bank to perform its obligations under
this Agreement shall not affect the obligations of the Borrower to any
Finance Party nor shall any Finance Party be liable for the failure of
another Bank to perform any of its obligations under or in connection
with this Agreement.
2.8 APPLICATION OF FACILITY Without prejudice to the obligations of the
Borrower under this Agreement, no Finance Party shall be obliged to
concern itself with the application of the Facility by the Borrower.
21
2.9 LOAN FACILITY AND CONTROL ACCOUNTS The Agent will open and maintain
such loan facility account or such other control accounts as the Agent
shall in its discretion consider necessary or desirable in connection
with the Facility.
3 CONDITIONS PRECEDENT AND SUBSEQUENT
3.1 CONDITIONS PRECEDENT - FIRST DRAWING Before any Bank shall have any
obligation to advance the first Drawing under the Facility, the
Borrower shall pay to the Agent the relevant fees referred to in
Clause 7 and the Fee Letter and deliver or cause to be delivered to or
to the order of the Agent the following documents and evidence:-
3.1.1 EVIDENCE OF INCORPORATION Such evidence as the Agent may
reasonably require that each Security Party was duly incorporated
in its country of incorporation and remains in existence and,
where appropriate, in good standing, with power to enter into,
and perform its obligations under, those of the Security
Documents to which it is, or is intended to be, a party,
including (without limitation) a copy, certified by a director or
an officer of the Security Party in question as true, complete,
accurate and unamended, of all documents establishing or limiting
the constitution of each Security Party.
3.1.2 CORPORATE AUTHORITIES A copy, certified by a director or the
secretary of the Security Party in question as true, complete,
accurate and neither amended nor revoked, of a resolution of the
directors and a resolution of the shareholders of each Security
Party (together, where appropriate, with signed waivers of notice
of any directors' or shareholders' meetings) approving, and
authorising or ratifying the execution of, those of the Security
Documents and each Drawdown Notice to which that Security Party
is or is intended to be a party and all matters incidental
thereto.
3.1.3 OFFICER'S CERTIFICATE A certificate (i) signed by a duly
authorised officer of each of the Security Parties setting out
the names of the directors, officers and shareholders of that
Security Party and (ii) issued by each Security Party's company
registry confirming due incorporation and valid existence and
(when such information is maintained by the registry) the names
of its directors and shareholders.
22
3.1.4 POWER OF ATTORNEY The power of attorney (notarially attested and
legalised, if necessary, for registration purposes) of each of
the Security Parties under which any documents are to be executed
or transactions undertaken by that Security Party.
3.1.5 THE SECURITY DOCUMENTS The Security Documents, together with all
notices and other documents required by any of them, duly
executed.
3.1.6 DRAWDOWN NOTICE A Drawdown Notice.
3.1.7 PROCESS AGENT A letter from Teekay Shipping (UK) Ltd accepting
their appointment by each of the Security Parties as agent for
service of Proceedings pursuant to the Security Documents.
3.1.8 FEE LETTER A fee letter countersigned on behalf of the Borrower
by way of acceptance of its terms.
3.1.9 LEGAL OPINIONS Confirmation satisfactory to the Agent that all
legal opinions required by the Agent on behalf of the Finance
Parties will be given substantially in the form required by the
Agent on behalf of the Finance Parties.
3.1.10 ACCOUNTS The Borrower's Accounts for its fiscal quarter just
ended, certified, by a director or an officer of the Borrower, as
fair and accurate.
3.1.11 CORPORATE STRUCTURE Evidence of the capital structure and
financial condition of the Navion Group (based on the Borrower's
Accounts) confirming (inter alia) that within the Navion Group
there is available two hundred million Dollars ($200,000,000) of
equity or Subordinated Debt and twenty million Dollars
($20,000,000) of Free Liquidity.
3.1.12 INTERCOMPANY LOAN AGREEMENT A copy of the Intercompany Loan
Agreement duly executed by the parties thereto and certified as a
true and complete copy by the Borrower together with evidence
that all conditions precedent required under the Intercompany
Loan Agreement have been satisfied.
23
3.1.13 NAVION Evidence that any charges or other security granted
and/or registered against Navion or on or over all or any of its
vessels has been discharged.
3.1.14 SHARE CHARGE DOCUMENTS Any documents required by the Shares
Charge.
3.1.15 BRIDGE FACILITY Evidence that the Bridge Facility and any other
sums due and payable by the Borrower to the Bridge Lenders and
the Agent under the Bridge Facility Agreement will following
application of the first Drawing hereunder have been irrevocably
repaid in full and that any security granted by any of the
Security Parties as security for the Bridge Facility shall be
released forthwith upon repayment of the Bridge Facility.
3.1.16 NEGATIVE PLEDGE an undertaking in form and content acceptable
to the Agent duly executed and delivered by Navion covenanting
not to create or permit to arise or continue any Encumbrance on
or over all or any part of its assets or undertakings except for
Permitted Liens.
3.2 CONDITIONS SUBSEQUENT The Borrower undertakes to deliver or to cause
to be delivered to the Agent on, or as soon as practicable after, the
first Advance Date, the following additional documents and evidence:-
3.2.1 LEGAL OPINIONS Such legal opinions as the Agent on behalf of the
Banks shall require pursuant to Clause 3.1.9.
3.2.2 COMPANIES ACT REGISTRATIONS Evidence that the prescribed
particulars of the Security Documents have been delivered to the
Registrar of Companies of England and Wales and any other
relevant authorities within the statutory time limit.
3.3 CONDITIONS PRECEDENT - SUBSEQUENT DRAWINGS Before any Bank shall have
any obligation to advance any subsequent Drawings under the Facility,
the Borrower shall deliver or cause to be delivered to the order of
the Agent, a Drawdown Notice, in addition to the documents and
evidence referred to in Clause 3.1 where such documents and evidence
have not already been delivered to and received by the Agent.
24
3.4 NO WAIVER If the Banks in their sole discretion agree to advance any
part of the Facility to the Borrower before all of the documents and
evidence required by Clause 3.1 or Clause 3.3 (as the case may be)
have been delivered to or to the order of the Agent, the Borrower
undertakes to deliver all outstanding documents and evidence to or to
the order of the Agent no later than the date specified by the Agent,
and the advance of any part of the Facility shall not be taken as a
waiver of the Agent's right to require production of all the documents
and evidence required by Clause 3.1 or Clause 3.3 (as the case may
be).
3.5 FORM AND CONTENT All documents and evidence delivered to the Agent
pursuant to this Clause shall:-
3.5.1 be in form and substance acceptable to the Agent;
3.5.2 be accompanied, if required by the Agent, by translations into
the English language, certified in a manner acceptable to the
Agent;
3.5.3 if required for registration purposes, be certified, notarised,
legalised or attested in a manner acceptable to the Agent.
3.6 EVENT OF DEFAULT No Bank shall be under any obligation to advance any
part of its Commitment nor to act on any Drawdown Notice if, at the
date of the Drawdown Notice or at the date on which the advance of a
Drawing is requested in the Drawdown Notice, an Event of Default or
Potential Event of Default shall have occurred, or if an Event of
Default or Potential Event of Default would result from the advance of
the Drawing in question.
4 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Finance Parties at the
date of this Agreement and (by reference to the facts and circumstances
then pertaining) at the date of each Drawdown Notice, at each Advance Date
and at each Interest Payment Date as follows except that the representation
and warranty contained at Clause 4.6 shall only be made on the first
Advance Date:-
4.1 INCORPORATION AND CAPACITY Each of the Security Parties is a body
corporate duly constituted, organised and validly existing and (where
applicable) in good standing under the law of its country of
incorporation, in each case with perpetual corporate existence and the
power to xxx and be sued, to own its assets and to
25
carry on its business, and all of the corporate shareholders (if any)
of each Security Party are duly constituted and existing under the
laws of their countries of incorporation with perpetual corporate
existence and the power to xxx and be sued, to own their assets and to
carry on their business and are acting on their own account.
4.2 SOLVENCY None of the Security Parties or the Qualifying Security
Parties is insolvent or in liquidation or administration or subject to
any other insolvency procedure, and no receiver, administrative
receiver, administrator, liquidator, trustee or analogous officer has
been appointed in respect of any of the Security Parties or the
Qualifying Security Parties or all or any part of their assets. For
this purpose a Security Party or a Qualifying Security Party (as the
case may be) will be deemed insolvent if it is unable to pay its debts
within the meaning of S.123 of the Insolvency Xxx 0000.
4.3 BINDING OBLIGATIONS The Security Documents and the Qualifying Security
when duly executed and delivered will constitute the legal, valid and
binding obligations of the Security Parties and the Qualifying
Security Parties (as the case may be) enforceable in accordance with
their respective terms subject to applicable laws regarding creditors'
rights in general.
4.4 SATISFACTION OF CONDITIONS All acts, conditions and things required to
be done and satisfied and to have happened prior to the execution and
delivery of the Security Documents and the Qualifying Security in
order to constitute the Security Documents and the Qualifying Security
the legal, valid and binding obligations of the Security Parties and
the Qualifying Security Parties (as the case may be) in accordance
with their respective terms have been done, satisfied and have
happened in compliance with all applicable laws.
4.5 REGISTRATIONS AND CONSENTS With the exception only of the
registrations referred to in Clauses 3.2 all (if any) consents,
licences, approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency which
may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents and
the Qualifying Security have been obtained or made and remain in full
force and effect and the Borrower is not aware of any event or
circumstance which could reasonably be expected adversely to affect
the right of any of the Security Parties
26
or the Qualifying Security Parties (as the case may be) to hold and/or
obtain renewal of any such consents, licences, approvals or
authorisations.
4.6 DISCLOSURE OF MATERIAL FACTS The Borrower is not aware of any material
facts or circumstances which have not been disclosed to the Agent and
which might, if disclosed, have reasonably been expected to adversely
affect the decision of a person considering whether or not to make
loan facilities of the nature contemplated by this Agreement available
to the Borrower.
4.7 NO MATERIAL LITIGATION Except for those matters disclosed in writing
to the Agent, there is no action, suit, arbitration or administrative
proceeding nor any contemplated action, suit, arbitration or
administrative proceeding pending or to its knowledge about to be
pursued before any court, tribunal or governmental or other authority
which would, or would be likely to, have a materially adverse effect
on the business, assets, financial condition or creditworthiness of
the Navion Group.
4.8 NO BREACH OF LAW OR CONTRACT The execution, delivery and performance
of the Security Documents will not contravene any contractual
restriction or any law binding on any of the Security Parties or on
any shareholder (whether legal or beneficial) of any of the Security
Parties, or the constitutional documents of any of the Security
Parties, nor result in the creation of, nor oblige any of the Security
Parties to create, any Encumbrance over all or any of its assets, with
the exception of the Encumbrances created by or pursuant to the
Security Documents.
4.9 NO DEDUCTIONS Except as disclosed to the Agent in writing, that to the
best of their knowledge belief and without undue enquiry, none of the
Security Parties is required to make any deduction or withholding from
any payment which it may be obliged to make to any of the Finance
Parties under or pursuant to the Security Documents.
4.10 USE OF FACILITY The Facility will be used for the purposes specified
in the Recital.
4.11 MATERIAL ADVERSE CHANGE There has been no material adverse change in
the business, assets, operations, condition (financial or otherwise)
or prospects of any company within the Navion Group or the Guarantor
or in the facts and information regarding such entities as represented
to date. In this clause material adverse change means, in the
reasonable opinion of the Banks, a material adverse
27
affect on (i) the ability of the Borrower to repay Drawings or perform
its obligations under this Agreement or (ii) the ability of any
Security Party to perform its material obligations under any document
related to the Facility or (iii) the business, property, assets,
liabilities, operations, condition (financial or otherwise) or
prospects of any Security Party.
4.12 INTERCOMPANY LOAN AGREEMENT The Intercompany Loan Agreement delivered
to the Agent constitutes the entire agreement between the Borrower and
the Intercompany Borrower in relation to the Intercompany Indebtedness
and there are no side letters, security documents or other related
agreements nor fees payable in connection therewith which have not
been disclosed to the Agent.
5 REPAYMENT AND PREPAYMENT
5.1 REPAYMENT Each Drawing shall be repaid by the Borrower to the Agent on
behalf of the Banks on the last day of its Interest Period unless the
Borrower selects a further Interest Period for that Drawing in
accordance with Clause 6, provided that the Borrower shall not be
permitted to select such further Interest Period if an Event of
Default or Potential Event of Default has occurred and shall then be
obliged to repay such Drawing on the last day of its then current
Interest Period. The Borrower shall on the Termination Date repay to
the Agent as agent for the Banks all Facility Outstandings.
5.2 PREPAYMENT The Borrower may prepay the Facility Outstandings in whole
or in part in integral multiples of five million Dollars ($5,000,000)
(or as otherwise may be agreed by the Agent) provided that it has
first given to the Agent not fewer than five (5) Business Days' prior
written notice expiring on a Business Day of its intention to do so.
Any notice pursuant to this Clause 5.2 once given shall be irrevocable
and shall oblige the Borrower to make the prepayment referred to in
the notice on the Business Day specified in the notice, together with
all interest accrued on the amount prepaid up to and including that
Business Day.
5.3 PREPAYMENT INDEMNITY If the Borrower shall, subject always to Clause
5.2, make a prepayment on a Business Day other than the last day of an
Interest Period, it shall pay to the Agent on behalf of the Banks any
amount which is necessary to compensate the Banks for any Break Costs
incurred by the Agent or any of the Banks as a result of the
prepayment in question.
28
5.4 APPLICATION OF PREPAYMENTS Any prepayment in an amount less than the
Indebtedness shall be applied in satisfaction or reduction first of
any costs and other expenses outstanding; secondly of all interest
accrued with respect to the outstanding Drawings; and thirdly of the
outstanding Drawings as the Borrower may specify.
5.5 REBORROWING OF PREPAYMENTS Any amount prepaid pursuant to this
Agreement may be reborrowed in accordance with Clause 2.4.
6 INTEREST
6.1 INTEREST PERIODS The period during which any Drawing shall be
outstanding pursuant to this Agreement shall be divided into
consecutive Interest Periods of one, three or six months' duration, as
selected by the Borrower by written notice to the Agent not later than
11.00 a.m. on the fourth Business Day before the beginning of the
Interest Period in question, or such other duration as may be agreed
by the Banks in their discretion. No more than five one (1) month
Interest Periods may be selected by the Borrower in each calendar year
during the Facility Period.
6.2 BEGINNING AND END OF INTEREST PERIODS The first Interest Period in
respect of each Drawing shall begin on the Advance Date of that
Drawing and shall end on the last day of the Interest Period selected
in accordance with Clause 6.1. Any subsequent Interest Period selected
in respect of each Drawing shall commence on the day following the
last day of its previous Interest Period and shall end on the last day
of its current Interest Period selected in accordance with Clause 6.1.
However, in respect of any Drawings outstanding on the Termination
Date, the Interest Period applicable to such Drawings shall end on the
Termination Date.
6.3 INTEREST RATE During each Interest Period, interest shall accrue on
each Drawing at the rate determined by the Agent to be the aggregate
of (a) the Margin (b) LIBOR and (c), if applicable, the Mandatory Cost
determined at or about 11.00 a.m. (London time) on the second Business
Day prior to the beginning of the Interest Period relating to that
Drawing.
6.4 ACCRUAL AND PAYMENT OF INTEREST During the Facility Period, interest
shall accrue from day to day, shall be calculated on the basis of a
360 day year and the actual number of days elapsed (or, in any
circumstance where market practice
29
differs, in accordance with the prevailing market practice) and shall
be paid by the Borrower to the Agent on behalf of the Banks on the
last day of each Interest Period and additionally, during any Interest
Period exceeding three months, on the last day of each successive
three month period after the beginning of that Interest Period.
6.5 ENDING OF INTEREST PERIODS If any Interest Period would end on a day
which is not a Business Day, that Interest Period shall end on the
next succeeding Business Day (unless the next succeeding Business Day
falls in the next calendar month, in which event the Interest Period
in question shall end on the next preceding Business Day).
6.6 DEFAULT RATE If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event of
Default, bear interest up to the date of actual payment (both before
and after judgment) at the Default Rate, compounded at such intervals
as the Agent shall in its reasonable discretion determine, which
interest shall be payable from time to time by the Borrower to the
Agent on behalf of the Banks on demand.
6.7 DETERMINATIONS CONCLUSIVE Each determination of an interest rate made
by the Agent in accordance with Clause 6 shall (save in the case of
manifest error or on any question of law) be final and conclusive.
7 FEES
7.1 FEE LETTERS The Borrower shall pay to or to the order of the Agent,
the Arrangers or the Book Runners (as the case may be), the fees,
commissions and other sums referred to in the relevant Fee Letters in
the amounts and on the dates set out in the relevant Fee Letters.
7.2 COMMITMENT COMMISSION The Borrower shall pay to the Agent Commitment
Commission in Dollars at the Commission Rate on any undrawn and
uncancelled part of the Facility. The Commitment Commission will
accrue from day to day on the basis of a 360 day year and the actual
number of days elapsed and shall be paid quarterly in arrears from 30
September 2006 until the Commitment Termination Date with a pro rata
payment being due and payable on the Commitment Termination Date.
30
8 SECURITY DOCUMENTS
8.1 As security for the repayment of the Indebtedness, the Borrower
executed and delivered to the Agent or caused to be executed and
delivered to the Agent, on or before the first Advance Date, the
following Security Documents in such forms and containing such terms
and conditions as the Agent required:-
8.1.1 THE ASSIGNMENT a deed of assignment of the Intercompany
Indebtedness;
8.1.2 SHARES CHARGE an assignment by the Borrower of a charge over the
issued share capital of Navion entered into by the Intercompany
Borrower as security for its obligations under the Intercompany
Loan Agreement.
8.2 As further security for the repayment of the Indebtedness, the
Borrower has caused to be executed and delivered to the Agent the
following Security Documents:-
8.2.1 THE FIRST QUALIFYING SECURITY ASSIGNMENT a deed of assignment of
the First Qualifying Security Documents;
8.2.2 THE TNOL ASSIGNMENT AND SUBORDINATION AGREEMENTS the deeds of
assignment and subordination in relation to the TNOL Vessels; and
8.2.3 THE GUARANTEE the guarantee and indemnity of the Guarantor in
respect of the Borrower's Obligations.
9 AGENCY AND TRUST
9.1 APPOINTMENT Each of the Banks and each of the Arrangers appoints the
Agent its agent for the purpose of administering the Facility and the
Security Documents and authorises the Agent and its directors,
officers, employees and agents acting on the instructions from time to
time of the Majority Banks, and subject to Clauses 9.4 and 9.19, to
execute the Security Documents on its behalf and to exercise all
rights, powers, discretions and remedies vested in the Banks under or
pursuant to the Security Documents, together with all powers
reasonably incidental to them.
9.2 AUTHORITY Each of the Banks and the Arrangers irrevocably authorises
the Agent, acting on the instructions from time to time of the
Majority Banks (save where the
31
terms of any Security Document expressly require the instructions of
all of the Banks):-
9.2.1 to give or withhold any consents or approvals; and
9.2.2 to exercise, or refrain from exercising, any discretions; and
9.2.3 to collect, receive, release or pay any money;
under or pursuant to any of the Security Documents. The Agent shall
have no duties or responsibilities as agent or as security trustee
other than those expressly conferred on it by the Security Documents
and shall not be obliged to act on any instructions if to do so would,
in the opinion of the Agent, be contrary to any provision of the
Security Documents or to any law, or would expose the Agent to any
actual or potential liability to any third party.
9.3 TRUST The Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this
Clause, the Agent holds the Trust Property on trust for the Banks, in
accordance with their respective Proportionate Shares, absolutely.
Each of the Banks agrees that the obligations, rights and benefits
vested in the Agent in its capacity as security trustee shall be
performed and exercised in accordance with this Clause. The Agent in
its capacity as security trustee shall have the benefit of all of the
provisions of this Agreement benefiting it in its capacity as agent
for the Banks, and all the powers and discretions conferred on
trustees by the Trustee Xxx 0000 (to the extent not inconsistent with
this Agreement). In addition:-
9.3.1 the Agent (and any attorney, agent or delegate of the Agent) may
indemnify itself or himself out of the Trust Property against all
liabilities, costs, fees, damages, charges, losses and expenses
sustained or incurred by it or him in relation to the taking or
holding of any of the Trust Property or in connection with the
exercise or purported exercise of the rights, trusts, powers and
discretions vested in the Agent or any other such person by or
pursuant to the Security Documents or in respect of anything else
done or omitted to be done in any way relating to the Security
Documents; and
9.3.2 the Banks acknowledge that the Agent shall be under no
obligation to insure any property nor to require any other person
to insure any
32
property and shall not be responsible for any loss which may be
suffered by any person as a result of the lack or insufficiency
of any insurance; and
9.3.3 the Agent and the Banks agree that the perpetuity period
applicable to the trusts declared by this Agreement shall be the
period of eighty years from the Execution Date.
9.4 LIMITATIONS ON AUTHORITY Except with the prior written consent of each
of the Banks, the Agent shall not be entitled to :-
9.4.1 release or vary any security given for the Borrower's
obligations under this Agreement; nor
9.4.2 except as otherwise provided in this Agreement, agree to waive
the payment of any sum of money payable by any of the Security
Parties under the Security Documents; nor
9.4.3 change the meaning of the expression "MAJORITY BANKS"; nor
9.4.4 exercise, or refrain from exercising, any discretion, or give or
withhold any consent, the exercise or giving of which is, by the
terms of this Agreement, expressly reserved to the Banks; nor
9.4.5 extend the due date for the payment of any sum of money payable
by any of the Security Parties under the Security Documents; nor
9.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the obligations of
a Bank under any of the Security Documents; nor
9.4.7 agree to change the currency in which any sum is payable under
the Security Documents; nor
9.4.8 agree to amend this Clause 9.4; nor
9.4.9 agree to amend the definition of "MARGIN".
9.5 LIABILITY Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Banks or the Arrangers for
anything done or omitted to be
33
done by the Agent under or in connection with the Security Documents
unless as a result of the Agent's wilful misconduct or gross
negligence.
9.6 ACKNOWLEDGEMENT Each of the Banks and the Arrangers acknowledges
that:-
9.6.1 it has not relied on any representation made by the Agent or any
of the Agent's directors, officers, employees or agents or by any
other person acting or purporting to act on behalf of the Agent
to induce it to enter into any of the Security Documents;
9.6.2 it has made and will continue to make without reliance on the
Agent, and based on such documents and other evidence as it
considers appropriate, its own independent investigation of the
financial condition and affairs of the Security Parties in
connection with the making and continuation of the Facility;
9.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
9.6.4 the Agent shall not have any duty or responsibility at any time
to provide it with any credit or other information relating to
any of the Security Parties unless that information is received
by the Agent pursuant to the express terms of the Security
Documents.
Each of the Banks and the Arrangers agrees that it will not assert nor
seek to assert against any director, officer, employee or agent of the
Agent or against any other person acting or purporting to act on
behalf of the Agent any claim which it might have against them in
respect of any of the matters referred to in this Clause.
9.7 LIMITATIONS ON RESPONSIBILITY The Agent shall have no responsibility
to any of the Security Parties or to the Banks or to the Arrangers on
account of:-
9.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the Security
Documents;
9.7.2 the financial condition of any of the Security Parties;
9.7.3 the completeness or accuracy of any statements, representations
or warranties made in or pursuant to any of the Security
Documents, or in
34
or pursuant to any document delivered pursuant to or in
connection with any of the Security Documents;
9.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any document
executed or delivered pursuant to or in connection with any of
the Security Documents.
9.8 THE AGENT'S RIGHTS The Agent may:-
9.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to any of
the Security Documents are true and complete, unless, in its
capacity as the Agent, it has acquired actual knowledge to the
contrary; and
9.8.2 assume that no Event of Default or Potential Event of Default
has occurred unless, in its capacity as the Agent, it has
acquired actual knowledge to the contrary; and
9.8.3 rely on any document or Communication believed by it to be
genuine; and
9.8.4 rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected
or approved by it; and
9.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any of the Security
Parties on a certificate signed by or on behalf of that Security
Party; and
9.8.6 refrain from exercising any right, power, discretion or remedy
unless and until instructed to exercise that right, power,
discretion or remedy and as to the manner of its exercise by the
Banks (or, where applicable, by the Majority Banks) and unless
and until the Agent has received from the Banks any payment which
the Agent may require on account of, or any security which the
Agent may require for, any costs, claims, expenses (including
legal and other professional fees) and liabilities which it
considers it may incur or sustain in complying with those
instructions.
35
9.9 THE AGENT'S DUTIES The Agent shall:-
9.9.1 if requested in writing to do so by a Bank, make enquiry and
advise the Banks as to the performance or observance of any of
the provisions of the Security Documents by any of the Security
Parties or as to the existence of an Event of Default; and
9.9.2 inform the Banks promptly of any Event of Default of which the
Agent has actual knowledge; and
9.9.3 inform the Banks promptly of any disclosures in writing received
by the Agent pursuant to Clause 4.7.
9.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation or
warranty made or deemed repeated by any of the Security Parties or
actual knowledge of the occurrence of any Event of Default or
Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent.
9.11 OTHER BUSINESS The Agent may, without any liability to account to the
Banks or the Arrangers, generally engage in any kind of banking or
trust business with any of the Security Parties or any of their
respective Subsidiaries or associated companies or with a Bank as if
it were not the Agent.
9.12 INDEMNITY The Banks shall, promptly on the Agent's request, reimburse
the Agent in their respective Proportionate Shares, for, and keep the
Agent fully indemnified in respect of:-
9.12.1 all amounts payable by the Borrower to the Agent pursuant to
Clause 17 (other than under Clauses 17.3 and 17.4) to the extent
that those amounts are not paid by the Borrower;
9.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security Documents,
or the performance of its duties and obligations, or the exercise
of its rights, powers, discretions or remedies under or pursuant
to any of the Security Documents; or in connection with any
action taken or omitted by the Agent under or pursuant to any of
the Security Documents, unless in
36
any case those liabilities, damages, costs or claims arise solely
from the Agent's wilful misconduct or gross negligence.
9.13 EMPLOYMENT OF AGENTS In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of money and
documents and the payment of money) and to act or refrain from taking
action in reliance on the opinion of, or advice or information
obtained from, any lawyer, banker, broker, accountant, valuer or any
other person believed by the Agent in good faith to be competent to
give such opinion, advice or information.
9.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the order of
each of the Banks that Bank's Proportionate Share of every sum of
money received by the Agent pursuant to the Security Documents (with
the exception of any amounts payable pursuant to Clause 7.1 and/or the
Fee Letters and any amounts which, by the terms of the Security
Documents, are paid to the Agent for the account of the Agent alone or
specifically for the account of one or more Banks, the Arrangers or
the Book Runners) and until so paid such amount shall be held by the
Agent on trust absolutely for that Bank or the Arrangers (or as the
case may be).
9.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to a
Bank or to the Arrangers until it has itself received payment of that
sum. If, however, the Agent does pay any sum to a Bank or to the
Arrangers on account of any amount prospectively due to it pursuant to
Clause 9.14 before it has itself received payment of that amount, and
the Agent does not in fact receive payment within five Business Days
after the date on which that payment was required to be made by the
terms of the Security Documents or the Mortgagees' Insurances, the
recipient will, on demand by the Agent, refund to the Agent an amount
equal to the amount received by it, together with an amount sufficient
to reimburse the Agent for any amount which the Agent may certify that
it has been required to pay by way of interest on money borrowed to
fund the amount in question during the period beginning on the date on
which that amount was required to be paid by the terms of the Security
Documents or the Mortgagees' Insurances and ending on the date on
which the Agent receives reimbursement.
37
9.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the Finance
Parties, if at any time a Bank receives or recovers by way of set-off,
the exercise of any lien or otherwise (other than from any assignee or
transferee of or sub-participant in that Bank's Commitment), an amount
greater than that Bank's Proportionate Share of any sum due from any
of the Security Parties under the Security Documents (the amount of
the excess being referred to in this Clause as the "EXCESS AMOUNT")
then:-
9.16.1 that Bank shall promptly notify the Agent (which shall promptly
notify each other Bank);
9.16.2 that Bank shall pay to the Agent an amount equal to the Excess
Amount within ten days of its receipt or recovery of the Excess
Amount; and
9.16.3 the Agent shall treat that payment as if it were a payment by
the Security Party in question on account of the sum owed to the
Banks as aforesaid and shall account to the Banks in respect of
the Excess Amount in accordance with the provisions of this
Clause.
9.17 However, if a Bank has commenced any Proceedings to recover sums owing
to it under the Security Documents and, as a result of, or in
connection with, those Proceedings has received an Excess Amount, the
Agent shall not distribute any of that Excess Amount to any other Bank
which had been notified of the Proceedings and had the legal right to,
but did not, join those Proceedings or commence and diligently
prosecute separate Proceedings to enforce its rights in the same or
another court.
9.18 RESCISSION OF EXCESS AMOUNT If all or any part of any Excess Amount is
rescinded or must otherwise be restored to any of the Security Parties
or to any other third party, the Banks which have received any part of
that Excess Amount by way of distribution from the Agent pursuant to
Clause 9.16 shall repay to the Agent for the account of the Bank which
originally received or recovered the Excess Amount, the amount which
shall be necessary to ensure that the Banks share rateably in
accordance with their Proportionate Shares in the amount of the
receipt or payment retained, together with interest on that amount at
a rate equivalent to that (if any) paid by the Bank receiving or
recovering the Excess Amount to the person to whom that Bank is liable
to make payment in respect of such amount, and Clause 9.16.3 shall
apply only to the retained amount.
38
9.19 PROCEEDINGS Each of the Finance Parties shall notify one another of
the proposed commencement of any Proceedings under any of the Security
Documents prior to their commencement. No such Proceedings may be
commenced without the prior written consent of the Majority Banks.
9.20 INSTRUCTIONS Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the Banks
or of the Majority Banks each of the Banks shall provide the Agent
with instructions within seven Business Days of the Agent's written
request. If a Bank does not provide the Agent with instructions within
that period, (i) that Bank shall be bound by the decision of the
Agent, (ii) that Bank shall have no vote for the purposes of this
Clause and (iii) the combined Proportionate Shares of the other Banks
who provided such instructions shall be deemed to contribute 100%.
Nothing in this Clause shall limit the right of the Agent to take, or
refrain from taking, any action without obtaining the instructions of
the Banks if the Agent in its discretion considers it necessary or
appropriate to take, or refrain from taking, such action in order to
preserve the rights of the Banks under or in connection with the
Security Documents. In that event, the Agent will notify the Banks of
the action taken by it as soon as reasonably practicable, and the
Banks agree to ratify any action taken by the Agent pursuant to this
Clause.
9.21 COMMUNICATIONS Any Communication under this Clause shall be given,
delivered, made or served, in the case of the Agent (in its capacity
as Agent or as one of the Banks), and in the case of the other Banks,
at the address indicated in Schedule 1 or such other addresses as
shall be duly notified in writing to the Agent on behalf of the Banks.
9.22 PAYMENTS All amounts payable to a Bank under this Clause shall be paid
to such account at such bank as that Bank may from time to time direct
in writing to the Agent.
9.23 RETIREMENT Subject to a successor being appointed in accordance with
this Clause, the Agent may retire as agent and/or security trustee at
any time without assigning any reason by giving to the Borrower and
the other Finance Parties notice of its intention to do so, in which
event the following shall apply:-
9.23.1 with the consent of the Borrower, not to be unreasonably
withheld, the other Finance Parties may within thirty days after
the date of the Agent's
39
notice appoint a successor to act as agent and/or security
trustee or, if they fail to do so with the consent of the
Borrower, not to be unreasonably withheld, the Agent may appoint
any other bank or financial institution as its successor;
9.23.2 the resignation of the Agent shall take effect simultaneously
with the appointment of its successor on written notice of that
appointment being given to the Borrower and the other Finance
Parties;
9.23.3 the Agent shall thereupon be discharged from all further
obligations as agent and/or security trustee but shall remain
entitled to the benefit of the provisions of this Clause;
9.23.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been a
party to this Agreement.
9.24 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 9.3 and 9.14,
the Agent shall not have any fiduciary relationship with or be deemed
to be a trustee of or for a Bank or the Arrangers and nothing
contained in any of the Security Documents shall constitute a
partnership between any two or more Banks or between the Agent and any
Bank or the Arrangers.
9.25 THE AGENT AS A BANK The expression "THE BANKS" when used in the
Security Documents includes the Agent in its capacity as one of the
Banks. The Agent shall be entitled to exercise its rights, powers,
discretions and remedies under or pursuant to the Security Documents
in its capacity as one of the Banks in the same manner as any other
Bank and as if it were not also the Agent.
9.26 THE AGENT AS SECURITY TRUSTEE Unless the context otherwise requires,
the expression "THE AGENT" when used in the Security Documents
includes the Agent acting in its capacities both as agent and security
trustee.
10 COVENANTS
The Borrower covenants with the Finance Parties in the following terms.
40
10.1 NEGATIVE COVENANTS
The Borrower will not and will procure that no member of the
Covenanting Group will:-
10.1.1 NO THIRD PARTY RIGHTS without the Majority Banks' prior written
consent, create or permit to arise or continue any Encumbrance on
or over all or any part of the Vessels or their Earnings or
Insurances except for Permitted Liens or Encumbrances arising in
connection with the financing of the organic compound equipment
provided on a non-recourse basis to the Borrower; nor
10.1.2 NO OTHER BUSINESS materially change the nature of its business
from that carried on as at the Execution Date (and for the
purpose of this Clause, a change of business shall be deemed
"material" if the turnover of any new or changed business
constitutes seven point five per cent (7.5%) or more of the
aggregate turnover of the relevant entity within the Covenanting
Group); nor
10.1.3 MERGER OR AMALGAMATION without the prior written consent of the
Majority Banks, permit any merger or amalgamation with a company
outside the Navion Group provided that the Borrower shall notify
the Agent, in the case of a merger or amalgamation within the
Navion Group; nor
10.1.4 QUALIFYING SECURITY without the prior written consent of the
Banks, make or cause to be made any amendment, variation,
supplement or release to, or transfer or novation of, the
Qualifying Security.
10.2 POSITIVE COVENANTS
10.2.1 FINANCIAL STATEMENTS The Borrower will supply to the Agent,
without request, the Guarantor's Accounts for each financial year
of the Guarantor ending during the Facility Period, containing
(amongst other things) the Guarantor's profit and loss account
for, and balance sheet at the end of, each such financial year,
in each case within one hundred and fifty days of the end of the
financial year to which they relate and the Guarantor's quarterly
unaudited management accounts within 90 days of the end of the
quarter to which they relate, and such financial
41
statements shall accurately and fairly represent the financial
condition of the Guarantor.
10.2.2 OTHER INFORMATION The Borrower will promptly supply to the
Agent such information and explanations as the Majority Banks may
from time to time reasonably require in connection with the
operation of the Vessels and the Guarantor Group's profit and
liquidity, and will procure that the Agent be given the like
information and explanations relating to all other Security
Parties and the Qualifying Security Parties.
10.2.3 INSPECTION OF RECORDS The Borrower will permit the inspection
of its financial records and accounts on reasonable notice from
time to time during business hours by the Agent or its nominee.
10.2.4 NOTIFICATION OF EVENT OF DEFAULT The Borrower will immediately
notify the Agent in writing of the occurrence of any Event of
Default or Potential Event of Default or any event which will
materially adversely affect the Borrower's or the Guarantor's
ability to perform its obligations under the Security Documents
to which it is a party or the ability of any of the other
Security Parties to perform any of their material obligations
under any of the Security Documents to which they are a party or
may become a party to.
10.2.5 PARI PASSU The Borrower shall ensure that its respective
obligations under this Agreement shall at all times rank at least
pari passu with all of its other present and future unsecured and
unsubordinated indebtedness with the exception of any obligations
which are mandatorily preferred by any applicable laws to
companies generally and not by contract.
10.2.6 CORPORATE EXISTENCE Save as permitted by Clause 10.1.3, the
Borrower shall ensure that throughout the Facility Period each of
the Security Parties and the Qualifying Security Parties shall
(i) remain duly formed and validly existing under the laws of its
respective jurisdiction of incorporation (ii) remain authorised
to do business in the jurisdiction in which it transacts its
business (iii) continue to have the power to carry on its
business as it is now being conducted and to enter into and
perform its obligations under the Transaction Documents to which
it is a
42
party and (iv) continue to comply with all laws, statutory,
regulatory and other requirements relative to its business which
could reasonably be expected to have a material adverse effect on
its business, assets or operations, financial or otherwise.
10.2.7 ADMISSIBILITY IN EVIDENCE The Borrower shall on the request of
the Agent obtain all necessary authorisations, consents,
approvals, licences, exemptions, filings, registrations,
recordings and notarisations required or advisable in connection
with the admissibility in evidence of the Security Documents or
any of them in Proceedings in England or any other jurisdiction
in which Proceedings have been commenced.
10.3 VALUATIONS Deliver to the Agent a Valuation of each of the Vessels on
the due date for delivery of the financial statements of the Guarantor
and on such other occasions as the Agent may reasonably request.
10.4 GUARANTOR'S FINANCIAL COVENANTS At any time during the Facility
Period, the Borrower shall procure that on a consolidated basis:-
10.4.1 the Guarantor Group maintains Free Liquidity and undrawn
committed revolving credit lines (including under this Agreement
but excluding committed revolving credit lines with less than six
months to maturity) of not less than seventy five million Dollars
($75,000,000) in aggregate; and
10.4.2 the aggregate of the Free Liquidity of the Guarantor Group and
undrawn committed revolving credit lines (including under this
Agreement but excluding committed revolving credit lines with
less than 6 months to maturity) shall not be less than five per
cent (5%) of its Total Debt.
10.5 DIVIDENDS Provided that the Intercompany Indebtedness shall at all
times be equal to or greater than the Indebtedness and no Event of
Default has occurred and is continuing (but not otherwise) the
Borrower may:-
10.5.1 pay any dividends or make any other distributions to
shareholders; and/or
10.5.2 make any loan or other similar financial support available to
any third party or any member of the Navion Group.
43
10.6 INTERCOMPANY LOAN Upon the written request of the Agent, the Borrower
shall deliver a certificate to the Agent confirming the amount
outstanding under the Intercompany Loan Agreement, which shall at all
times be at least equal to the aggregate of the Facility Outstandings
and all unpaid interest, costs and expenses under this Agreement.
11 EARNINGS
REMITTANCE OF EARNINGS Immediately upon the occurrence of an Event of
Default, the Borrower shall procure that all Earnings are paid to such
account(s) as the Agent shall from time to time specify by notice in
writing to the Borrower.
12 EVENTS OF DEFAULT
12.1 THE AGENT'S RIGHTS If any of the events set out in Clause 12.2 occurs,
the Agent may at its discretion (and, on the instructions of the
Majority Banks, will) by notice to the Borrower declare the Banks to
be under no further obligation to the Borrower under or pursuant to
this Agreement and may (and, on the instructions of the Majority
Banks, will) declare all or any part of the Indebtedness (including
such unpaid interest as shall have accrued) to be immediately payable,
whereupon the Indebtedness (or the part of the Indebtedness referred
to in the Agent's notice) shall immediately become due and payable
without any further demand or notice of any kind.
12.2 EVENTS OF DEFAULT The events referred to in Clause 12.1 are:-
12.2.1 PAYMENT DEFAULT if the Borrower defaults in the payment of any
part of the Indebtedness when due PROVIDED ALWAYS that if the
Borrower can demonstrate to the reasonable satisfaction of the
Agent that it has given all necessary instructions to effect
payment and the non-receipt thereof is attributable to an error
in the banking system, such Event of Default shall only occur (i)
three (3) Business Days after such payment fell due if it relates
to principal, (ii) five (5) Business Days after such payment fell
due if it relates to a scheduled payment which is not principal
and (iii) ten Business Days after such payment fell due if it
relates to a payment on demand; or
12.2.2 OTHER DEFAULT if any of the Security Parties or the Qualifying
Security Parties fails to observe or perform any of the
covenants, conditions,
44
undertakings, agreements or obligations (other than those
relating to Insurances) on its part contained in any of the
Transaction Documents (other than a TNOL Bareboat Charter) or
shall in any other way be in breach of or do or cause to be done
any act repudiating or evidencing an intention to repudiate any
of the Transaction Documents (other than a TNOL Bareboat Charter)
and such default (if in the reasonable opinion of the Majority
Banks capable of remedy) is not remedied within thirty (30) days
after notice of the default has been given to the Borrower; or
12.2.3 MISREPRESENTATION OR BREACH OF WARRANTY if any representation,
warranty or statement made, deemed to be made, or repeated under
any of the Security Documents or in any accounts, certificate,
notice instrument, written statement or opinion delivered by a
Security Party under or in connection with any Security Document
is incorrect or misleading in any material respect when made,
deemed to be made or repeated; or
12.2.4 EXECUTION if a distress or execution or other process of a
court or authority is levied on any of the property of any of the
Security Parties or any other member of the Navion Group before
or after final judgment or by order of any competent court or
authority for an amount in excess of five million Dollars
($5,000,000) or its equivalent in any other currency and is not
satisfied or stayed (with a view to being contested in good
faith) within fourteen days of levy or any other applicable cure
period (if longer); or
12.2.5 INSOLVENCY EVENTS if any of the Security Parties:-
(a) resolves to appoint, or applies for, or consents to the
appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of all or
part of its assets other than for the purposes of a merger
or amalgamation pursuant to Clause 10.1.3; or
(b) is unable or admits its inability to pay its debts as they
fall due; or
(c) makes a general assignment for the benefit of creditors; or
(d) ceases trading or threatens to cease trading; or
45
(e) has appointed an Inspector under the Companies Xxx 0000 or
any statutory provision which the Agent in its discretion
considers analogous thereto; or
12.2.6 INSOLVENCY PROCEEDINGS if any proceedings are commenced or
threatened, or any order or judgment is given by any court, for
the bankruptcy, liquidation, winding up, administration or
re-organisation of any of the Security Parties or any other
member of the Navion Group or for the appointment of a receiver,
administrative receiver, administrator, liquidator or trustee of
any of the Security Parties or any other member of the Navion
Group or of all or any material part of the assets of any of the
Security Parties or any other member of the Navion Group, or if
any person appoints or purports to appoint such receiver,
administrative receiver, administrator, liquidator or trustee
which proceeding is not discharged within thirty (30) days of its
commencement; or
12.2.7 IMPOSSIBILITY OR ILLEGALITY unless covered by Clause 15.7, if
any event occurs which would, or would with the passage of time,
render performance of any of the Security Documents impossible,
unlawful or unenforceable by the Banks or the Agent; or
12.2.8 CONDITIONS SUBSEQUENT if any of the conditions set out in
Clause 3.2 is not satisfied within the time reasonably required
by the Agent; or
12.2.9 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any material
consent, licence, approval or authorisation which is now or which
at any time during the Facility Period becomes necessary to
enable any of the Security Parties to comply with any of their
obligations in or pursuant to any of the Security Documents is
revoked, withdrawn or withheld, or modified in a manner which the
Agent reasonably considers is, or may be, prejudicial to the
interests of the Banks in a material manner, or any material
consent, licence, approval or authorisation ceases to remain in
full force and effect; or
12.2.10 CURTAILMENT OF BUSINESS if the business of any of the Security
Parties is wholly or materially curtailed by any intervention by
or under authority of any government, or if all or a substantial
part of the undertaking,
46
property or assets of any of the Security Parties is seized,
nationalised, expropriated or compulsorily acquired by or under
authority of any government or any Security Party disposes or
threatens to dispose of a substantial part of its business or
assets; or
12.2.11 ACCELERATION OF OTHER INDEBTEDNESS if any other indebtedness
of any Security Party or any Material Subsidiary is not paid when
due (or within any applicable grace period) or any indebtedness
of any Security Party or any Material Subsidiary is declared to
be or otherwise becomes due and payable prior to its specified
maturity where (in either case) the aggregate of all such unpaid
or accelerated indebtedness (i) of the Guarantor is equal to or
greater than fifty million Dollars ($50,000,000) or its
equivalent in any other currency; or (ii) of the Borrower, or any
Material Subsidiary is equal to or greater than twenty five
million Dollars ($25,000,000) or its equivalent in any other
currency; or
12.2.12 REDUCTION OF CAPITAL if any of the members of the Navion Group
reduces its authorised or issued or subscribed capital except
reductions effected in compliance with Clause 10.1.3; or
12.2.13 CHALLENGE TO REGISTRATION if the registration of any Vessel or
any Mortgage becomes void or voidable or liable to cancellation
or termination; or
12.2.14 WAR if the country of registration of any Vessel becomes
involved in war (whether or not declared) or civil war or is
occupied by any other power and the Agent reasonably considers
that, as a result, the security conferred by the Security
Documents is materially prejudiced; or
12.2.15 NOTICE OF TERMINATION if the Guarantor gives notice to the
Agent to determine its obligations under the Guarantee; or
12.2.16 MATERIAL ADVERSE CHANGE if at any time there shall occur a
change in the business or operations of a Security Party or a
change in the financial condition of any Security Party which, in
the reasonable opinion of the Majority Banks, materially impairs
such Security Party's ability to discharge its obligations under
the Security Documents in the manner provided therein and such
change, if capable of remedy, is not
47
so remedied within 15 days of the delivery of a notice confirming
such change by the Agent to the relevant Security Party; or
12.2.17 FINAL JUDGEMENTS if any of the Security Parties fails to
comply with any non appealable court order or fails to pay a
final unappealable judgment against it, in either case, in excess
of one million Dollars ($1,000,000) which remains unsettled for
fourteen (14) days; or
12.2.18 INTERCOMPANY LOAN AGREEMENT if any default (other than on the
part of the Intercompany Agent) occurs under the Intercompany
Loan Agreement or if the Intercompany Agent is removed (or steps
are taken to try to remove it) from its position as agent
thereunder or if the Borrower (i) obstructs the Intercompany
Agent from performance of its delegated duties or (ii) attempts
to revoke the authority and discretion it has granted to the
Intercompany Agent, under clause 10.3(b) of the Intercompany Loan
Agreement; or
12.2.19 QUALIFYING SECURITY if any amendment, variation, supplement,
release, transfer or novation is made or effected in relation to
the Qualifying Security without the prior written consent of the
Banks; or
12.2.20 TNOL BAREBOAT CHARTERS if the TNOL Bareboat Charters or any of
them are terminated prior to the Termination Date without the
prior written consent of the Agent; or
12.2.21 INSURANCES if any Security Party fails to effect or maintain
the Insurances in the manner required by the relevant Security
Documents or the First Qualifying Security Documents (as the case
may be).
13 SET-OFF AND LIEN
13.1 SET-OFF The Borrower irrevocably authorises each of the Finance
Parties at any time after all or any part of the Indebtedness shall
have become due and payable to set off without notice any liability of
the Borrower to any of the Finance Parties (whether present or future,
actual or contingent, and irrespective of the branch or office,
currency or place of payment) against any credit balance from time to
time standing on any account of the Borrower (whether current or
otherwise and whether or not subject to notice) with any branch of any
of the Finance Parties in or towards satisfaction of the Indebtedness
and, in the name of that Finance Party
48
or the Borrower, to do all acts (including, without limitation,
converting or exchanging any currency) and execute all documents which
may be required to effect such application.
13.2 LIEN If an Event of Default has occurred and is continuing, each
Finance Party shall have a lien on and be entitled to retain and
realise as additional security for the repayment of the Indebtedness
any cheques, drafts, bills, notes or negotiable or non-negotiable
instruments and any stocks, shares or marketable or other securities
and property of any kind of the Borrower (or of that Finance Party as
agent or nominee of the Borrower) from time to time held by that
Finance Party, whether for safe custody or otherwise.
13.3 RESTRICTIONS ON WITHDRAWAL Despite any term to the contrary in
relation to any deposit or credit balance at any time on any account
of the Borrower with any of the Finance Parties, no such deposit or
balance shall be repayable or capable of being assigned, mortgaged,
charged or otherwise disposed of or dealt with by the Borrower after
an Event of Default has occurred and while such Event of Default is
continuing, but any Finance Party may from time to time permit the
withdrawal of all or any part of any such deposit or balance without
affecting the continued application of this Clause.
13.4 APPLICATION Whilst an Event of Default is continuing, the Borrower
irrevocably authorises the Agent to apply all sums which the Agent may
receive:-
13.4.1 pursuant to a sale or other disposition of a Vessel or any
right, title or interest in a Vessel; or
13.4.2 by way of payment to the Agent of any sum in respect of the
Insurances, Earnings or Requisition Compensation of a Vessel; or
13.4.3 otherwise arising under or in connection with any of the
Security Documents
in or towards satisfaction, or by way of retention on account, of the
Indebtedness, in such manner as the Agent may in its discretion
determine.
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14 ASSIGNMENT AND SUB-PARTICIPATION
14.1 RIGHT TO ASSIGN Each of the Banks may assign or transfer all or any of
its rights under or pursuant to the Security Documents or grant
sub-participations in all or any part of its Commitment to any other
branch of that Bank or (with the prior written consent of the Borrower
which shall not be unreasonably withheld and which shall be deemed
given if the Borrower fails to respond to any written request under
this provision within a period of ten (10) Business Days) to any other
bank or financial institution, provided that such assignment or
transfer or sub-participation does not result in the Borrower being
subject to any additional Tax or other financial or legal obligations
other than those contemplated by the terms of this Agreement at the
time of such assignment, transfer or sub-participation.
14.2 BORROWER'S CO-OPERATION The Borrower will co-operate fully with the
Banks in connection with any assignment, transfer or sub-participation
pursuant to Clause 14.1; will execute and procure the execution of
such documents as the Banks may require in connection therewith; and
irrevocably authorises each of the Finance Parties to disclose to any
proposed assignee, transferee or sub-participant (whether before or
after any assignment, transfer or sub-participation and whether or not
any assignment, transfer or sub-participation shall take place) all
information relating to the Security Parties, the Facility or the
Security Documents which each such Finance Party may in its discretion
consider necessary or desirable (subject to any duties of
confidentiality applicable to the Banks generally).
14.3 RIGHTS OF ASSIGNEE Any assignee, transferee or sub-participant of a
Bank shall (unless limited by the express terms of the assignment,
transfer or sub-participation) take the full benefit of every
provision of the Security Documents benefiting that Bank.
14.4 TRANSFER CERTIFICATES If any Bank wishes to transfer all or any of its
Commitment as contemplated in Clause 14.1 then such transfer may be
effected by the delivery to the Agent 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 the date of delivery of such Transfer Certificate
to the Agent:
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14.4.1 to the extent that in such Transfer Certificate the Bank which
is a party thereto seeks to transfer its Commitment in whole, the
Borrower and such Bank shall be released from further obligations
towards each other under this Agreement and their respective
rights against each other shall be cancelled other than existing
claims against such Bank for breach of this Agreement (such
rights, benefits and obligations being referred to in this Clause
14.4 as "DISCHARGED RIGHTS AND OBLIGATIONS");
14.4.2 the Borrower and the Transferee which is a 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; and
14.4.3 the Agent, the Arrangers, the Transferee and the other Banks
shall acquire the same rights and benefits and assume the same
obligations between themselves as they would have acquired and
assumed had such Transferee been an original party to this
Agreement as a Bank with the rights, benefits and/or obligations
acquired or assumed by it as a result of such transfer.
14.5 POWER OF ATTORNEY In order to give effect to each Transfer Certificate
the Finance Parties and the Borrower each hereby irrevocably and
unconditionally appoint the Agent as its true and lawful attorney with
full power to execute on their respective behalves each Transfer
Certificate delivered to the Agent pursuant to Clause 14.4 without the
Agent being under any obligation to take any further instructions from
or give any prior notice to, any of the Finance Parties or, subject to
the Borrower's rights under Clause 14.1, the Borrower before doing so
and the Agent shall so execute each such Transfer Certificate on
behalf of the other Finance Parties and the Borrower immediately on
its receipt of the same pursuant to Clause 14.4.
14.6 NOTIFICATION The Agent shall promptly notify the other Finance
Parties, the Transferee and the Borrower on the execution by it of any
Transfer Certificate together with details of the amount transferred,
the Transfer Date and the parties to such transfer.
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15 PAYMENTS, MANDATORY PREPAYMENT, RESERVE REQUIREMENTS AND ILLEGALITY
15.1 PAYMENTS All amounts payable by the Borrower under or pursuant to any
of the Security Documents shall be paid to such accounts at such banks
as the Agent may from time to time direct to the Borrower and shall be
paid in Dollars in same day funds (or such funds as are required by
the authorities in the United States of America for settlement of
international payments for immediate value). Payments shall be deemed
to have been received by the Agent on the date on which the Agent
receives authenticated advice of receipt, unless that advice is
received by the Agent on a day other than a Business Day or at a time
of day (whether on a Business Day or not) when the Agent in its
reasonable discretion considers that it is impossible or impracticable
for the Agent to utilise the amount received for value that same day,
in which event the payment in question shall be deemed to have been
received by the Agent on the Business Day next following the date of
receipt of advice by the Agent.
15.2 NO DEDUCTIONS OR WITHHOLDINGS All payments (whether of principal or
interest or otherwise) to be made by the Borrower pursuant to the
Security Documents shall, subject only to Clause 15.3, be made free
and clear of and without deduction for or on account of any Taxes or
other deductions, withholdings, restrictions, conditions or
counterclaims of any nature, and the Borrower will not claim any
equity in respect of any payment due from it to the Banks or to the
Agent under or in relation to any of the Security Documents.
15.3 GROSSING-UP If at any time any law requires (or is interpreted to
require) the Borrower to make any deduction or withholding from any
payment, or to change the rate or manner in which any required
deduction or withholding is made, the Borrower will promptly notify
the Agent and, simultaneously with making that payment, will pay to
the Agent whatever additional amount (after taking into account any
additional Taxes on, or deductions or withholdings from, or
restrictions or conditions on, that additional amount) is necessary to
ensure that, after making the deduction or withholding, the Agent and
the Banks receive a net sum equal to the sum which they would have
received had no deduction or withholding been made.
15.4 EVIDENCE OF DEDUCTIONS If at any time the Borrower is required by law
to make any deduction or withholding from any payment to be made by it
pursuant to any
52
of the Security Documents, the Borrower will pay the amount required
to be deducted or withheld to the relevant authority within the time
allowed under the applicable law and will, no later than thirty days
after making that payment, deliver to the Agent an original receipt
issued by the relevant authority, or other evidence reasonably
acceptable to the Agent, evidencing the payment to that authority of
all amounts required to be deducted or withheld. If the Borrower makes
any deduction or withholding from any payment under or pursuant to any
of the Security Documents, and a Bank subsequently receives a refund
or allowance from any tax authority which that Bank at its sole
discretion identifies as being referable to that deduction or
withholding, that Bank shall, as soon as reasonably practicable, pay
to the Borrower an amount equal to the amount of the refund or
allowance received, if and to the extent that it may do so without
prejudicing its right to retain that refund or allowance and without
putting itself in any worse financial position than that in which it
would have been had the deduction or withholding not been required to
have been made. Nothing in this Clause shall be interpreted as
imposing any obligation on any Bank unless requested by the Borrower
to apply for any refund or allowance nor as restricting in any way the
manner in which any Bank organises its tax affairs, nor as imposing on
any Bank any obligation to disclose to the Borrower any information
regarding its tax affairs or tax computations. All costs and expenses
incurred by any Bank in obtaining or seeking to obtain a refund or
allowance from any tax authority pursuant to this Clause shall be for
the Borrower's account.
15.5 ADJUSTMENT OF DUE DATES If any payment to be made under any of the
Security Documents, other than a payment of interest on the Facility,
shall be due on a day which is not a Business Day, that payment shall
be made on the next succeeding Business Day (unless the next
succeeding Business Day falls in the next calendar month in which
event the payment shall be made on the next preceding Business Day).
Any such variation of time shall be taken into account in computing
any interest in respect of that payment.
15.6 CHANGE IN LAW If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any law,
or in compliance with any request or requirement from any central bank
or any fiscal, monetary or other authority:-
53
15.6.1 any Finance Party (or the holding company of any Finance Party)
shall be subject to any Tax with respect to payments of all or
any part of the Indebtedness; or
15.6.2 the basis of Taxation of payments to any Finance Party in
respect of all or any part of the Indebtedness shall be changed;
or
15.6.3 any reserve requirements shall be imposed, modified or deemed
applicable against assets held by or deposits in or for the
account of or loans by any branch of any Finance Party or its
direct or indirect holding company; or
15.6.4 any ratio (whether cash, capital adequacy, liquidity or
otherwise) which any Finance Party or its direct or indirect
holding company is required or requested to maintain shall be
affected; or
15.6.5 there is imposed on any Finance Party (or on the direct or
indirect holding company of any Finance Party) any other
condition in relation to the Indebtedness or the Security
Documents;
and the result of any of the above shall be to increase the cost to
any Bank (or to the direct or indirect holding company of any Bank) of
that Bank making or maintaining its Commitment or its Drawing, or to
cause any Finance Party to suffer (in its reasonable opinion) a
material reduction in the rate of return on its overall capital below
the level which it reasonably anticipated at the date of this
Agreement and which it would have been able to achieve but for its
entering into this Agreement and/or performing its obligations under
this Agreement, the Finance Party affected shall notify the Agent and,
on demand to the Borrower by the Agent, the Borrower shall from time
to time pay to the Agent for the account of the Finance Party affected
the amount which shall compensate that Finance Party or the Agent (or
the relevant holding company) for such additional cost or reduced
return. A certificate signed by an authorised signatory of the Agent
or of the Finance Party affected setting out the amount of that
payment and the basis of its calculation shall be submitted to the
Borrower and shall be conclusive evidence of such amount save for
manifest error or on any question of law.
15.7 ILLEGALITY AND IMPRACTICALITY Notwithstanding anything contained in
the Security Documents, the obligations of a Bank to advance or
maintain its
54
Commitment shall terminate in the event that a change in any law or in
the interpretation of any law by any authority charged with its
administration shall make it unlawful for that Bank to advance or
maintain its Commitment. In such event the Bank affected shall notify
the Agent and the Agent shall, by written notice to the Borrower,
declare that Bank's obligations to be immediately terminated. If all
or any part of the Facility shall have been advanced by the Banks to
the Borrower, the portion of the Indebtedness (including all accrued
interest) advanced by the Bank so affected shall be prepaid within
thirty days from the date of such notice. Clause 5.3 shall apply to
that prepayment if it is made on a day other than the last day of an
Interest Period. During that period, the affected Bank shall negotiate
in good faith with the Borrower to find an alternative method or
lending base in order to maintain the Facility.
15.8 CHANGES IN MARKET CIRCUMSTANCES If at any time a Bank determines
(which determination shall be final and conclusive and binding on the
Borrower) that, by reason of changes affecting the London Interbank
market, adequate and fair means do not exist for ascertaining the rate
of interest on the Facility or any part thereof pursuant to this
Agreement:-
15.8.1 that Bank shall give notice to the Agent and the Agent shall
give notice to the Borrower of the occurrence of such event; and
15.8.2 the Agent shall as soon as reasonably practicable certify to
the Borrower in writing the effective cost to that Bank of
maintaining its Commitment for such further period as shall be
selected by that Bank and the rate of interest payable by the
Borrower for that period; or, if that is not acceptable to the
Borrower,
15.8.3 the Agent in accordance with instructions from that Bank and
subject to that Bank's approval of any agreement between the
Agent and the Borrower, will negotiate with the Borrower in good
faith with a view to modifying this Agreement to provide a
substitute basis for that Bank's Commitment which is financially
a substantial equivalent to the basis provided for in this
Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 15.8.1, the Borrower and the Agent fail to agree in writing on
a substitute basis for such Bank's Commitment the Borrower will
immediately prepay the amount of such
55
Bank's Commitment and the Maximum Facility Amount will automatically
decrease by the amount of such Commitment and such decrease shall not
be reversed. Clause 5.3 shall apply to that prepayment if it is made
on a day other than the last day of an Interest Period.
15.9 NON-AVAILABILITY OF CURRENCY If a Bank is for any reason unable to
obtain Dollars in the London Interbank market and is, as a result, or
as a result of any other contingency affecting the London Interbank
market, unable to advance or maintain its Commitment in Dollars, that
Bank shall give notice to the Agent and the Agent shall give notice to
the Borrower and that Bank's obligations to make the Facility
available shall immediately cease. In that event, if all or any part
of the Facility shall have been advanced by that Bank to the Borrower,
the Agent in accordance with instructions from that Bank and subject
to that Bank's approval of any agreement between the Agent and the
Borrower, will negotiate with the Borrower in good faith with a view
to establishing a mutually acceptable basis for funding the Facility
or relevant part thereof from an alternative source. If the Agent and
the Borrower have failed to agree in writing on a basis for funding
the Facility or relevant part thereof from an alternative source by
11.00 a.m. on the second Business Day prior to the end of the then
current relevant Interest Period, the Borrower will (without prejudice
to its other obligations under or pursuant to this Agreement,
including, without limitation, its obligation to pay interest on the
Facility, arising on the expiry of the then relevant Interest Period)
prepay the Indebtedness (or relevant part thereof) to the Agent on
behalf of that Bank on the expiry of the then current relevant
Interest Period.
16 COMMUNICATIONS
16.1 METHOD Except for Communications pursuant to Clause 9, which shall be
made or given in accordance with Clause 9.20, any Communication may be
given, delivered, made or served (as the case may be) under or in
relation to this Agreement by letter or fax and shall be in the
English language and sent addressed:-
16.1.1 in the case of any of the Finance Parties to the Agent at its
address at the head of this Agreement (fax no: + 00 00 000 000)
marked for the attention of: Credit Administration Shipping; and
56
16.1.2 in the case of the Borrower and/or the Guarantor to the
Communications Address;
or to such other address or fax number as the Agent or the Borrower
may designate for themselves by written notice to the others.
16.2 TIMING A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by a party to this
Agreement:-
16.2.1 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication to
have been transmitted to the correct fax number;
16.2.2 if delivered to an officer of the relevant party or (in the
case of the Borrower) left at the Communications Address at the
time of delivery or leaving; or
16.2.3 if posted, at 9.00 a.m. on the third Business Day after posting
by prepaid first class post.
Any Communication by fax shall be promptly confirmed in writing by
post or hand delivery.
17 GENERAL INDEMNITIES
17.1 CURRENCY In the event of any Finance Party receiving or recovering any
amount payable under any of the Security Documents in a currency other
than the Currency of Account, and if the amount received or recovered
is insufficient when converted into the Currency of Account at the
date of receipt to satisfy in full the amount due, the Borrower shall,
on the Agent's written demand, pay to the Agent such further amount in
the Currency of Account as is sufficient to satisfy in full the amount
due and that further amount shall be due to the Agent on behalf of the
Finance Parties as a separate debt under this Agreement.
17.2 COSTS AND EXPENSES The Borrower will, within fourteen days of the
Agent's written demand, reimburse the Agent (on behalf of each of the
Finance Parties) for all reasonable out of pocket expenses including
internal and external legal costs (including stamp duty, Value Added
Tax or any similar or replacement tax if applicable) of and incidental
to:-
57
17.2.1 the negotiation, syndication, preparation, execution and
registration of the Security Documents (whether or not any of the
Security Documents are actually executed or registered and
whether or not all or any part of the Facility is advanced);
17.2.2 any amendments, addenda or supplements to any of the Security
Documents (whether or not completed);
17.2.3 any other documents which may at any time be required by any
Finance Party to give effect to any of the Security Documents or
which any Finance Party is entitled to call for or obtain
pursuant to any of the Security Documents; and
17.2.4 the exercise of the rights, powers, discretions and remedies of
the Finance Parties under or pursuant to the Security Documents.
17.3 EVENTS OF DEFAULT The Borrower shall indemnify the Finance Parties
from time to time on demand against all losses and costs incurred or
sustained by any Finance Party as a consequence of any Event of
Default, including (without limitation) any Break Costs.
17.4 FUNDING COSTS The Borrower shall indemnify the Finance Parties from
time to time on demand against all losses and costs incurred or
sustained by any Finance Party if, for any reason due to a default or
other action by the Borrower, any Drawing is not advanced to the
Borrower after the relevant Drawdown Notice has been given to the
Agent, or is advanced on a date other than that requested in the
Drawdown Notice, including (without limitation) any Break Costs.
17.5 PROTECTION AND ENFORCEMENT The Borrower shall indemnify the Finance
Parties from time to time on demand against all losses, costs and
liabilities which any Finance Party may from time to time sustain,
incur or become liable for in or about the protection, maintenance or
enforcement of the rights conferred on the Finance Parties by the
Security Documents or in or about the exercise or purported exercise
by the Finance Parties of any of the rights, powers, discretions or
remedies vested in them under or arising out of the Security
Documents, including (without limitation) any losses, costs and
liabilities which any Finance Party may from time to time sustain,
incur or become liable for by reason of any Finance Party being
mortgagees of any Vessel, assignees of any Mortgage and/or
58
a lender to the Borrower, or by reason of any Finance Party being
deemed by any court or authority to be an operator or controller, or
in any way concerned in the operation or control, of any Vessel. No
such indemnity will be given to a Finance Party where any such loss,
cost or liability has occurred due to gross negligence or wilful
misconduct on the part of that Finance Party; however this shall not
affect the right of any other Finance Party to receive any such
indemnity.
17.6 LIABILITIES OF FINANCE PARTIES The Borrower will from time to time
reimburse the Finance Parties on demand for all sums which any Finance
Party may pay on account of any of the Security Parties or in
connection with any Vessel (whether alone or jointly or jointly and
severally with any other person) including (without limitation) all
sums which any Finance Party may pay or guarantees which any Finance
Party may give in respect of the Insurances, any expenses incurred by
any Finance Party in connection with the maintenance or repair of any
Vessel or in discharging any lien, bond or other claim relating in any
way to any Vessel, and any sums which any Finance Party may pay or
guarantees which they may give to procure the release of any Vessel
from arrest or detention.
17.7 TAXES The Borrower shall pay all Taxes to which all or any part of the
Indebtedness or any of the Security Documents may be at any time
subject and shall indemnify the Finance Parties on demand against all
liabilities, costs, claims and expenses incurred in connection
therewith, including but not limited to any such liabilities, costs,
claims and expenses resulting from any omission to pay or delay in
paying any such Taxes. The indemnity contained in this Clause shall
survive the repayment of the Indebtedness.
18 MISCELLANEOUS
18.1 WAIVERS No failure or delay on the part of any Finance Party in
exercising any right, power, discretion or remedy under or pursuant to
any of the Security Documents, nor any actual or alleged course of
dealing between any Finance Party and any of the Security Parties,
shall operate as a waiver of, or acquiescence in, any default on the
part of any Security Party, unless expressly agreed to do so in
writing by the Agent, nor shall any single or partial exercise by any
Finance Party of any right, power, discretion or remedy preclude any
other or further exercise of that right, power, discretion or remedy,
or the exercise by a Finance Party of any other right, power,
discretion or remedy.
59
18.2 NO ORAL VARIATIONS No variation or amendment of any of the Security
Documents shall be valid unless in writing and signed on behalf of the
Agent and the relevant Security Party.
18.3 SEVERABILITY If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not be
affected or impaired in any way.
18.4 SUCCESSORS ETC. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees and
assignees, and shall inure to the benefit of the Finance Parties and
their respective successors, transferees and assignees. The Borrower
may not assign or transfer any of its rights or duties under or
pursuant to any of the Security Documents without the prior written
consent of the Banks.
18.5 FURTHER ASSURANCE If any provision of the Security Documents shall be
invalid or unenforceable in whole or in part by reason of any present
or future law or any decision of any court, or if the documents at any
time held by the Finance Parties on their behalf are considered by the
Banks for any reason insufficient to carry out the terms of this
Agreement, then from time to time the Borrower will promptly, on
demand by the Agent, execute or procure the execution of such further
documents as in the reasonable opinion of the Banks are necessary to
provide adequate security for the repayment of the Indebtedness.
18.6 OTHER ARRANGEMENTS The Finance Parties may, without prejudice to their
rights under or pursuant to the Security Documents, at any time and
from time to time, on such terms and conditions as they may in their
discretion determine, and without notice to the Borrower, grant time
or other indulgence to, or compound with, any other person liable
(actually or contingently) to the Finance Parties or any of them in
respect of all or any part of the Indebtedness, and may release or
renew negotiable instruments and take and release securities and hold
funds on realisation or suspense account without affecting the
liabilities of the Borrower or the rights of the Finance Parties under
or pursuant to the Security Documents.
18.7 ADVISERS The Borrower irrevocably authorises the Agent, at any time
and from time to time during the Facility Period, to consult insurance
advisers on any matters relating to the Insurances, including, without
limitation, the collection of
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insurance claims, and from time to time to consult or retain advisers
or consultants to monitor or advise on any other claims relating to
the Vessels. The Borrower will provide such advisers and consultants
with all information and documents which they may from time to time
reasonably require and will reimburse the Agent on demand for all
reasonable costs and expenses incurred by the Agent in connection with
the consultation or retention of such advisers or consultants.
18.8 DELEGATION The Finance Parties may at any time and from time to time
delegate to any person any of their rights, powers, discretions and
remedies pursuant to the Security Documents, other than rights
relating to actions to be taken by the Majority Banks or the Banks as
a group on such terms as they may consider appropriate (including the
power to sub-delegate).
18.9 RIGHTS ETC. CUMULATIVE Every right, power, discretion and remedy
conferred on the Finance Parties under or pursuant to the Security
Documents shall be cumulative and in addition to every other right,
power, discretion or remedy to which they may at any time be entitled
by law or in equity. The Finance Parties may exercise each of their
rights, powers, discretions and remedies as often and in such order as
they deem appropriate subject to obtaining the prior written consent
of the Majority Banks. The exercise or the beginning of the exercise
of any right, power, discretion or remedy shall not be interpreted as
a waiver of the right to exercise any other right, power, discretion
or remedy either simultaneously or subsequently.
18.10 NO ENQUIRY The Finance Parties shall not be concerned to enquire into
the powers of the Security Parties or of any person purporting to act
on behalf of any of the Security Parties, even if any of the Security
Parties or any such person shall have acted in excess of their powers
or if their actions shall have been irregular, defective or informal,
whether or not any Finance Parties had notice thereof.
18.11 CONTINUING SECURITY The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall have
been repaid in full and none of the Finance Parties shall be under any
further actual or contingent liability to any third party in relation
to the Vessels, the Insurances, Earnings or Requisition Compensation
or any other matter referred to in the Security Documents.
61
18.12 SECURITY CUMULATIVE The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Finance Parties or any of them for or in respect of
all or any part of the Indebtedness, and shall not merge with or
prejudice or be prejudiced by any such security or any other
contractual or legal rights of any of the Finance Parties, nor
affected by any irregularity, defect or informality, or by any
release, exchange or variation of any such security. Section 93 of the
Law of Property Xxx 0000 and all provisions which the Agent considers
analogous thereto under the law of any other relevant jurisdiction
shall not apply to the security constituted by the Security Documents.
18.13 RE-INSTATEMENT If any Finance Party takes any steps to exercise any
of its rights, powers, remedies or discretions pursuant to the
Security Documents and the result shall be adverse to the Finance
Parties, the Borrower and the Finance Parties shall be restored to
their former positions as if no such steps had been taken.
18.14 NO LIABILITY None of the Finance Parties, nor any agent or employee
of any Finance Party, nor any receiver and/or manager appointed by the
Agent, shall be liable for any losses which may be incurred in or
about the exercise of any of the rights, powers, discretions or
remedies of the Finance Parties under or pursuant to the Security
Documents nor liable as mortgagee in possession for any loss on
realisation or for any neglect or default of any nature for which a
mortgagee in possession might otherwise be liable unless such Finance
Party's action constitutes gross negligence or wilful misconduct.
18.15 RESCISSION OF PAYMENTS ETC. Any discharge, release or reassignment by
any of the Finance Parties of any of the security constituted by, or
any of the obligations of any Security Party contained in, any of the
Security Documents shall be (and be deemed always to have been) void
if any act (including, without limitation, any payment) as a result of
which such discharge, release or reassignment was given or made is
subsequently wholly or partially rescinded or avoided by operation of
any law, unless such Finance Party's action constitutes gross
negligence or wilful misconduct.
18.16 SUBSEQUENT ENCUMBRANCES If the Agent receives notice of any
subsequent Encumbrance (other than any Encumbrance permitted by the
terms of this Agreement) affecting any Vessel or all or any part of
the Insurances, Earnings or Requisition Compensation, the Agent may
open a new account in its books for the
62
Borrower. If the Agent does not open a new account, then (unless the
Encumbrance is permitted by the terms of this Agreement or the Agent
gives written notice to the contrary to the Borrower) as from the time
of receipt by the Agent of notice of such subsequent Encumbrance, all
payments made to the Agent shall be treated as having been credited to
a new account of the Borrower and not as having been applied in
reduction of the Indebtedness.
18.17 RELEASES If any Finance Party shall at any time in its discretion
release any party from all or any part of any of the Security
Documents or from any term, covenant, clause, condition or obligation
contained in any of the Security Documents, the liability of any other
party to the Security Documents shall not be varied or diminished.
18.18 CERTIFICATES Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for manifest
error or on any question of law, be conclusive evidence as against the
Borrower of that amount.
18.19 SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations and
warranties on the part of the Borrower contained in this Agreement
shall survive the execution of this Agreement and the advance of the
Facility or any part thereof.
18.20 COUNTERPARTS This Agreement may be executed in any number of
counterparts each of which shall be original but which shall together
constitute the same instrument.
18.21 THIRD PARTY RIGHTS Notwithstanding the provisions of the Contracts
(Rights of Third Parties) Xxx 0000, no term of this Agreement is
enforceable by a person who is not a party to it.
19 LAW AND JURISDICTION
19.1 GOVERNING LAW This Agreement shall in all respects be governed by and
interpreted in accordance with English law.
19.2 JURISDICTION For the exclusive benefit of the Finance Parties, the
parties to this Agreement irrevocably agree that the courts of England
are to have jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement
63
and that any Proceedings may be brought in those courts. The Borrower
irrevocably waives any objection which it may now or in the future
have to the laying of the venue of any Proceedings in any court
referred to in this Clause, and any claim that those Proceedings have
been brought in an inconvenient or inappropriate forum.
19.3 ALTERNATIVE JURISDICTIONS Nothing contained in this Clause shall limit
the right of the Finance Parties to commence any Proceedings against
the Borrower in any other court of competent jurisdiction nor shall
the commencement of any Proceedings against the Borrower in one or
more jurisdictions preclude the commencement of any Proceedings in any
other jurisdiction, whether concurrently or not.
19.4 SERVICE OF PROCESS Without prejudice to the right of the Finance
Parties to use any other method of service permitted by law, the
Borrower irrevocably agrees that any writ, notice, judgment or other
legal process shall be sufficiently served on it if addressed to it
and left at or sent by post to the Address for Service, and in that
event shall be conclusively deemed to have been served at the time of
leaving or, if posted, at 9.00 a.m. on the third Business Day after
posting by prepaid first class registered post.
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
64
SIGNED by )
duly authorised for and on behalf )
of DNB NOR BANK ASA )
(as the Agent) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CITIBANK N.A. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DNB NOR BANK ASA )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of FORTIS CAPITAL CORP )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of THE GOVERNOR AND COMPANY )
OF THE BANK OF SCOTLAND )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of HSBC BANK PLC )
(as a Bank) )
in the presence of:- )
65
SIGNED by )
duly authorised for and on behalf )
of HSH NORDBANK AG )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of ING BANK N.V. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of LLOYDS TSB BANK PLC )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of NIBC BANK N.V. )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of NORDEA BANK NORGE ASA )
GRAND CAYMAN BRANCH )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of SCOTIABANK EUROPE PLC )
(as a Bank) )
in the presence of:- )
66
SIGNED by )
duly authorised for and on behalf )
of CALYON CORPORATE AND )
INVESTMENT BANK )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DANISH SHIP FINANCE A/S )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of BAYERISCHE HYPO-UND )
VEREINSBANK AG )
(as a Bank) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DNB NOR BANK ASA )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CITIGROUP GLOBAL )
MARKETS LIMITED )
(as an Arranger) )
in the presence of:- )
67
SIGNED by )
duly authorised for and on behalf )
of NORDEA BANK FINLAND PLC, )
NEW YORK BRANCH )
(as an Arranger) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of DNB NOR BANK ASA )
(as a Book Runner) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of CITIGROUP GLOBAL )
MARKETS LIMITED )
(as a Book Runner) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of NORSK TEEKAY HOLDINGS LTD )
in the presence of:- )
68
(This is the form of the amended and restated facility agreement dated 26 June
2003 as further amended and restated on the Effective Date (as defined in the
deed of consent and amendment and restatement dated 5 October 2006 to which this
is an appendix)
DATED 26 JUNE 2003
NORSK TEEKAY HOLDINGS LTD
(AS BORROWER)
- AND -
CITIGROUP GLOBAL MARKETS LIMITED
DNB NOR BANK ASA
AND
NORDEA BANK FINLAND PLC, NEW YORK BRANCH
(AS MANDATED LEAD ARRANGERS)
- AND -
DNB NOR BANK ASA
AND OTHERS
(AS BANKS)
- AND -
CITIGROUP GLOBAL MARKETS LIMITED
AND
DNB NOR BANK ASA
(AS BOOK RUNNERS)
- AND -
DNB NOR BANK ASA
(AS FACILITY AGENT AND SECURITY TRUSTEE)
----------
FURTHER AMENDED AND RESTATED
US$550,000,000 SECURED
REDUCING REVOLVING LOAN
FACILITY AGREEMENT
----------
XXXXXXXXXX XXXXXXX
XXX, XX. XXXX'X XXXXXXXXXX
XXXXXX XX0X 0XX
TEL: 000 0000 0000
FAX: 000 0000 0000
REF: 819/822
CONTENTS
PAGE
----
1 Definitions and Interpretation........................................ 2
2 The Facility and its Purpose.......................................... 16
3 Conditions Precedent and Subsequent................................... 22
4 Representations and Warranties........................................ 25
5 Repayment and Prepayment.............................................. 28
6 Interest.............................................................. 29
7 Fees.................................................................. 30
8 Security Documents.................................................... 31
9 Agency and Trust...................................................... 31
10 Covenants............................................................. 40
11 Earnings.............................................................. 44
12 Events Of Default..................................................... 44
13 Set-Off and Lien...................................................... 48
14 Assignment and Sub-Participation...................................... 50
15 Payments, Mandatory Prepayment, Reserve Requirements and Illegality... 52
16 Communications........................................................ 56
17 General Indemnities................................................... 57
18 Miscellaneous......................................................... 59
19 Law and Jurisdiction.................................................. 63
SCHEDULE 1............................................................... 65
The Banks, the Commitments and the Proportionate Shares............... 65
SCHEDULE 2............................................................... 68
The Vessels........................................................... 68
SCHEDULE 3............................................................... 69
TNOL Vessels.......................................................... 69
SCHEDULE 4............................................................... 70
Form of Transfer Certificate.......................................... 70
SCHEDULE 5............................................................... 72
Form of Drawdown Notice............................................... 72
SCHEDULE 6............................................................... 73
Calculation of the Mandatory Cost..................................... 73
SCHEDULE 7............................................................... 76
The Arrangers......................................................... 76
SCHEDULE 8............................................................... 77
Schedule of Reductions................................................ 77
