UP TO US $1,000,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT Dated as of February 19, 2013 Among PACIFIC SHARAV S.ÀR.L. AND PACIFIC DRILLING VII LIMITED as Borrowers PACIFIC DRILLING S.A. as Guarantor EKSPORTKREDITT NORGE AS as GIEK Facility...
Exhibit 99.1
UP TO US $1,000,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT
Dated as of February 19, 2013
Among
PACIFIC SHARAV S.ÀR.L. AND PACIFIC DRILLING VII LIMITED
as Borrowers
as Guarantor
EKSPORTKREDITT NORGE AS
as GIEK Facility Lender
THE BANKS AND FINANCIAL INSTITUTIONS
Listed in Schedule 1 as Commercial Facility Lenders
CITIBANK N.A. AND DNB MARKETS INC.
as Structuring Banks and as Syndication Agents
CITIBANK N.A. AND DNB BANK ASA, NEW YORK BRANCH
as Global ECA Coordinators
CITIBANK N.A.
as Documentation Agent
DNB BANK ASA, NEW YORK BRANCH
as Administrative Agent, GIEK Facility Agent, Security Agent and Account Bank
CITIBANK N.A., DNB BANK ASA, NEW YORK BRANCH, ABN AMRO CAPITAL USA LLC,
ING CAPITAL LLC, SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.) AND STANDARD
CHARTERED BANK PLC
as Mandated Lead Arrangers
and
CITIBANK N.A., DNB MARKETS INC., ABN AMRO CAPITAL USA LLC, ING CAPITAL LLC,
SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.) AND STANDARD CHARTERED BANK
PLC
as Bookrunners
INDEX
Section | Page | |||||
1 |
INTERPRETATION |
2 | ||||
2 |
FACILITY |
29 | ||||
3 |
POSITION OF THE LENDERS |
29 | ||||
4 |
DRAWDOWN |
30 | ||||
5 |
INTEREST |
32 | ||||
6 |
INTEREST PERIODS |
36 | ||||
7 |
DEFAULT INTEREST |
37 | ||||
8 |
REPAYMENT, PREPAYMENT AND CANCELLATION |
39 | ||||
9 |
CONSOLIDATION OF REPAYMENTS |
44 | ||||
10 |
CONDITIONS PRECEDENT |
44 | ||||
11 |
REPRESENTATIONS AND WARRANTIES |
45 | ||||
12 |
GENERAL UNDERTAKINGS |
51 | ||||
13 |
CORPORATE UNDERTAKINGS |
56 | ||||
14 |
INSURANCE |
62 | ||||
15 |
VESSEL COVENANTS |
67 | ||||
16 |
SECURITY COVER |
71 | ||||
17 |
PAYMENTS AND CALCULATIONS |
73 | ||||
18 |
APPLICATION OF RECEIPTS |
75 | ||||
19 |
EARNINGS ACCOUNTS; GROUP CORPORATE ACCOUNTS |
76 | ||||
20 |
EVENTS OF DEFAULT |
76 | ||||
21 |
FEES AND EXPENSES |
81 | ||||
22 |
INDEMNITIES |
83 | ||||
23 |
NO SET-OFF OR WITHHOLDING; TAX INDEMNITIES |
85 | ||||
24 |
ILLEGALITY, ETC |
89 | ||||
25 |
INCREASED COSTS |
90 | ||||
26 |
SET-OFF |
92 | ||||
27 |
SHARING |
93 | ||||
28 |
ROLE OF THE ADMINISTRATIVE AGENT |
95 | ||||
29 |
TRANSFERS RELATING TO BORROWERS; TRANSFERS BY LENDERS AND CHANGES IN LENDING OFFICES |
104 | ||||
30 |
VARIATIONS AND WAIVERS; PLATFORM |
109 | ||||
31 |
NOTICES |
113 |
i
32 |
PDSA GUARANTY |
116 | ||||
33 |
SUPPLEMENTAL |
118 | ||||
34 |
LAW AND JURISDICTION |
120 |
Schedules
Schedule 1 | - | Commercial Facility Lenders, Commitments & Lending Offices | ||
Schedule 2 | - | Drawdown Notice | ||
Schedule 3 | - | Conditions Precedent | ||
Schedule 4 | - | Transfer Certificate | ||
Schedule 5 | - | Mandatory Cost Formula | ||
Schedule 6 | - | Disclosed Litigation | ||
Schedule 7 | - | Pre-Approved Flag States | ||
Schedule 8 | - | Estimated Project Costs | ||
Schedule 9 | - | Exceptions to Representations | ||
Schedule 10 | - | List of Norwegian Suppliers and Contracts |
Exhibits
Exhibit A | - | Form of Assignment of Accounts | ||
Exhibit B | - | Form of Assignment of Construction Contract | ||
Exhibit C | - | Form of Assignment of Refund Guarantee | ||
Exhibit D-1 | - | Form of Luxembourg Share Pledge Agreement | ||
Exhibit D-2 | - | Form of British Virgin Islands Share Pledge Agreement | ||
Exhibit E | - | Form of First Preferred Ship Mortgage | ||
Exhibit F | - | Form of Assignment of Insurances | ||
Exhibit G | - | Form of Assignment of Re-insurances | ||
Exhibit H | - | Form of Assignment of Earnings | ||
Exhibit I | - | Form of Assignment of Management Agreement with Manager’s Consent | ||
Exhibit J | - | Form of Account Control Agreement | ||
Exhibit K | - | Form of Assignment of Internal Charter | ||
Exhibit L | - | Form of Management Agreement | ||
Exhibit M | - | Form of Insurance Broker’s Report |
ii
SENIOR SECURED CREDIT FACILITY AGREEMENT
THIS SENIOR SECURED CREDIT FACILITY AGREEMENT (this “Agreement”), dated as of February 19, 2013.
AMONG
(1) | PACIFIC SHARAV S.ÀR.L., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand-Duchy of Luxembourg, with its registered office at 37, rue d’Anvers, X-0000, Xxxxxxxxxx and registered with the Luxembourg trade and companies register under number B.169724 (“PSS”), as owner and joint and several borrower (together with its successors and assigns permitted under Section 29.1, a “Borrower”); |
(2) | PACIFIC DRILLING VII LIMITED, a company incorporated under the laws of the British Virgin Islands (“PDVIIL”), as owner and joint and several borrower (together with its successors and assigns permitted under Section 29.1, a “Borrower”); |
(3) | PACIFIC DRILLING S.A., a public limited liability company (société anonyme) incorporated under the laws of the Grand-Duchy of Luxembourg, with its registered office at 37, rue d’Anvers, X-0000 Xxxxxxxxxx and registered with the Luxembourg trade and companies register under number B.159658 (“PDSA”), as guarantor (the “Guarantor”); |
(4) | EKSPORTKREDITT NORGE AS, with registered offices at Hieronymus Xxxxxxxxxx xxxx 0, XX-0000 Xxxx, Xxxxxx, as GIEK facility lender (the “GIEK Facility Lender”); |
(5) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Commercial Facility Lenders (the “Commercial Facility Lenders”); |
(6) | CITIBANK N.A. (“Citibank”) and DNB MARKETS INC. (“DNB Markets”), as structuring banks (the “Structuring Banks”) and as syndication agents (the “Syndication Agents”); |
(7) | CITIBANK and DNB BANK ASA, NEW YORK BRANCH (“DNB”), as global ECA coordinators (the “Global ECA Coordinators”) |
(8) | CITIBANK, as documentation agent (the “Documentation Agent”); |
(9) | DNB, as administrative agent and security agent (together with any successor administrative agent and security agent appointed pursuant to Section 28, the “Administrative Agent” or as applicable, the “Security Agent”) and as account bank (in such capacity, the “Account Bank”) and as GIEK facility agent (in such capacity, the “GIEK Facility Agent”); |
(10) | CITIBANK, DNB, ABN AMRO CAPITAL USA LLC, ING CAPITAL LLC, SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.) and STANDARD CHARTERED BANK PLC, as mandated lead arrangers (the “Mandated Lead Arrangers”); and |
(11) | CITIBANK, DNB MARKETS, ABN AMRO CAPITAL USA LLC, ING CAPITAL LLC, SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.) and STANDARD CHARTERED BANK PLC, as book runners (the “Bookrunners”). |
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PRELIMINARY STATEMENTS
(A) | The Borrowers (capitalized terms not otherwise defined herein shall have the meaning set forth in Section 1.1) have requested, and the Lenders have agreed to make available to the Borrowers, loan facilities in the aggregate principal amount of up to the lower of (i) $1,000,000,000 and (ii) 72% of the Project Costs (defined below), to be made as follows upon the terms and subject to the conditions set forth in this Agreement: |
(a) by the GIEK Facility Lender, a term loan facility of up to $500,000,000 conditional upon the issuance of the GIEK Guarantees;
(b) by the Commercial Facility Lenders, a term loan facility of up to $500,000,000;
to provide pre-delivery and post-delivery financing to the Borrowers for the Collateral Vessels (including the payment of the Project Costs and the making of Reimbursement Payments).
(B) | GIEK has agreed to guarantee payment of the GIEK Facility Loan to the GIEK Facility Lender in connection with the financing of the Eligible Contracts, in the circumstances, and up to maximum amounts, specified in the GIEK Guarantees. |
(C) | The Guarantor has agreed to guarantee all Obligations of the Borrowers under the Finance Documents. |
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1 | INTERPRETATION |
1.1 Definitions. Subject to Section 1.4, in this Agreement:
“Account Bank” means DNB Bank ASA, New York Branch, acting in such capacity initially through its office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
“Account Control Agreement” means an account control agreement in respect of an Earnings Account by and among an Obligor (or Internal Charterer, as applicable), the Security Agent and the Account Bank in substantially the form of Exhibit J hereto;
“Administrative Agent” means DNB Bank ASA, New York Branch, acting in such capacity through its office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, or any successor of it appointed under Section 28;
“Advance” means each GIEK Facility Advance and each Commercial Facility Advance;
“Affected Lender” means either, as applicable, (i) any Commercial Facility Lender referenced in Section 5.7(d) or (ii) the GIEK Facility Lender pursuant to Section 5.7(e);
“Affiliate” means, with respect to any Person, any Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person
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shall mean the power, direct or indirect, (i) to vote 50% or more of the securities or other interests having ordinary voting power for the election of directors of such Person or of Persons serving a similar function, or (ii) to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise;
“Approved Brokers” means each of Fearnleys, XX Xxxxxx, ODS Petrodata and Clarksons and each other Person that is an independent shipbroker and that is reasonably satisfactory to the Administrative Agent;
“Approved Flag State” means any of the following:
(a) each state registry or flag listed in Schedule 7; and
(b) any other state registry or flag reasonably acceptable to the Majority Lenders; provided that no change of state registry or flag shall be permitted without the prior written approval of the Majority Lenders;
“Approved Manager” means any direct or indirect Subsidiary of the Guarantor controlled by any member of the Group that is appointed and remains manager of a Collateral Vessel by the applicable Borrower;
“Assigned Assets” means the assets assigned or charged by an Obligor to the Security Agent pursuant to the Ship Mortgages, the Assignments of Construction Contracts or any other Finance Document to which such Obligor is, or will be, a party;
“Assignment of Accounts” means the first priority assignment of each Earnings Account by an Obligor (or Internal Charterer, as applicable), in favor of the Security Agent, substantially in the form of Exhibit A hereto, together with appropriate notices and acknowledgments thereof;
“Assignment of Construction Contract” means each first priority assignment in favor of the Security Agent of the Construction Contract relating to each Collateral Vessel, together with appropriate notices to and, to the extent obtainable by the Borrowers using commercially reasonable efforts, acknowledgment of the Builder relating thereto, in substantially the form of Exhibit B hereto;
“Assignment of Earnings” means each first priority assignment of earnings covering a Collateral Vessel in favor of the Security Agent granted by the relevant Borrower or Internal Charterer, as applicable, together with appropriate notices to the relevant charterer or drilling contract operator relating thereto, in substantially the form of Exhibit H hereto;
“Assignment of Insurances” means each first priority assignment of insurances, together with appropriate notices thereof, endorsements on such policies, as required by the terms of such insurances and loss payable clauses satisfactory to the Security Agent, covering each Collateral Vessel in favor of the Security Agent granted by the relevant Borrower, and any Internal Charterer or other Affiliate thereof that has an interest in such insurances in substantially the form of Exhibit F hereto;
“Assignment of Internal Charter” means each first priority assignment of internal charter, including the Earnings in connection with such Internal Charter, together with appropriate notices thereof, and consents thereto, covering each Collateral Vessel in favor of the Security Agent granted by the relevant Borrower in substantially the form of Exhibit K hereto;
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“Assignment of Management Agreement” means each first priority assignment in favor of the Security Agent by the relevant Borrower of any Management Agreement, and by the initial Approved Manager or any replacement thereof of any sub-management agreement, together with appropriate notices and acknowledgments thereof, in substantially the form of Exhibit I hereto;
“Assignment of Refund Guarantee” means each first priority assignment in favor of the Security Agent of the Refund Guarantee relating to each Construction Contract, together with appropriate notices to and, to the extent obtainable by the Borrowers using commercially reasonable efforts, acknowledgments of the relevant Refund Guarantor relating thereto, in substantially the form of Exhibit C hereto;
“Assignment of Re-insurances” means each first priority assignment of re-insurances, together with appropriate notices thereof, endorsements on such policies, as required by the terms of such insurances and loss payable clauses satisfactory to the Security Agent, covering each Collateral Vessel in favor of the Security Agent granted by the relevant Borrower and any Affiliate thereof that has an interest in such insurances in substantially the form of Exhibit G hereto;
“Audited Financial Statements” means the consolidated audited financial statements of the Group and any other entities required to be consolidated in such statements in accordance with any applicable laws or regulations;
“Availability Period” has the meaning set forth in Section 4.8;
“Back-stop Date” means the last to occur of:
(a) (i) in respect of the Pacific Sharav, November 30, 20141 and (ii) in respect of the Pacific Meltem, November 30, 2014; or
(b) such later date as the Administrative Agent may, with the authorization of all the Lenders, agree with the Borrowers;
“Borrower” has the meaning specified in the recital of parties to this Agreement;
“Borrower or Internal Charterer or Approved Manager Change of Control Event” means at any time during the Security Period, any of the Borrowers or the Internal Charterer or the Approved Manager shall cease to be (i) Subsidiaries of the Guarantor, or (ii) 100% owned directly or indirectly by the Guarantor, provided however that ownership shares of the Borrowers or Internal Charterer or Approved Manager may be held by other Persons to the extent necessary or advisable under local law for Collateral Vessel operations under Satisfactory Drilling Contracts or any other drilling contract, so long as at all times (A) the Borrowers, the Internal Charterer and the Approved Manager shall remain under control of the Guarantor, and (B) the Guarantor shall own, directly or indirectly, at least 51% of the shares of the Borrowers, the Internal Charterer and the Approved Manager;
“British Virgin Islands Share Pledge Agreement” means a first priority equitable mortgage over shares executed by PDGL, the shareholder of PDVIIL, in favor of the Security Agent, in substantially the form of Exhibit D-2 hereto, together with appropriate irrevocable proxies, undated share transfers, undated resignations of all officers of PDVIIL, and certificates evidencing such shares;
1 | GIEK Offer Letter to be aligned with this date. |
4
“Builder” means Samsung Heavy Industries Co., Ltd., a corporation incorporated and existing in the Republic of Korea whose registered office is at 34th Floor, Samsung Life Insurance Xxxxxx Xxxxx 0000-00, Xxxxxx-Xxxx, Xxxxxx-Xx, Xxxxx, Xxxxx 137-857;
“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in (i) New York, New York, (ii) Houston, Texas, (iii) Luxembourg or (iv) Oslo, Norway are authorized or required by law to close;
“Capital Stock” of any Person means any and all shares, interests, participations or other equivalent (however designated) or corporate stock of such Person;
“Cash Equivalents” shall mean the following (all of which shall be valued at market value and freely disposable and for the avoidance of doubt none of the following shall be deemed disqualified from being freely disposable by reason of being included in minimum liquidity calculations under this Agreement or other agreements respecting Indebtedness, or being subject to a Security Interest): (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender and certificates of deposit with maturities of one year or less from the date of acquisition and overnight bank deposits of any other commercial bank whose principal place of business is organized under the laws of any country that is a member of the Organization for Economic Cooperation and Development or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having capital and surplus in excess of $200,000,000, (c) commercial paper of any issuer rated at least A-2 by Standard & Poor’s Ratings Group or P-2 by Xxxxx’x Investors Service, Inc. with maturities of one year or less from the date of acquisition, and (d) additional money market investments with maturities of one year or less from the date of acquisition rated at least A-1 or AA by Standard & Poor’s Ratings Group or P-1 or Aa by Xxxxx’x Investors Service, Inc.;
“Certificate of Compliance” has the meaning set forth in Section 12.4(c);
“CIRR Rate” means the Commercial Interest Reference Rate determined by the Organisation for Economic Co-operation and Development (OECD) according to the “Arrangement on Officially Supported Export Credit”, and being for Advances relating to:
(a) the Pacific Khamsin, 3.05% per annum,
(b) the Pacific Sharav, 3.96% per annum, and
(c) the Pacific Meltem, 2.37% per annum,
each being offered for twelve (12) years for the currency USD;
“Classification” means the classification set out in paragraph (xiv)(4) of Part B of Schedule 3 or other highest classification and no material overdue recommendations or adverse notations available for vessels of the same age and type as the Collateral Vessels with its Classification Society or such other classification as the Administrative Agent may, with the authorization of the Majority Lenders, agree shall be treated as the Classification of the Collateral Vessels for the purposes of the Finance Documents; provided that no change in Classification shall occur without Majority Lenders’ prior written consent;
5
“Classification Society” means Det Norske Veritas or such other classification society that is a member of the International Association of Classification Societies (IACS) as the Administrative Agent shall approve (acting on the authorization of the Majority Lenders) from time to time;
“Closing Date” means the date on which the preconditions set forth in Section 10.2 are satisfied and the initial Advance is made;
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time;
“Collateral” means the Collateral Vessels and all other property securing the Obligations of all of the Obligors or any one such Obligor under any Finance Document;
“Collateral Vessel” means either of, and “Collateral Vessels” means collectively, all of the Pacific Sharav and the Pacific Meltem, in each case, together with the equipment, spares, drawings, plans, specifications (and any intellectual property related to such drawings, plans and specifications) certificates, warranties, buyer furnished equipment and any other documents or items delivered or to be delivered by the Builder under the relevant Construction Contract in relation to such Collateral Vessel;
“Commercial Facility Advance” means the principal amount of each borrowing by the Borrowers under this Agreement of a portion of the Commercial Facility Loan Commitments;
“Commercial Facility Commitment Fee” has the meaning specified in Section 21.1(a);
“Commercial Facility Lender” means a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Administrative Agent under Section 29.14) or its permitted transferee, successor or assign;
“Commercial Facility Loan” means the aggregate principal amount of the Commercial Facility Advances for the time being outstanding under this Agreement;
“Commercial Facility Loan Commitment” means, in relation to each Commercial Facility Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “Total Commercial Facility Loan Commitments” means the aggregate of the Commercial Facility Loan Commitments of all the Commercial Facility Lenders);
“Commercial Facility Loan Contribution” means, in relation to a Commercial Facility Lender, the part of the Commercial Facility Loan which is owing to that Commercial Facility Lender (and “Total Commercial Facility Loan Contributions” means the aggregate of the Commercial Facility Loan Contributions of all the Commercial Facility Lenders);
“Commercial Facility Loan Margin” means 3.50% per annum;
“Commercial Facility Loan Maturity Date” has the meaning specified in Section 8.2(c);
“Commercial Facility Meltem Advance” has the meaning specified in Section 4.2(c);
“Commercial Facility Participation Fee” has the meaning specified in Section 21.1(e);
“Commercial Facility Sharav Advance” has the meaning specified in Section 4.2(c);
6
“Commitment” means:
(a) in relation to the GIEK Facility Lender, the GIEK Facility Loan Commitment; and
(b) in relation to each Commercial Facility Lender, its Commercial Facility Loan Commitment;
(and “Total Commitments” means the aggregate of the GIEK Facility Loan Commitment and the Total Commercial Facility Loan Commitments);
“Compulsory Acquisition” means requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of a Collateral Vessel by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition for title;
“Confidential Information” means information that any Obligor, any Internal Charterer or any Approved Manager or the Pledgor, furnishes to the Administrative Agent or any Lender, but does not include any such information that is or becomes generally available to the public (other than as a result of a wrongful disclosure by the Administrative Agent or any Lender) or that is or becomes available to the Administrative Agent or such Lender from a source other than the Obligors, an Internal Charterer or an Approved Manager or the Pledgor (other than as a result of a wrongful disclosure by the Administrative Agent or any Lender);
“Consolidated” refers to the consolidation of accounts in accordance with GAAP;
“Construction Contracts” means, together, the Sharav Construction Contract and the Meltem Construction Contract and “Construction Contract” means either of them;
“Contract Amount” shall mean the contract amount referred to in (i) the Offer for Guarantee Policy Buyer Credit Guarantee No. 102137 issued by GIEK with PSS as Buyer/Debtor named therein dated December 19, 2012 and (ii) the Offer for Guarantee Policy Buyer Credit Guarantee No. 102285 issued by GIEK with PDVIIL as Buyer/Debtor named therein dated December 19, 2012 (in each case, as the same may be amended, modified or supplemented from time to time), and on the date hereof such amount specified therein as being approximately $678,000,000.
“Contract Price” means, with respect to the Sharav Construction Contract $497,000,000 subject to adjustment as referred to in the Sharav Construction Contract and Section 12.16(b), and with respect to the Meltem Construction Contract $507,365,000, subject to adjustment as referred to in the Meltem Construction Contract and Section 12.16(b);
“Contractual Currency” has the meaning given in Section 22.4;
“Contribution” means:
(a) in relation to the GIEK Facility Lender, the GIEK Facility Loan; and
(b) in relation to each Commercial Facility Lender, its Commercial Facility Loan Contribution;
(and “Total Contributions” means the aggregate of the GIEK Facility Loan and the Total Commercial Facility Loan Contributions);
7
“Default” means an event or circumstance which, with only the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
“Defaulting Lender” means at any time, (i) any Lender that has failed for two (2) or more Business Days to comply with its obligations under this Agreement to make an Advance or make any other payment due hereunder (as used in this Defaulting Lender definition, each, a “funding obligation”), unless such Lender has notified the Administrative Agent and the Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding has not been satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing), or unless such failure is due to the occurrence of events of force majeure or technical reasons beyond such Lender’s control, and such Lender has provided notice and details of such event to the Administrative Agent as soon as practicable, (ii) any Lender that has notified the Administrative Agent or the Borrowers in writing, or has stated publicly, that it does not intend to comply with its funding obligations hereunder, unless such writing or statement states that such position is based on such Lender’s determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing or public statement), (iii) any Lender that has defaulted on its funding obligations under the PFA, or (iv) any Lender with respect to which a Lender Insolvency Event has occurred and is continuing with respect to such Lender. Promptly upon a determination by the Administrative Agent that a Lender is a Defaulting Lender under any of Sections (i) through (iv), the Administrative Agent will give notice of such determination by the Administrative Agent to the Borrowers and the Lenders;
“Delivery Date” means, in respect of each Collateral Vessel, the earlier of (i) the date of actual delivery by the Builder of such Collateral Vessel to the relevant Borrower in accordance with the terms of the relevant Construction Contract and as evidenced by a protocol of delivery and acceptance executed by the relevant Borrower and the Builder; and (ii) the Back-stop Date in respect of such Collateral Vessel;
“Disclosed Litigation” means any action, suit, investigation, litigation or proceeding against an Obligor outstanding as of the Closing Date and involving claims in excess of $5,000,000 as more fully described in Schedule 6 hereto;
“Dollars” and “$” means the lawful currency for the time being of the United States of America;
“Drawdown Date” means each date requested by the Borrowers for an Advance to be made or, as the context may require, the date on which the Advance concerned is actually made;
“Drawdown Notice” means a notice in the form set out in Schedule 2 (or in any other form which the Administrative Agent approves);
“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrowers or, as the case may be, an Internal Charterer, which arise out of the use or operation of the Collateral Vessels, including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to the Borrowers in the event of requisition of a Collateral Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a Collateral Vessel;
8
(b) all moneys which are at any time payable under the Insurances in respect of loss of earnings; and
(c) if and whenever a Collateral Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other Person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Collateral Vessel;
Notwithstanding the foregoing, and for the avoidance of doubt, Earnings shall not include any moneys payable to other Persons who are party to a Satisfactory Drilling Contract or any other drilling contract for Collateral Vessel operations in order to satisfy local content requirements, provided that such moneys shall not exceed 15% of the daily rate under the applicable drilling contract unless the Majority Lenders shall have provided their prior written consent.
“Earnings Account” means each account in the name of the applicable Borrower, an Internal Charterer or the Guarantor held with the Account Bank and designated “Pacific Sharav S.ÀR.L. - Earnings Account “, “Pacific Drilling VII Limited - Earnings Account”, Pacific Drilling S.A. – Earnings Account”, or “[Name of Internal Charterer] – Earnings Account”, as the case may be, or any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the applicable Borrower and the Security Agent as an Earnings Account for the purposes of this Agreement;
“Eligible Contract” means collectively, the Sharav Construction Contract, the Meltem Construction Contract together with any other contracts for the delivery of Norwegian equipment and services, purchase orders, financial commitments or employment obligations related to the construction and operational readiness of the Collateral Vessels and the Pacific Khamsin, in each case, eligible for export credit agency support from GIEK, each as more specifically listed in Schedule 10 (List of Norwegian Suppliers and Contracts), with an estimated value of $678,000,000;
“Environmental Action” means any action, suit, demand, demand letter, claim, notice of noncompliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement and relating to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to public health, public safety (as such alleged injury or threat of injury to public health or public safety is related to exposure to Hazardous Materials) or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief;
“Environmental Law” means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency interpretation, legally applicable policy or guidance relating to pollution or protection of the environment, health (as it is related to exposure to Hazardous Materials), safety (as it is related to exposure to Hazardous Materials) or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials;
“Environmental Permit” means any permit, license, consent, authorization or any other approval required at any time by any Environmental Law for the operation of the Collateral Vessels or the carriage of cargo therein or otherwise applicable to a Collateral Vessel in connection with its trade and the location in which the Collateral Vessel operates from time to time;
9
“Equity Interests” means shares of capital stock, voting rights, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest;
“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended from time to time;
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Obligor, is treated as a single employer under Section 414(b) or 414(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) or 414(o) of the Code;
“ERISA Event” means any of the following:
(a) a Reportable Event with respect to a Plan;
(b) a failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived;
(c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan;
(d) a determination that a Plan is, or is expected to be, in “at risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code);
(e) the receipt by any Obligor or any of its ERISA Affiliates from a plan administrator of a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization (within the meaning of Title IV of ERISA) or in “endangered status” or “critical status” (as defined in Section 305(b) of ERISA);
(f) the filing pursuant to Section 431 of the Code or Section 304 of ERISA of an application for the extension of any amortization period with respect to any Multiemployer Plan;
(g) a failure by any Obligor or any of its ERISA Affiliates to make any required contribution with respect to any Plan or any Multiemployer Plan on or before the due date thereof if such failure, together with all other such failures then continuing, could reasonably be expected to result in a Material Adverse Effect;
(h) the incurrence by any Obligor or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of any Obligor or any if its ERISA Affiliates from any Plan or any Multiemployer Plan;
(i) the receipt by any Obligor or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to administer any Plan or Multiemployer Plan;
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(j) the filing of a notice of intent to terminate a Plan under Section 4041 of ERISA;
(k) the receipt by any Obligor or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from any Obligor or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability;
(l) the receipt by any Obligor or any of its ERISA Affiliates of notice from a plan actuary or plan administrator of the occurrence of any event or condition described in Section 4042(a)(2) or 4042(a)(4) of ERISA with respect to any Plan;
(m) any Foreign Plan Event;
(n) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) which could reasonably be expected to result in liability to any Obligor or any of its ERISA Affiliates; or
(o) the imposition of any Lien in favor of the PBGC with respect to any Plan or Multiemployer Plan;
“Event of Default” means any of the events listed in Section 20.1;
“Fair Market Value” for purposes of this Agreement has the meaning set forth in Section 13.8;
“Fee Letter” means collectively, such fee letters as are executed by and among Citibank, DNB, DNB Markets and the Guarantor in respect of the administrative agency fee and other fees therein referenced;
“Final Repayment Date” means, as the context may require, the Commercial Facility Loan Maturity Date or the GIEK Facility Loan Maturity Date;
“Finance Documents” means:
(a) this Agreement;
(b) the Fee Letters;
(c) any Hedging Agreements entered into among the Borrowers and a Hedging Bank;
(d) the Security Documents; and
(e) any other document (whether creating a Security Interest or not) which is executed at any time by a Borrower or any other Person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Finance Parties or any of them under this Agreement or any of the other documents referred to in this definition;
“Finance Party” means the Structuring Banks, the Bookrunners, the Mandated Lead Arrangers, the Global ECA Coordinators, the Documentation Agent, the Administrative Agent, the GIEK Facility Agent, the Syndication Agents, the Security Agent, the Account Bank, any Lender and any Hedging Bank, whether as at the date of this Agreement or at any later time;
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“Financing Lease” means any lease of property, real or Personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee;
“Flag State” means such state or territory as the Administrative Agent may approve pursuant to Section 15.2 as being the primary “flag state” of a Collateral Vessel for the purposes of the Finance Documents;
“Floating Rate Breakage Costs” means the amount (if any) by which:
(a) the interest which a Lender should have received for the period from the date of receipt of all or any part of its Contribution to the last day of the current Interest Period in respect of its Contribution, had the principal amount received been paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the London Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period;
“Foreign Plan Event” means, with respect to any Foreign Pension Plan, any of the following:
(a) the existence of unfunded liabilities in excess of the amount permitted under any applicable law or in excess of the amount that would be permitted absent a waiver from the relevant governmental authority;
(b) a failure to make any required contribution or payment, under any the applicable law, on or before the due date for such contribution or payment if such failure, together with all other such failures then continuing, could reasonably be expected to result in a Material Adverse Effect;
(c) the receipt of a notice by a governmental authority relating to the intention to terminate such Foreign Pension Plan or to appoint a trustee or similar official to administer such Foreign Pension Plan, or alleging the insolvency of such Foreign Pension Plan;
(d) the incurrence by any Obligor or any of its Subsidiaries or Affiliates of any liability under applicable law on account of the complete or partial termination of such Foreign Pension Plan or the complete or partial withdrawal of any participating employer therein; or
(e) the occurrence of any transaction that is prohibited under any applicable law and that could reasonably be expected to result in the incurrence of any liability by any Obligor or any of its Subsidiaries or Affiliates, or the imposition on any Obligor or any of its Subsidiaries or Affiliates of any fine, excise tax or penalty resulting from any noncompliance with any applicable law;
“Foreign Pension Plan” means any pension plan (other than a pension plan that provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant’s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s account) which is maintained outside the United
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States primarily for the benefit of employees working outside the United States and which, under applicable non-U.S. law, is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained exclusively by a governmental authority and with respect to which any Obligor or any of its Subsidiaries or Affiliates is or may be required to make contributions or other payments;
“GAAP” has the meaning specified in Section 1.6;
“GIEK” means Garanti-Instituttet for Eksportkreditt acting through its office at Dronning Mauds gate 15, Vika XX-0000 Xxxx, Xxxxxx;
“GIEK Account” means account number [—], held by GIEK with DNB Bank ASA, Oslo;
“GIEK Commitment Fee” has the meaning specified in Section 21.1(c);
“GIEK Facility Advance” means the principal amount of each borrowing by the Borrowers under this Agreement of a portion of the GIEK Facility Loan Commitment;
“GIEK Facility Commitment Fee” has the meaning specified in Section 21.1(b);
“GIEK Facility Lender” means Eksportkreditt Norge AS acting through its office at Hieronymus Heyerdahls gate 0, 0xx Xxxxx, XX-0000 Xxxx, Xxxxxx (or through another branch or office notified to the Administrative Agent under Section 29.14) or its transferee, successor or assign;
“GIEK Facility Loan” means the principal amount of the GIEK Facility Advances for the time being outstanding under this Agreement;
“GIEK Facility Loan Commitment” means, in relation to the GIEK Facility Lender, up to $500,000,000, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement;
“GIEK Facility Loan Margin” means 1.50% per annum, or such margin as agreed upon pursuant to Section 5.3(b);
“GIEK Facility Loan Maturity Date” has the meaning specified in Section 8.1(c);
“GIEK Facility Meltem Advance” has the meaning specified in Section 4.2(b);
“GIEK Facility Premium” has the meaning specified in Section 21.1(g);
“GIEK Facility Sharav Advance” has the meaning specified in Section 4.2(b);
“GIEK Guarantee” means either of, and “GIEK Guarantees” means collectively, both of the XXXX Xxxxxx Guarantee and the GIEK Sharav Guarantee;
“XXXX Xxxxxx Guarantee” means the guarantee issued or to be issued by GIEK in favor of the GIEK Facility Lender pursuant to which GIEK has guaranteed or will guarantee:
(a) the payment to the GIEK Facility Lender of up to 100% of the GIEK Facility Loan in respect of the Pacific Meltem in circumstances therein specified relating to political risk; and
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(b) the payment to the GIEK Facility Lender of up to 100% of the GIEK Facility Loan in respect of the Pacific Meltem in circumstances therein specified relating to commercial risk;
on terms agreed between the GIEK Facility Lender and GIEK;
“GIEK Sharav Guarantee” means the guarantee issued or to be issued by GIEK in favor of the GIEK Facility Lender pursuant to which GIEK has guaranteed or will guarantee:
(a) the payment to the GIEK Facility Lender of up to 100% of the GIEK Facility Loan in respect of the Pacific Sharav in circumstances therein specified relating to political risk; and
(b) the payment to the GIEK Facility Lender of up to 100% of the GIEK Facility Loan in respect of the Pacific Sharav in circumstances therein specified relating to commercial risk;
on terms agreed between the GIEK Facility Lender and GIEK;
“GIEK Participation Fee” has the meaning specified in Section 21.1(f);
“Government Entity” means and includes (whether having a distinct legal Personality or not) any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government;
“Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Government Entity;
“Group” means the Guarantor and its Subsidiaries on a Consolidated basis;
“Group Corporate Accounts” means one or more accounts of one or more members of the Group held by the Account Bank standing to the credit of which at all times are aggregate cash and Cash Equivalents in an amount set forth in Section 13.8(f);
“Guarantor” has the meaning specified in the recital of parties to this Agreement;
“Hazardous Materials” means (a) petroleum and petroleum products, byproducts or breakdown products, radioactive materials, asbestos containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law;
“Hedging Agreements” means agreements to hedge or defease interest rate and currency risks under this Agreement, including interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar hedging agreements on terms acceptable to the relevant Hedging Bank(s) party thereto;
“Hedging Bank” means any Lender or any Affiliate of any Lender that enters into one or more Hedging Agreements with a Borrower;
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“Indebtedness” of any Person at any date means, without duplication, (a) all indebtedness of such Person for borrowed money (other than current trade liabilities, customer advances and customer deposits incurred in the ordinary course of business and payable in accordance with customary practices) or which is evidenced by a note, bond, debenture or similar instrument, (b) the portion of the obligations of such Person under Financing Leases included as indebtedness on the balance sheet of such Person in accordance with GAAP, (c) the portion of the obligations of such Person in respect of acceptances issued or created for the account of such Person included as indebtedness on the balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person in respect of Hedging Agreements, valued at the xxxx-to-market value of such Hedging Agreements, which will be the unrealized loss (calculated on a net basis) on such Hedging Agreements to the Obligor or Subsidiary of an Obligor to such Hedging Agreements determined as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Obligor or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Obligor or Subsidiary pursuant to such Hedging Agreements, (e) all reimbursement or counter indemnity obligations of such Person in respect of amounts already paid under letters of credit, guarantees or similar instruments backing another Person’s obligations of the types described in the foregoing Sections (a), (b), (c) and (d), and (f) the aggregate Non-Qualified Partnership Liabilities of such Person;
“Insurances” means:
(a) all policies and contracts of insurance as outlined in Section 14.2, including but not limited to entries of the Collateral Vessels in any protection and indemnity or war risks association or equivalent, which are effected by or for the benefit of (amongst others) the Borrowers in respect of the Collateral Vessels, the Earnings or otherwise in relation to the Collateral Vessels; and
(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
“Interest Period” means a period determined in accordance with Section 6;
“Internal Charter” means any charter or other contract respecting the use or operations of any Collateral Vessel between a Borrower and any Internal Charterer, to the extent such charter does not materially adversely affect the interests of the Lenders;
“Internal Charterer” means any direct or indirect Subsidiary of the Guarantor controlled by any member of the Group that is not the owner of the relevant Collateral Vessel and that is party to any Satisfactory Drilling Contract or any other drilling contract in respect of a Collateral Vessel and entitled to receive Earnings thereunder;
“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);
“ISPS Code” means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation (“IMO”) adopted by a Diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) which took effect on 1 July 2004;
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“Lender Insolvency Event” means that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment; provided, however, that an Undisclosed Administration shall not constitute a Lender Insolvency Event pursuant to this clause (ii);
“Lenders” means the GIEK Facility Lender, any Commercial Facility Lender and each Person that shall become a party hereto as a Lender pursuant to a Transfer Certificate in accordance with Section 29.2, other than any Person that ceases to be a Lender party hereto pursuant to a Transfer Certificate;
“Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Lending Office” opposite its name on Schedule 1 hereto or in the Transfer Certificate pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent;
“LIBOR” means, for an Interest Period in relation to any Loan:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or Interest Period of that Loan) the Reference Bank Rate,
as of the specified time on the Quotation Date for the currency of that Loan and for a period comparable to the Interest Period of that Loan, provided, that LIBOR shall never be less than zero;
“Loan” means the principal amount of all Advances for the time being outstanding under this Agreement;
“Luxembourg Obligor” means any Obligor organized under the laws of Luxembourg;
“Luxembourg Share Pledge Agreement” means a first priority pledge of shares executed by PDGL, the shareholder of PSS, in favor of the Security Agent, in substantially the form of Exhibit D-1 hereto, together with the register of shareholders;
“Major Casualty” means any casualty to a Collateral Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $50,000,000 or the equivalent in any other currency;
“Majority Lenders” means, Lenders, including at least one (1) Commercial Facility Lender, owed or holding greater than 66 2/3% of the sum of the Advances and undrawn Commitments outstanding at such time;
“Manager’s Subordination Undertaking” means an undertaking by any Approved Manager which is a member of the Group given or to be given to the Security Agent in form and substance satisfactory to the Security Agent;
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“Management Agreement” means a management agreement substantially in the form of Exhibit L with such changes as the Borrower and the Administrative Agent shall agree;
“Mandated Lead Arrangers” has the meaning specified in the recital of parties to this Agreement;
“Mandatory Cost” means, in relation to a Lender and for any relevant period, the percentage rate per annum calculated by the Administrative Agent in accordance with Schedule 5;
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, condition (financial or otherwise), performance, properties or prospects of PDSA and its Subsidiaries taken as a whole, (b) the ability of any Obligor to perform its obligations under the Transaction Documents or (c) the rights and remedies of the Administrative Agent or any Lender under any Finance Document;
“Meltem Construction Contract” means the fixed price, turn-key, date certain Contract for Construction and Sale of a Drillship (Hull No. 2057), dated March 16, 2012 by and between Pacific Drilling VII Limited, a corporation incorporated and existing under the laws of the British Virgin Islands, as buyer and the Builder, for the construction of one (1) dynamically positioned deepwater drillship;
“Minimum Equity Threshold” has the meaning set forth in Section 4.8;
“Moody’s” means Xxxxx’x Investor Services Inc. and includes its successors;
“Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which any Obligor or any of its ERISA Affiliates (i) makes or is obliged to make contributions or (ii) during the preceding five years has made or has been obliged to make contributions;
“Negotiation Period” has the meaning given in Section 5.10;
“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender;
“Non-Qualified Partnership” means a, partnership or other entity in which PDSA or any Subsidiary of PDSA is a general partner or has general liability for the Indebtedness of such entity, other than any Subsidiary of PDSA;
“Non-Qualified Partnership Liability” of a Person at any time means, with respect to a Non-Qualified Partnership in which such Person has an interest, an amount equal to the amount by which (a) the aggregate amount of the total Indebtedness of such Non-Qualified Partnership at such time minus (without duplication) (i) the aggregate amount of such Indebtedness that are expressly agreed by the holders of such Indebtedness to be non-recourse to such Non-Qualified Partnership (the “Partnership Non-Recourse Liabilities”) and (ii) the aggregate amount of such Indebtedness that are expressly agreed by the holders of such Indebtedness to be non-recourse to such Person (the “Partner Non-Recourse Liabilities”) exceeds (b) 85% of the aggregate amount of the total tangible assets of such Non-Qualified Partnership at such time minus (without duplication) (x) the aggregate amount of the Partnership Non-Recourse Liabilities at such time and (y) the aggregate amount of the Partner Non-Recourse Liabilities at such time, as determined in accordance with GAAP;
“Notifying Lender” has the meaning given in Section 24.1 or Section 25.1 as the context requires;
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“Obligations” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 20.1(f). Without limiting the generality of the foregoing, the Obligations of any Obligor under the Finance Documents include (a) the obligation to pay principal, interest (including interest accruing on or after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding, relating to the Obligor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), charges, breakage, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Obligor under any Finance Document and (b) the obligation of such Obligor to reimburse any amount in respect of any of the foregoing that any Finance Party, in its sole discretion, may elect to pay or advance on behalf of such Obligor;
“Obligor” means any of, and “Obligors” means collectively all of, each of the Borrowers and the Guarantor;
“Other Permitted Security Interests” means:
(a) liens to secure the performance of statutory obligations, surety, customs, importation or appeal bonds, performance bonds or other obligations of like nature incurred in the ordinary course of business (including liens on cash or Cash Equivalents to secure obligations under letters of credit, bank guarantees and similar instruments issued in support of such obligations); and
(b) liens securing cash management obligations owing to a bank and rights of setoff in favor of a bank, imposed by law or granted in the ordinary course of business on deposit accounts maintained with such bank and cash and Cash Equivalents;
“Pacific Khamsin” means the dynamically positioned deepwater drillship having the Builder’s Hull No. 2014 which is being, or is to be, constructed by the Builder and is to be purchased by Pacific Drilling V Limited;
“Pacific Meltem” means the dynamically positioned deepwater drillship having the Builder’s Hull No. 2057 which is being, or is to be, constructed by the Builder under the Meltem Construction Contract and at the relevant Delivery Date pursuant to clause (i) of the definition thereof is to be purchased by Pacific Drilling VII Limited and registered in its name under Liberian flag or in another Approved Flag State;
“Pacific Sharav” means the dynamically positioned deepwater drillship having the Builder’s Hull No. 2015 which is being, or is to be, constructed by the Builder under the Sharav Construction Contract and at the relevant Delivery Date, currently scheduled to be November 30, 2013 pursuant to clause (i) of the definition thereof is to be purchased by Pacific Sharav S.ÀR.L. and registered in its name under Liberian flag or in another Approved Flag State;
“Parent Company” means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender;
“Party” means, for the purposes of Section 28, any party to a Finance Document;
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“Patriot Act” has the meaning set forth in Section 33.4;
“Payment Currency” has the meaning given in Section 22.4;
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions;
“PDGL” means Pacific Drilling (Gibraltar) Limited, a company organized and existing under the laws of Gibraltar;
“PDSA” has the meaning specified in the recital of the parties to this Agreement;
“PDSA Change of Control Event” means at any time during the Security Period, any Person, other than QPIL or any Affiliate thereof, obtains ownership or control, directly or indirectly, of 40% or more of the issued and outstanding Equity Interests of PDSA;
“Permitted Security Interests” means:
(a) Security Interests created by the Finance Documents;
(b) any lien or Security interest (existing by law or contract) granted to, or in favor of, any charterer or counterparty pursuant to the terms of any charter or drilling contract, in respect of obligations which are not more than thirty (30) days overdue or which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided in accordance with GAAP), so long as any such proceedings or the continued existence of the lien does not involve a reasonable likelihood of the detention, arrest, sale, forfeiture or loss of, or of any interest in, the Collateral Vessel;
(c) any lien for Taxes, mechanics and ship repairers liens or any other lien arising in the ordinary course of trading a Collateral Vessel (including purchase money liens and retention of title arrangements in favor of suppliers) by statute or by operation of law, in each case, in respect of obligations which are not more than thirty (30) days overdue or which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided in accordance with GAAP), so long as any such proceedings or the continued existence of the lien does not involve a reasonable likelihood of the detention, arrest, sale, forfeiture or loss of, or of any interest in, the Collateral Vessel;
(d) any lien or Security Interest arising out of any claims, judgments or awards against a Borrower which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided in accordance with GAAP)), so long as any such proceedings or the continued existence of the lien does not involve a reasonable likelihood of the detention, arrest, sale, forfeiture or loss of, or of any interest in, the Collateral Vessel; and
(e) any lien on a Collateral Vessel for master’s, officer’s or crew’s wages which are not more than thirty (30) days overdue or which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided in accordance with GAAP), so long as any such proceedings or the continued existence of the lien does not involve a reasonable likelihood of the detention, arrest, sale, forfeiture or loss of, or of any interest in, the Collateral Vessel;
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“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity of whatever nature, or a Government Entity;
“Pertinent Document” means:
(a) any Transaction Document;
(b) any policy or contract of insurance contemplated by or referred to in Section 14 or any other provision of this Agreement or another Finance Document;
(c) any other document contemplated by or referred to in any Finance Document; and
(d) any document which has been or is at any time sent by or to the Administrative Agent or the Security Agent in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
“PFA” means the Project Facilities Agreement, dated 9 September 2010, among (i) Pacific Drilling Ltd., (ii) Pacific Bora Ltd., (iii) Pacific Mistral Ltd. (iv) Pacific Scirocco Ltd. and (v) Pacific Santa Xxx SARL (each a “PFA Borrower”), DNB, Citibank and certain commercial banks and export credit agencies and the other parties therein named (as amended by a First Amendment Agreement, dated 16 November 2010, a First Amendment and Restatement Agreement, dated 30 March 2011, a Second Amendment and Restatement Agreement, dated 30 March 2012 and a Third Amendment and Restatement Agreement, dated 19 April 2012, and as the same may be from time to time amended, supplemented, restated or otherwise modified;
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Obligor or any of its ERISA Affiliates is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA;
“Pledgor” means PDGL;
“Project Costs” means:
(a) all payments made to the Builder in respect of the Contract Price;
(b) all other amounts payable under the Eligible Contracts; and
(c) all expenses incurred in connection with the supervision of construction of the Collateral Vessels and the procurement and delivery of any owner-furnished equipment and supplies required for the Collateral Vessels;
The estimated aggregate amount of all Project Costs is as set forth in the itemized list of costs per Collateral Vessel attached as Schedule 8 hereto;
“QPIL” means Quantum Pacific International Limited, a British Virgin Islands corporation;
“Quotation Date” means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;
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“Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request by the Reference Banks, in relation to LIBOR, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period;
“Reference Banks” means, subject to Section 29.16, Citibank N.A. and DNB Bank ASA;
“Refund Guarantee” means each refund guarantee relating to a Construction Contract issued by the relevant Refund Guarantor in favor of the applicable Borrower party to such Construction Contract respecting certain obligations of the Builder under such Construction Contract, each in form and content satisfactory to the Lenders;
“Refund Guarantor” means Zurich American Insurance Company or The Export-Import Bank of Korea, as applicable;
“Reimbursement Payments” means payments made by a Borrower to any member of the Group to reimburse such Group member for any amount in respect of Project Costs paid or incurred by such Group member;
“Re-insurances” means:
(a) all policies and contracts of re-insurance, including entries of the Collateral Vessels in any protection and indemnity or war risks association, which are effected by or for the benefit of (amongst others) the Borrowers in respect of the Collateral Vessels, the Earnings or otherwise in relation to the Collateral Vessels; and
(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
“Repayment Date” means a date on which a repayment of the Loan is required to be made under Section 8.1 and/or Section 8.2;
“Repeating Representations and Warranties” means the representations and warranties of the Obligors in Section 11, but excluding Section 11.3 (Share Capital and Ownership), 11.11 (Information) and 11.15 (Completeness of Transaction Document);
“Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30-day notice period has been waived, with respect to a Plan;
“Requisition Compensation” means all sums of money or other compensation from time to time payable in respect of the Compulsory Acquisition of any Collateral Vessel;
“Responsible Officer” means, as to an Obligor, its chief executive officer, president, general counsel, any senior vice president or any corporate vice president, or, with respect to financial matters required to be certified in relation to Section 12.4 and 13.8 of this Agreement, the chief financial officer of PDSA, the treasurer of PDSA or the chief accounting officer of PDSA;
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“Satisfactory Drilling Contract” means, to the extent so irrevocably designated in writing by the Obligors, one or more drilling contracts, charters or other similar contracts permitted by the provisions of this Agreement or any other contracts in full force and effect (each a “Contract”) for the employment of the Collateral Vessels, entered into between a Borrower or an Internal Charterer and an oil major or national oil company that fulfill one of the following two requirements:
(a) both (i) the aggregate duration under such Contracts covering both Collateral Vessels is for a minimum period of five (5) years (either at the time of inception or at any later time following the exercise of an extension option or options which results in the Contracts having an overall period of five (5) years or more (regardless of when each such Contract has commenced)) and (ii) the average rate payable under such Contracts covering both Collateral Vessels is at least $500,000 per day; or
(b) such Contracts are otherwise acceptable to all of the Lenders;
provided that the performance of such Contracts shall not be proscribed under applicable law, and further provided that Contracts which at the time of inception have an aggregate minimum period of less than five (5) years shall only be treated as Satisfactory Drilling Contracts as from the date on which an extension option is exercised which results in the relevant Contract(s) having an overall period of five (5) years or more;
“Screen Rate” means in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the appropriate rate after consultation with the Borrowers and the Lenders;
“Secured Liabilities” means all liabilities which the Obligors have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
“Security Agent” means DNB Bank ASA, New York Branch, acting in such capacity through its office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, or any successor of it appointed under Section 28;
“Security Documents” means:
(a) the Assignments of Accounts;
(b) the Account Control Agreements;
(c) the Assignments of Earnings;
(d) the Assignments of Insurances;
(e) the Assignments of Internal Charter;
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(f) the Assignments of Re-insurances;
(g) the Assignments of Construction Contracts;
(h) the Assignments of Refund Guarantees;
(i) the Ship Mortgages;
(j) the Assignments of Management Agreement;
(k) the Share Pledge Agreements;
(l) any assignments of any Hedging Agreements; and
(m) any other document (whether creating a Security Interest or not) which is executed at any time by an Obligor or any other Person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Finance Parties or any of them under this Agreement or any of the other documents referred to in this definition;
“Security Interest” means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
(b) the security rights of a plaintiff under an action in rem in which a Collateral Vessel has been arrested or a writ has been issued or similar step taken; and
(c) any arrangement entered into by a Person (A) the effect of which is to place another Person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
“Security Period” means the period commencing on the date of this Agreement and ending on the date on which the Administrative Agent notifies the Obligors and the Lenders that:
(a) all amounts which have become due for payment by the Obligors under the Finance Documents have been finally paid and all Obligations of Obligors have been fully performed; and
(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document (including under Section 21 hereof);
“Sharav Construction Contract” means the fixed price, turn-key, date certain Contract for Construction and Sale of a Drillship (Hull No. 2015), dated March 15, 2012 by and between Pacific Sharav S.ÀR.L., a Luxembourg company (as successor in interest to Pacific Drilling VI Limited, a corporation incorporated and existing under the laws of the British Virgin Islands), as buyer and the Builder, for the construction of one (1) dynamically positioned deepwater drillship;
“Share Pledge Agreement” means collectively, the British Virgin Islands Share Pledge Agreement and the Luxembourg Share Pledge Agreement;
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“Ship Mortgage” means, with respect to each Collateral Vessel, a first preferred ship mortgage under the laws and flag of the Republic of Liberia or other Approved Flag State, if applicable, in favor of the Security Agent as security trustee and mortgagee on behalf of the Lenders, in substantially the form of Exhibit E hereto;
“Signing Date” means the day the parties have executed and delivered this Agreement;
“Solvent” means, with respect to any Person on a particular date, that on such date (a) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature and (c) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would be unreasonably small in relation to such business or such transaction;
“Standard & Poors” means Standard & Poors Rating Services, a division of The XxXxxx-Xxxx Companies Inc. and includes its successors;
“Structuring Bank” has the meaning specified in the recital of parties to this Agreement;
“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or other entity of which (or in which) more than 50% of (a) the issued and outstanding Equity Interests or other ownership interests having ordinary voting power to elect a majority of the board of directors or a majority of other equivalent managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person (irrespective of whether at the time Equity Interests of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), or (b) the interest in the capital or profits of such limited liability company, partnership or joint venture, or (c) the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries;
“Taxes” means any and all fees (including license, recording, documentation and registration fees), taxes (including income, gross receipts, capital, franchise, net worth, gross profits, sales, turnover, value added, goods and services, ad valorem, property (tangible and intangible), excise, documentary and stamp taxes), licenses, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever (whether now existing or hereafter imposed, and howsoever imposed or named), imposed, levied or asserted by any Taxing Authority and any and all penalties, fines, interest and other charges relating thereto;
“Taxing Authority” means any Government Entity, quasi-governmental authority, or international authority having or asserting power to impose, administer or collect any Tax, whether or not such authority has such power;
“Total Loss” means:
(a) the actual or constructive or compromised or arranged total loss of the Collateral Vessel;
(b) the Compulsory Acquisition of the Collateral Vessel; and
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(c) the hijacking, theft, condemnation, forfeiture, capture, seizure, arrest, detention or confiscation of a Collateral Vessel (other than where the same amounts to the Compulsory Acquisition of the Collateral Vessel) by any Government Entity, or by Persons acting or purporting to act on behalf of any Government Entity, unless such Collateral Vessel is released and restored to the relevant Borrower, or operator from such hijacking, theft, forfeiture, condemnation, capture, seizure, arrest, detention or confiscation within six (6) months after the occurrence thereof;
“Total Loss Date” means:
(a) in the case of an actual total loss of the Collateral Vessel, at noon (London time) on the actual date a Collateral Vessel was lost or, if such date is not known, on the day on which such Collateral Vessel was last reported;
(b) in the case of a constructive total loss of a Collateral Vessel, upon the date and at the time notice of abandonment of the Collateral Vessel is given to the insurers of the Collateral Vessel for the time being (provided a claim for such constructive total loss is admitted by the insurers) or, if the insurers do not admit such a claim, at the date and at the time at which a constructive total loss is subsequently adjudged by a competent court of law to have occurred;
(c) in the case of a compromised or arranged total loss, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of the Collateral Vessel;
(d) in the case of Compulsory Acquisition, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and
(e) in the case of hijacking, theft, condemnation, forfeiture, confiscation, capture, detention or seizure of the Collateral Vessel (other than where the same amounts to Compulsory Acquisition of the Collateral Vessel) by any Government Entity, or by Persons purporting to act on behalf of any Government Entity, the expiry of the period of six (6) months after the date upon which the relevant hijacking, theft, condemnation, forfeiture, confiscation, capture, detention or seizure occurred;
“Transaction Documents” means:
(a) this Agreement and the other Finance Documents;
(b) the Construction Contracts;
(c) the GIEK Guarantees; and
(d) the Refund Guarantees.
“Transfer Certificate” has the meaning given in Section 29.2;
“Transferee Lender” has the meaning given in Section 29.2;
“Transferor Lender” has the meaning given in Section 29.2;
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“Undisclosed Administration” means in relation to a Lender subject to the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation), the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed;
“VAT” means any Tax that is, or is in the nature of, a value added, services, goods and services, consumption, or transaction Tax;
“Vessel Market Value” means the market value of each Collateral Vessel determined in accordance with Section 16.4; and
“Voting Stock” of any Person means Capital Stock of such Person which ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.
1.2 Construction of certain terms. In this Agreement:
“administration notice” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a Person prior to, or in connection with, the appointment of an administrator;
“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
“consent” includes an authorization, consent, approval, resolution, license, exemption, filing, registration, notarization and legalization;
“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;
“continuing”, in relation to any Event of Default or Default, means that the Event of Default or Default has not been remedied or waived;
“document” includes a deed; also a letter, fax or telex;
“excess risks” means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Collateral Vessel in consequence of its insured value being less than the value at which the Collateral Vessel is assessed for the purpose of such claims;
“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses);
“IGA” means the International Group of Protection and Indemnity Associations and includes any successor association or replacement body of such associations;
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“law” includes any order or decree or any form of delegated legislation having the force of law;
“legal or administrative action” means any legal proceedings or arbitration and any-administrative or regulatory action;
“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
“months” shall be construed in accordance with Section 1.3;
“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
“protection and indemnity risks” means:
(a) the usual risks covered by a protection and indemnity association which is a member of the IGA including pollution risks and the proportion (if any) of any sums payable to any other Person or Persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of Section 1 of the Institute Time Sections (Hulls)(1/10/83) or Section 8 of the Institute Time Sections (Hulls) (1/11/1995) or the Institute Amended Running Down Section (1/10/71) or any equivalent provision; or
(b) if those risks are placed on Norwegian terms, protection, and indemnity risks as defined in the Norwegian Marine Insurance Plan of 1996 (as amended);
“regulation” includes any regulation, rule, official directive or legally applicable request or guideline of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organization;
“war risks” includes the risk of mines and all risks excluded by Section 23 of the Institute Time Sections (Hulls)(1/10/83) or Section 24 of the Institute Time Sections (Hulls)(1/11/1995) or if those risks are placed on Norwegian terms, means war risks as defined in the Norwegian Marine Insurance Plan of 1996 (as amended).
1.3 Meaning of “month”. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:
(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;
and “month” and “monthly” shall be construed accordingly.
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1.4 General Interpretation. In this Agreement:
(a) references to, or to a provision of, a Finance Document, any other Transaction Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
(b) references to, or to a provision of, any law include any amendment, extension, reenactment or replacement, whether made before the date of this Agreement or otherwise;
(c) words denoting the singular number shall include the plural and vice versa;
(d) “including” in its various forms means “including without limitation”; and
(e) Sections 1.1 to 1.4 apply unless the contrary intention appears.
1.5 Headings. In interpreting a Finance Document or any provision of a Finance Document, all Section, sub-clauses and other headings in that and any other Finance Document shall be entirely disregarded.
1.6 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles from time to time in effect in the United States, consistently applied (“GAAP”); provided, however, that if the Borrowers notify the Administrative Agent that the Borrowers wish to amend any covenant or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if the Administrative Agent notifies the Borrowers that the Majority Lenders wish to amend the covenants or any related definition for such purpose), then the Borrowers’ compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrowers and the Majority Lenders.
1.7 Luxembourg Terms. In this Agreement, where it relates to a Luxembourg Obligor, a reference to:
(a) a “liquidator”, “receiver”, “administrator receiver”, “administrator”, “compulsory or interim manager”, or similar officer includes any commissaire, juge-commissaire, liquidateur, curateur, juge délégué or similar officer pursuant to any insolvency or similar proceedings;
(b) a “winding-up”, “administration”, “bankruptcy” or “dissolution” includes, without limitation, bankruptcy (faillite), liquidation, composition with creditors (concordat préventif de faillite), reprieve from payment (sursis de paiement), controlled management (gestion contrôlée) and judicial winding-up or liquidation; and
(c) a person being unable to pay its debts includes that person being in a state of cessation of payments (cessation de paiements).
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2 | FACILITY |
2.1 Amount of facilities. The GIEK Facility Lender and the Commercial Facility Lenders severally agree, on the terms and conditions hereinafter set forth, that loan facilities shall be provided to the Borrowers as follows:
(a) by the GIEK Facility Lender, a term loan facility of up to $500,000,000 conditional upon the issue of the GIEK Guarantees; and
(b) by the Commercial Facility Lenders, a term loan facility of up to $500,000,000.
Amounts advanced under this Agreement shall not, however, exceed the Minimum Equity Threshold as defined in Section 4.8.
2.2 Commercial Facility Lenders’ participations in Commercial Facility Advances. Subject to the other provisions of this Agreement, each Commercial Facility Lender shall participate in each Commercial Facility Advance in the proportion which its Commercial Facility Loan Commitment bears to the Total Commercial Facility Loan Commitments.
2.3 Borrowers’ Termination of Undrawn Commitments. The Borrowers shall have the right, upon at least ten (10) Business Days’ irrevocable prior written notice to the Administrative Agent, to cancel or terminate, in whole or reduce ratably, in part, any undrawn Commitment, provided that each partial reduction of an undrawn Commitment (i) shall be in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) shall be made on a pro-rata basis across each of the GIEK Facility Loan and the Commercial Facility Loan. Each such termination or reduction of an undrawn Commitment shall be permanent and cancelled amounts cannot be reinstated.
2.4 Purpose and Use of Advances. The proceeds of the Advances shall be used only to provide pre-delivery and post-delivery financing to the Borrowers for the Collateral Vessels (including the payment of Project Costs and the making of Reimbursement Payments). The Borrowers undertake with each Finance Party to use the Advances only for the purposes stated in this Section 2.4 unless otherwise agreed by all the Lenders.
3 | POSITION OF THE LENDERS |
3.1 Interests of Lenders several. The rights of the Lenders under this Agreement are several.
3.2 Individual Lender’s right of action. Each Lender shall be entitled to xxx for any amount which has become due and payable by the Borrowers to it under this Agreement without joining the Administrative Agent, the Security Agent or any other Lender as additional parties in the proceedings.
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3.3 Proceedings by individual Lender requiring Majority Lender consent. However, except as provided in Section 3.2, no Lender may commence proceedings against any Obligor in connection with a Finance Document without the prior consent of the Majority Lenders. For the avoidance of doubt, this Section 3.3 applies to any proceedings against any Obligor to enforce any Security Interest created in favor of the Security Agent by any Finance Document.
3.4 Obligations of Lenders several. The obligations of the Lenders under this Agreement are several and a failure of a Lender to perform its obligations under this Agreement shall not result in:
(a) the obligations of the other Lenders being increased; nor
(b) any Obligor or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
4 | DRAWDOWN |
4.1 Request for Advance. Subject to the following conditions of this Section 4, the Borrowers may request that an Advance be made by ensuring that the Administrative Agent receives a completed Drawdown Notice not later than 11.00 a.m. (New York time) five (5) Business Days prior to the intended Drawdown Date (or such shorter period as all the Lenders may agree).
4.2 Availability. Subject to Section 4.8, the conditions referred to in Section 4.1 are that:
(a) a Drawdown Date has to be a Business Day during the Availability Period;
(b) there shall be not more than ten (10) GIEK Facility Advances and the aggregate of the GIEK Facility Advances shall not exceed the GIEK Facility Loan Commitment; the Borrowers shall designate in each Drawdown Notice the Collateral Vessel to which such GIEK Facility Advance relates and each such Advance shall be designated a “GIEK Facility Meltem Advance” or a “GIEK Facility Sharav Advance”, as the case may be;
(c) there shall be not more than ten (10) Commercial Facility Advances and the aggregate of the Commercial Facility Advances shall not exceed the Total Commercial Facility Loan Commitments; the Borrowers shall designate in each Drawdown Notice the Collateral Vessel to which such Commercial Facility Advance relates and each such Advance shall be designated a “Commercial Facility Meltem Advance” or a “Commercial Facility Sharav Advance”, as the case may be;
(d) the aggregate of the Advances shall not exceed the lower of $1,000,000,000 and 72% of the Project Costs; and
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(e) Advances should be requested so that the proceeds of the facilities made available under this Agreement are utilized by the Borrowers to pay Project Costs then due or to become due in the thirty (30) day period succeeding the Drawdown Date and/or to make Reimbursements Payments.
4.3 Notification to the GIEK Facility Lender of receipt of Drawdown Notice. The Administrative Agent shall promptly notify the GIEK Facility Lender that it has received a Drawdown Notice and shall inform the GIEK Facility Lender of:
(a) the aggregate amount of the Advances requested and the Drawdown Date;
(b) the amount of the GIEK Facility Advance requested;
(c) the Collateral Vessel to which the GIEK Facility Advance requested shall relate; and
(d) the duration of the first Interest Period applicable to the GIEK Facility Advance requested and the applicable method by which interest is to accrue thereon under Section 5.2(a).
4.4 Notification to the Commercial Facility Lenders of receipt of Drawdown Notice. The Administrative Agent shall promptly notify each Commercial Facility Lender that it has received a Drawdown Notice and shall inform each Commercial Facility Lender of:
(a) the aggregate amount of the Advances requested and the Drawdown Date;
(b) the amount of the Commercial Facility Advance requested;
(c) the amount of such Commercial Facility Lender’s participation in the Commercial Facility Advance requested;
(d) the Collateral Vessel to which the Commercial Facility Advance requested shall relate; and
(e) the duration of the first Interest Period applicable to the Commercial Facility Advance requested.
4.5 Drawdown Notice irrevocable. A Drawdown Notice must be signed by a duly authorized Person on behalf of each Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Administrative Agent, acting with the authorization of the Majority Lenders.
4.6 Lenders’ funding. Subject to the provisions of this Agreement, including, the provisions of Section 10:
(a) on and with value on each Drawdown Date, the GIEK Facility Lender shall make available to the Administrative Agent for the account of the Borrowers the amount of the GIEK Facility Advance due from the GIEK Facility Lender on that Drawdown Date; and
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(b) on and with value on each Drawdown Date, each Commercial Facility Lender shall make available to the Administrative Agent for the account of the Borrowers the amount due from that Commercial Facility Lender on that Drawdown Date under Section 2.2.
4.7 Disbursement of Advances. Subject to the provisions of this Agreement, the Administrative Agent shall on the Drawdown Date pay to the Borrowers, or their order, the amounts which the Administrative Agent receives from the Lenders under Section 4.6 and that payment to the Borrowers, or their order, shall be made in the like funds as the Administrative Agent received the payments from the Lenders.
4.8 Availability. Notwithstanding anything to the contrary in the Finance Documents, the GIEK Facility Loan Commitment and the Commercial Facility Loan Commitment, with respect to each Collateral Vessel, shall be available pro-rata based on the “Minimum Equity Threshold” which shall mean 65/35 debt/equity, which shall adjust to 72/28 debt/equity upon the occurrence of all, but not less than all, of the following: (i) the delivery of the Pacific Sharav, (ii) the aggregate duration across the Satisfactory Drilling Contract(s) being at least 6 years (as measured by the original terms of such Satisfactory Drilling Contract(s)) and (iii) the aggregate principal amount outstanding under the PFA and this Agreement shall not exceed 65% of the aggregate Fair Market Value (as defined in Section13.8(h)) of the vessels that are collateral for the PFA and the Collateral Vessels. The Fair Market Value of the vessels that are collateral for the PFA and the Collateral Vessels shall be determined, at the applicable Borrower’s cost, in connection with each drawdown, not later than the date of the relevant Drawdown Notice; provided that appraisals delivered within the seven (7) months prior to such date shall be acceptable for this purpose. For the avoidance of doubt, the consolidated debt/equity threshold across the Pacific Sharav and the Pacific Meltem will remain at 65/35 debt/equity until such a time that the conditions set forth in sub-clauses (i), (ii) and (iii) of this definition are met.
The GIEK Facility Loan and the Commercial Facility Loan shall be available in not more than ten (10) Advances from the relevant Section 10.2 conditions precedent satisfaction date, for the purposes provided in Section 2.4 and in accordance with Section 4.2 until the relevant Delivery Date (such period, the “Availability Period”). All Advances shall be made ratably in proportion to each Lender’s commitment with respect to the relevant Loan.
5 | INTEREST |
5.1 Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan shall be paid by the Borrowers on the unpaid principal amount of each Advance owing to each Lender from the date the relevant Advance is made until such principal amount shall be paid in full, on the terms set out below.
5.2 Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest shall be:
(a) on the GIEK Facility Loan, as selected by the Borrower in its Drawdown Notice to the Administrative Agent, either:
(i) the CIRR Rate applicable to the relevant Collateral Vessel; or
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(ii) the aggregate of the GIEK Facility Loan Margin and LIBOR for the applicable Interest Period; and
(b) on the Commercial Facility Loan, the aggregate of the Commercial Facility Loan Margin, the Mandatory Costs, if applicable, and LIBOR for the applicable Interest Period.
5.3 Election of Rate of Interest on the GIEK Facility Loan; Fixing of Margin; Payment of accrued interest.
(a) Election of Rate of Interest on the GIEK Facility Loan.
(i) A Borrower shall notify the Administrative Agent prior to the Delivery Date of the relevant Collateral Vessel if such Borrower wants to apply the CIRR Rate on an Advance made available under the GIEK Facility Loan relating to such Collateral Vessel.
(ii) If the Borrower fails to select the CIRR Rate for an Advance prior to the Delivery Date of a Collateral Vessel, the Borrower may not later select the CIRR Rate for such Advance.
(iii) If a Borrower has selected the CIRR Rate for an Advance, such selection shall be binding on that Borrower throughout the term of such Advance and may not subsequently be replaced by the relevant LIBOR and GIEK Facility Loan Margin.
(b) Fixing of Margin.
(i) The GIEK Facility Loan Margin shall be fixed for a period of sixty (60) months from the first Drawdown Date (the “Fixed Margin Period”).
(ii) The Borrowers may from the date falling sixty (60) Business Days prior to the interest payment date falling nearest to the expiry of the Fixed Margin Period (the “Margin Review Date”), but no later than forty (40) Business Days prior to the Margin Review Date, request that the GIEK Facility Lender gives an offer to the Borrowers for a fixed margin (the “New Fixed Margin Offer”) for an additional period to be agreed between the GIEK Facility Lender and the Borrowers and so on (the “New Fixed Margin Period”). The GIEK Facility Lender shall, within ten (10) Business Days of receipt of such request give a New Fixed Margin Offer to the Borrowers. No later than ten (10) Business Days of receipt of the New Fixed Margin Offer, the Borrowers may accept or reject the New Fixed Margin Offer. If the Borrowers do not request the GIEK Facility Lender to give a New Fixed Margin Offer or do not accept the New Fixed Margin Offer in accordance with the conditions of this Section 5.3(b), the GIEK Facility Lender’s Commitment shall terminate and any amount outstanding under the GIEK Facility Loan together with the GIEK Facility Lender’s proportionate part of all outstanding indebtedness shall be due and payable by the Borrowers on the last day of the relevant Fixed Margin Period.
(c) Payment of accrued interest. Interest on the Loan shall be paid on the last day of each Interest Period and, if such Interest Period has a duration of more than three (3) months, on each date that occurs during such Interest Period every three (3) months from the first day of such Interest Period and on the day the principal amount of the Loan shall be paid in full.
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5.4 Notification of rates of normal interest. The Administrative Agent shall notify the Borrowers, the GIEK Facility Lender and each Commercial Facility Lender of the applicable rates of interest for each Interest Period as soon as reasonably practicable after they are determined.
5.5 Obligation of Reference Banks to quote. In circumstances where a quotation is required, a Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.
5.6 Absence of quotations by Reference Banks. If, in such circumstances, any Reference Bank fails to supply a quotation, the Administrative Agent shall determine the relevant LIBOR for the Interest Period concerned on the basis of the quotations supplied by the other Reference Banks; but if two (2) or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Section 5.
5.7 Market disruption. The following provisions (Section 5.8 through Section 5.15) of this Section 5 apply if:
(a) at or about noon (London time ) on the Quotation Date for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Administrative Agent to determine LIBOR for the relevant currency and Interest Period; or
(b) on the Quotation Date for an Interest Period, Commercial Facility Lenders having Commercial Facility Loan Contributions together amounting to at least fifty percent (50%) of the Commercial Facility Loan (or, if no Commercial Facility Advance has been made, Commercial Facility Loan Commitments amounting to at least fifty percent (50%) of the Total Commercial Facility Loan Commitments) notify the Administrative Agent that LIBOR fixed by the Administrative Agent would not accurately reflect the cost to those Commercial Facility Lenders of funding their respective Commercial Facility Loan Contributions (or any part of them) during the Interest Period from whatever source such Commercial Facility Lenders might reasonably select; or
(c) with respect to such period that Section 5.2(a)(ii) is applicable, on the Quotation Date for an Interest Period, the GIEK Facility Lender notifies the Administrative Agent that LIBOR fixed by the Administrative Agent would not accurately reflect the cost to the GIEK Facility Lender of funding its GIEK Facility Loan Contributions (or any part of them) during the Interest Period in the London Interbank Market; or
(d) on or before the Quotation Date for an Interest Period, the Administrative Agent is notified by any Commercial Facility Lender that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Commercial Facility Loan Contribution (or any part of it) during the Interest Period; or
(e) with respect to such period that Section 5.2(a)(ii) is applicable, on or before the Quotation Date for an Interest Period, the Administrative Agent is notified by the GIEK Facility Lender that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its GIEK Facility Loan Contribution (or any part of it) during the Interest Period.
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5.8 Notification of market disruption. The Administrative Agent shall promptly notify the Borrowers, each of the Commercial Facility Lenders and, with respect to such period that Section 5.2(a)(ii) is applicable, the GIEK Facility Lender, stating the circumstances falling within Section 5.7 which have caused its notice to be given.
5.9 Suspension of drawdown. If the Administrative Agent’s notice under Section 5.8 is served before an Advance is to be made:
(a) in a case falling within Sections 5.7(a), 5.7(b) or 5.7(c), the relevant Lenders’ obligations to make the relevant Advance;
(b) in a case falling within Section 5.7(d) or 5.7(e), the Affected Lender’s obligation to participate in the relevant Advance;
shall be suspended while the circumstances referred to in the Administrative Agent’s notice continue.
5.10 Negotiation of alternative rate of interest. If the Administrative Agent’s notice under Section 5.8 is served while any part of the Loan is outstanding, the Borrowers, and the Administrative Agent shall use reasonable endeavors to agree, within the thirty (30) days after the date on which the Administrative Agent serves its notice under Section 5.8 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an alternative basis for the affected Lender to fund or continue to fund their or its Commercial Facility Loan Contribution or, with respect to such period that Section 5.2(a)(ii) is applicable, its GIEK Facility Loan Contribution, during the Interest Period concerned.
5.11 Application of agreed alternative rate of interest. Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed and shall, with the prior consent of the Borrowers and (i) with respect to Sections 5.7(a) or (b), all the Commercial Facility Lenders; (ii) with respect to Section 5.7(c), the GIEK Facility Lender and (iii) with respect to Section 5.7(d) or (e), the Affected Lender, be binding on all parties.
5.12 Alternative rate of interest in absence of agreement. If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Administrative Agent shall, with the agreement of (i) with respect to Sections 5.7(b) and (d), the affected Commercial Facility Lenders, set an interest period and interest rate representing the cost of funding of the affected Commercial Facility Lenders from whatever source such Commercial Facility Lenders might reasonably select in Dollars or in any available currency of their or its Commercial Facility Loan Contribution plus the Commercial Facility Loan Margin and Mandatory Costs, (ii) with respect to Sections 5.7(c) and (e), the GIEK Facility Lender, set an interest period and interest rate representing the cost of funding of the GIEK Facility Lender from whatever source it might reasonably select in Dollars plus the GIEK Facility Loan Margin, and (iii) with respect to Section 5.7(a), the affected Lenders, set an interest period and
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interest rate representing the cost of funding of the affected Lenders from whatever source such Lenders might reasonably select in Dollars or in any available currency of their or its Commercial Facility Loan Contribution plus the Commercial Facility Loan Margin and Mandatory Costs, or, with respect to the GIEK Facility Lender during such period that Section 5.2(a)(ii) is applicable, its GIEK Facility Loan Contribution plus the GIEK Facility Loan Margin the procedure provided for by this Section 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Administrative Agent.
5.13 Notice of prepayment. If the Borrowers do not agree with an interest rate set by the Administrative Agent under Section 5.10, the Borrowers may give the Administrative Agent not less than thirty (30) day’s notice of their intention to prepay, as applicable, the Commercial Facility Loan Contribution or, with respect to such period that Section 5.2(a)(ii) is applicable, the GIEK Facility Loan Contribution, as the case may be, of the affected Lender at the end of the interest period set by the Administrative Agent.
5.14 Prepayment; termination of Commitments. A notice under Section 5.13 shall be irrevocable; the Administrative Agent shall promptly notify the affected Lender of the Borrower’s notice of intended prepayment; and:
(a) on the date on which the Administrative Agent serves that notice, the Commercial Facility Loan Commitment or the GIEK Facility Loan Commitment, as the case may be, of the affected Lender shall be cancelled; and
(b) on the last Business Day of the interest period set by the Administrative Agent, the Borrowers shall prepay (without premium or penalty) the affected Lender’s Commercial Facility Loan Contribution or GIEK Facility Loan Contribution, as the case may be, together with accrued interest thereon at the applicable rate.
5.15 Application of prepayment provisions. The provisions of Sections 8.14 and 8.17 shall apply in relation to any prepayment pursuant to Section 5.14.
6 | INTEREST PERIODS |
6.1 Commencement of Interest Periods. The first Interest Period applicable to the Loan shall commence on the first Drawdown Date and end on the last day of the period selected by the Borrowers in accordance with the provisions of Section 6.2 and each subsequent Interest Period shall commence on the expiry of the immediately preceding Interest Period.
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6.2 Duration of normal Interest Periods. The duration of each Interest Period shall be three (3) months or six (6) months, as the Borrowers may, upon notice received by the Administrative Agent not later than 11:00 A.M., (New York time) on the fifth (5th) Business Day prior to the first Drawdown Date, select, provided, however that:
(a) whenever the last day of an Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day;
(b) the first Interest Period for Advances made on the second and subsequent Drawdown Dates shall end on the last day of the then current Interest Period for Advances made on the first Drawdown Date;
(c) an Interest Period shall end on the Delivery Date;
(d) after the Delivery Date, the end of each Interest Period (or, in the case of three (3) month Interest Periods, every other Interest Period) shall coincide with a Repayment Date; and
(e) if an Interest Period would otherwise overrun the Final Repayment Date, such Interest Period shall end on the Final Repayment Date.
6.3 Repeating Representations. The Repeating Representations and Warranties (other than the representations contained in Sections 11.9 and 11.12(b)) are deemed to have been made by each Obligor on the first day of each Interest Period.
7 | DEFAULT INTEREST |
7.1 Payment of default interest. The Borrowers shall pay interest in accordance with the following provisions of this Section 7 on any amount payable by the Borrowers under any Finance Document which the Administrative Agent, the Security Agent or any other designated payee does not receive on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such amount is due for payment after giving effect to all applicable grace periods; or
(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served after giving effect to all applicable grace periods; or
(c) if such amount has become immediately due and payable under Section 20.4, the date on which it became immediately due and payable.
7.2 Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Administrative Agent to be 2.00% above:
(a) in the case of any overdue amount of principal due to the GIEK Facility Lender in respect of a GIEK Facility Advance which bears interest at a floating rate or due to any Commercial Facility Lender in respect of a Commercial Facility Advance, the higher of the rates set out at Sections 7.3(a) and 7.3(c);
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(b) in the case of any other overdue amount due to the GIEK Facility Lender, the higher of the rates set out at Sections 7.3(b) and 7.3(c); or
(c) in the case of any other overdue amount, the rate set out at Section 7.3(c).
7.3 Calculation of default rate of interest. The rates referred to in Section 7.2 are:
(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
(b) the relevant CIRR Rate;
(c) the aggregate of (in the case of amounts due to the GIEK Facility Lender) the GIEK Facility Loan Margin and the Mandatory Costs or (in the case of amounts due to the Commercial Facility Lenders) the Commercial Facility Loan Margin and the Mandatory Costs plus (in each case) in respect of successive periods of any duration (including at call) up to three (3) months which the Administrative Agent may select from time to time:
(i) LIBOR; or
(ii) if the Administrative Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Administrative Agent by reference to the cost of funds to the Reference Banks from such other sources as the Administrative Agent (after consultation with the Reference Banks) may from time to time reasonably determine.
7.4 Notification of interest periods and default rates. The Administrative Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Administrative Agent under Section 7.3 and of each period selected by the Administrative Agent for the purposes of paragraph (b) of that Section; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Administrative Agent’s notification.
7.5 Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Section 7 shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Administrative Agent for the account of the Finance Party to which the overdue amount is due.
7.6 Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
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8 | REPAYMENT, PREPAYMENT AND CANCELLATION |
8.1 Repayment installments in relation to the GIEK Facility Loan. In respect of each Collateral Vessel, the Borrowers shall repay the GIEK Facility Loan by twenty-four (24) consecutive equal semi-annual principal installments and:
(a) the first installment shall be repaid on the date falling six (6) months after the relevant Delivery Date;
(b) each subsequent installment shall be repaid on the date falling six (6) months after the date of repayment of the preceding installment;
(c) the last installment shall be repaid on the date falling one hundred and forty four (144) months after the relevant Delivery Date (the “GIEK Facility Loan Maturity Date”); and
(d) any repayment installment shall be applied to each GIEK Facility Advance pro rata.
8.2 Repayment of the Commercial Facility Loan. In respect of each Collateral Vessel, the Borrowers shall repay the Commercial Facility Loan in consecutive equal semi-annual principal installments equal to 1/24 of the principal amount of the Commercial Facility Loan applicable to such Collateral Vessel as of the Delivery Date for such Collateral Vessel and:
(a) the first installment shall be repaid on the date falling six (6) months after the relevant Delivery Date and, in any event, no later than May 31, 2015;
(b) each subsequent installment shall be repaid on the date falling six (6) months after the date of repayment of the preceding installment;
(c) the remaining outstanding principal amount of the Commercial Facility Loan shall be repaid on the date falling sixty (60) months after the Delivery Date of the second Collateral Vessel, and in any event, no later than May 31, 2019 (the “Commercial Credit Facility Loan Maturity Date”); and
(d) any repayment installment shall be applied to each Commercial Facility Advance pro rata.
8.3 Final Repayment Date. On the Final Repayment Date of the Loan the Borrowers shall pay to the Administrative Agent for the account of the Finance Parties any and all other sums then accrued or owing under any Finance Document.
8.4 Voluntary prepayment. Subject to the conditions of Section 8.5, the Borrowers may prepay the whole or any part of the Loan without penalty or premium (except as otherwise expressly provided in this Agreement).
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8.5 Conditions for voluntary prepayment. The conditions referred to in Section 8.4 are that:
(a) any partial prepayment of the Loan shall be applied pro rata to the GIEK Facility Loan and the Commercial Facility Loan, in each case, pro-rata across maturities;
(b) any partial prepayment shall be in a minimum amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof;
(c) the Administrative Agent has received from the Borrowers at least thirty (30) calendar days’ prior written notice specifying the amount to be prepaid, the date on which the prepayment is to be made and the Collateral Vessel to which such prepayment relates;
(d) no amounts prepaid may be reborrowed;
(e) any prepayment of a Loan made otherwise than on the last day of an Interest Period applicable to the amount prepaid shall be made together with such breakage costs as provided in Sections 8.13 and 8.14, as the case may be.
8.6 Effect of notice of voluntary prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Administrative Agent, given with the authorization of all the Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.
8.7 Notification of notice of prepayment. The Administrative Agent shall notify the Lenders promptly upon receiving a prepayment notice in accordance with Section 8.5(c).
8.8 Mandatory prepayment of Loan. The Borrowers shall be obliged:
(a) to prepay the whole of the Loan, if a Construction Contract is cancelled, on the earlier of the Business Day following payment by the relevant Refund Guarantor under the Refund Guarantee(s) and the date falling sixty (60) days after the date of cancellation, unless the Borrowers fail to pursue diligently their respective refund rights under the Refund Guarantee(s) or the relevant Refund Guarantee has ceased to be in full force and effect or any refund thereunder will not be sufficient to prepay the Loan in full, in which case the Loan shall be repaid on demand by the Administrative Agent; or
(b) to prepay the whole of the Loan, if a Collateral Vessel or a Construction Contract is sold, and the Borrowers will make such prepayment on or before the date on which the sale is completed; or
(c) to prepay the whole of the Loan, if a Collateral Vessel becomes a Total Loss after delivery, on the earlier of:
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(i) the date falling six (6) months after the Total Loss Date or such later date as may be agreed by the Administrative Agent on the directions of the Majority Lenders from time to time if they are reasonably satisfied that the relevant Collateral Vessel was insured at the time of the loss and that the proceeds of the Insurances will be received and applied in accordance with the Finance Documents within such further period; and
(ii) the date of receipt by the Security Agent of the proceeds of insurance relating to the Total Loss; or
(d) to prepay the whole of the Loan, if a Collateral Vessel has for any reason not been delivered to, and accepted by, the relevant Borrower under the relevant Construction Contract by the relevant Back-stop Date, on or before the earlier of the Business Day following payment by the relevant Refund Guarantor under the Refund Guarantee and the date falling thirty (30) Business Days after the relevant Back-stop Date; or
(e) to prepay the whole of the Loan, if an Obligor shall cease to conduct business, on demand of the Administrative Agent; or
(f) to prepay the whole of the Loan, if any GIEK Guarantee shall, for any reason whatsoever, cease to be a valid or effective guarantee, in accordance with its terms, or the outstanding principal of, and interest on, the GIEK Facility Loan or any GIEK Guarantee shall be repudiated or be invalid or unenforceable for any reason, on demand of the Administrative Agent; or
(g) to prepay the GIEK Facility Loan in an amount (together with all accrued interest and other related charges thereon) equal to the excess of disbursed amount of the GIEK Facility Loan over the lesser of (1) eighty percent (80%) of such Contract Amount and (2) $500,000,000, if for any reason the Contract Amount is reduced after an Advance of the GIEK Facility Loan is made; or
(h) to prepay the whole of the GIEK Facility Loan (and the GIEK Facility Lender may cancel its Commitments), if for any reason whatsoever, any GIEK Guarantee ceases to be legally valid and binding or have full force and effect and the GIEK Facility Lender declares the outstanding amounts of the GIEK Facility Loan under this Agreement, together with all accrued interest and other related charges immediately due and payable.
8.9 Change of control of PDSA: mandatory prepayment. If at any time during the Security Period a PDSA Change of Control Event shall occur, the Borrowers shall immediately upon becoming aware thereof give notice to the Administrative Agent. The Administrative Agent shall consult with the other Lenders as to the appropriate action to be taken in the light of representations by the Borrowers as to the consequences of the change of shareholding. Not earlier than thirty (30) days after such PDSA Change of Control Event the Administrative Agent shall, unless all of the Lenders agree otherwise, give notice to the Borrowers requiring the Borrowers to prepay the Loan within seven (7) days of the Administrative Agent’s notice and upon such notice the Total Commitments shall be cancelled in full, and the Borrowers shall prepay the Loan together with accrued interest and any commitment fees at the applicable rate within such seven (7) day period.
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8.10 Change of control of the Borrowers or Internal Charterer or Approved Manager mandatory prepayment. If at any time during the Security Period a Borrower or Internal Charterer or Approved Manager Change of Control Event shall occur, the Borrowers shall immediately upon becoming aware thereof give notice to the Administrative Agent. The Administrative Agent shall consult with the other Lenders as to the appropriate action to be taken in the light of representations by the Borrowers as to the consequences of the change of shareholding. Not earlier than thirty (30) days after such Borrower or Internal Charterer or Approved Manager Change of Control Event the Administrative Agent shall, unless the Majority Lenders agree otherwise, give notice to the Borrowers requiring the Borrowers to prepay the Loan within seven (7) days of the Administrative Agent’s notice and upon such notice the Total Commitments shall be cancelled in full, and the Borrowers shall prepay the Loan together with accrued interest and any commitment fees at the applicable rate within such seven (7) day period.
8.11 [RESERVED]
8.12 Lenders’ Put Option. If the Commercial Credit Facility Loan is not refinanced or renewed on or before February 28, 2019, the GIEK Facility Lender shall have the option to require prepayment of the GIEK Facility Loan by notifying the Borrowers and the Administrative Agent in writing on or before March 6, 2019; any such prepayment demanded shall be paid by the Borrowers on or before May 31, 2019.
8.13 Compensation payable to GIEK Facility Lender on prepayment. Any voluntary prepayment of the GIEK Facility Loan made pursuant to Section 8.4 (or pursuant to any other provision of this Agreement which indicates that this Section 8.13 shall apply) shall be made:
(a) if a LIBOR floating rate of interest applies to the GIEK Facility Loan at the time of voluntary prepayment, any such voluntary prepayment also will be subject to applicable Floating Rate Breakage Costs, plus any funding loss costs; or
(b) if a fixed CIRR Rate of interest applies to the GIEK Facility Loan at the time of prepayment, any such voluntary prepayment together with a prepayment penalty fee on the prepaid amount equal to the amount by which (x) the sum of the present values, discounted from the scheduled dates, of the amounts of interest at the relevant CIRR Rate which otherwise would have accrued on the prepaid principal amount to the scheduled Repayment Dates exceeds (y) the sum of the present values, discounted from the scheduled dates for payment of interest under this Agreement, of the amounts of interest which would have accrued on the prepaid principal amounts if interest were calculated at the Prepayment CIRR. The discount rate used to calculate such present values shall be the Commercial Interest Reference Rate quoted by OECD for a 12 year period in effect on the prepayment date (the “Prepayment CIRR”). For the avoidance of doubt, if the sum of the present values calculated under (x) is lower than the sum of the present values calculated under (y), no prepayment fee shall be payable by the Borrowers to the GIEK Facility Lender or by the GIEK Facility Lender to the Borrowers.
8.14 Compensation payable to Commercial Facility Lenders on prepayment. Any voluntary prepayment of the Commercial Facility Loan made otherwise than on the last day of an Interest Period applicable to the amount prepaid shall be made together with Floating Rate Breakage Costs.
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8.15 Accrued interest payable on prepayment. Any prepayment of the Loan or any part of it shall be made together with accrued but unpaid interest on the amount prepaid.
8.16 Application of partial repayment. Any partial prepayment of the GIEK Facility Loan and/or the Commercial Facility Loan shall, unless otherwise expressly provided, be applied pro rata to the GIEK Facility Loan and the Commercial Facility Loan, in each case in inverse order of maturity.
8.17 No reborrowing. No amount prepaid may be reborrowed.
8.18 Defaulting Lender.
(a) Reallocation of Defaulting Lender Commitment. If a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply with respect to any undrawn Commitment of such Defaulting Lender: any amount paid by the Borrowers or otherwise received by the Administrative Agent for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will not be paid or distributed to such Defaulting Lender, but will instead be retained by the Administrative Agent in a segregated non-interest bearing account until the termination of the Commitments and payment in full of all obligations of the Borrowers hereunder and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following order of priority: first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payment of post-default interest and then current interest due and payable to the Lenders hereunder other than Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, third to the payment of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably among them in accordance with the amounts of such fees then due and payable to them, fourth to pay principal then due and payable to the Non-Defaulting Lenders hereunder ratably in accordance with the amounts thereof then due and payable to them, fifth to the ratable payment of other amounts then due and payable to the Non-Defaulting Lenders, and sixth after the termination of the Commitments and payment in full of all obligations of the Borrowers hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct;
(b) Termination of Defaulting Lender Commitment. The Borrowers may terminate the unused amount of the Commitment of a Defaulting Lender upon not less than ten (10) Business Days’ prior notice to the Administrative Agent (which will promptly notify the Lenders thereof), and in such event the provisions of Section 18 will apply to all amounts thereafter paid by the Borrowers for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that such termination will not be deemed to be a waiver or release of any claim the Borrowers, the Administrative Agent, or any Lender may have against such Defaulting Lender.
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8.19 Obligations of Borrowers joint and several. All obligations of the Borrowers to make payment under this Agreement and the other Finance Documents are joint and several.
8.20 Partial Mandatory Prepayment. Any mandatory partial prepayment of the GIEK Facility Loan and/or the Commercial Facility Loan shall, unless otherwise expressly provided, be applied pro rata to the GIEK Facility Loan and the Commercial Facility Loan, in each case in inverse order of maturity.
9 | CONSOLIDATION OF REPAYMENTS |
9.1 Consolidation of Repayments. Upon the delivery of all of the Collateral Vessels, the Lenders shall, subject to approval from GIEK which approval shall not be unreasonably withheld, consider the consolidation of the repayment periods for each of the Collateral Vessels.
10 | CONDITIONS PRECEDENT |
10.1 Documents, no default. (i) Each Lender’s obligation to contribute to any Advance is subject to the following provisions of Sections 10.2, 10.3 and 10.4 of this Section 10 and that the Closing Date shall have occurred not later than April 30, 2013.
10.2 Pre-Delivery Date Conditions. On or before the service of the first Drawdown Notice, the Administrative Agent shall have received the documents or evidence described in Part A of Schedule 3 in form and substance reasonably satisfactory to the Administrative Agent (unless otherwise specified in Schedule 3).
10.3 Delivery Date Conditions. On or before the Drawdown Date for the Advances to be made on the Delivery Date of each Collateral Vessel, the Administrative Agent shall have received the documents or evidence described in Part B of Schedule 3 in form and substance reasonably satisfactory to the Administrative Agent (unless otherwise specified in Schedule 3).
10.4 Conditions to Each Advance. Each Lender’s obligation to contribute to any Advance is subject to the following conditions precedent:
(a) that the payment of any Project Cost (including Reimbursement Payments) being paid from such Advance is due on or before or within thirty (30) days after the relevant Drawdown Date (together with confirmation from the Builder that all previous installments of the Contract Price due and payable to it under the relevant Construction Contract have been paid);
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(b) that both at the date of each Drawdown Notice and at each Drawdown Date:
(i) no Default or Event of Default has occurred and is continuing or would result from drawdown of the relevant Advances;
(ii) the Repeating Representations and Warranties to be made by each Obligor are true and correct in all material respects if repeated on each of those dates (except to the extent such Repeating Representations and Warranties reference an earlier date, in which case such Repeating Representations and Warranties shall be true and correct in all material respects as of such earlier date) with reference to the circumstances then existing, before and after giving effect to such borrowing or issuance and to the application of the proceeds therefrom or, in the case of the representation and warranty in Section 11.9 (No withholding Taxes), would be true and correct in all material respects if the replacement Schedule 9 (Exceptions to Representations) attached to the Drawdown Notice is substituted for the Schedule 9 attached this Agreement; and
(c) that all Advances and other financing to be made pursuant to this Agreement shall be in full compliance with all applicable requirements;
(d) that since December 31, 2011, there shall not have occurred and be continuing any Material Adverse Effect; and
(e) that at each Drawdown Date all fees payable pursuant to this Agreement on that Drawdown Date have been paid (or will be out of proceeds of the relevant Advances) to the extent invoiced five (5) Business Days prior to such Drawdown Date.
10.5 Waiver of conditions precedent. If the Lenders, at their discretion, permit any Advance to be borrowed before certain of the conditions referred to in Section 10 are satisfied, the Borrowers shall ensure that those conditions are satisfied within five (5) Business Days after the relevant Drawdown Date (or within such longer period as the Administrative Agent may, with the authorization of the Lenders, specify).
11 | REPRESENTATIONS AND WARRANTIES |
11.1 General. Each Obligor represents and warrants to each Finance Party as follows:
11.2 Status. Each Obligor and each of its Subsidiaries (i) is a company duly organized, validly existing and in good standing, or equivalent under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed could not be reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority to own or lease and operate its property and to carry on its business as now conducted and as proposed to be conducted, and (iv) has the capacity to xxx and be sued in its own name. No Obligor and none of their properties or revenues is entitled to any right of immunity in any applicable jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to its Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).
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11.3 Share capital and ownership. PDVIIL is authorized to issue a maximum of 50,000 ordinary registered shares of $1.00 each, of which one share has been issued and fully paid, and the legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim by PDGL. PSS has an authorized share capital divided into 20,000 ordinary registered shares of $1.00 each, all of which shares have been issued and fully paid, and the legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim by PDGL.
11.4 Corporate power. Each Obligor has the corporate power and authority to enter into, and to perform its obligations under, those of the Transaction Documents to which it is a party and has taken all necessary action to authorize the entry into such Transaction Documents and the performance by it of its obligations thereunder.
11.5 Consents in force. Save as disclosed in writing to the Administrative Agent or as disclosed in any of the documents or evidence referred to in Schedule 3 delivered to, and accepted by, the Administrative Agent under this Agreement, all authorizations, approvals, consents, licenses, exemptions, filings, registrations, notarizations and other matters, official or otherwise, required by any Obligor:
(a) in connection with the entry into, performance, validity and enforceability of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated hereby and thereby;
(b) in order to maintain its corporate existence in good standing(or equivalent under local law); and
(c) in order to ensure that it has the right, and is duly qualified and able, to conduct its business as it is conducted in all applicable jurisdictions including, without limitation to the generality of the foregoing, all such consents and approvals as are required to conduct its business and/or own and operate its assets;
have been obtained or effected and are in full force and effect other than any consent or approval required by any Obligor to conduct its business and/or own and operate its assets to the extent that such Obligor is unaware or cannot reasonably be expected to be aware of the requirement to obtain such consent or approval and to the extent that the absence of such consent or approval would not have a Material Adverse Effect on the ability of such Obligor to perform its obligations under the Transaction Documents.
11.6 Legal validity; effective Security Interests. This Agreement constitutes, and each other of the Transaction Documents to which any Obligor is or will be a party, upon execution and delivery thereof will constitute, the legal, valid and binding obligations of the Obligor which is a party thereto, enforceable in accordance with its terms except as such enforcement may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
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11.7 No third party Security Interests. Without limiting the generality of Section 11.6, at the time of the execution and delivery of each Security Document to which any Obligor is a party:
(a) such Obligor will have the right to create all the Security Interests which that Security Document purports to create; and
(b) no third party will have any Security Interest or any other interest, right or claim over, in or in relation to (except, in each case, for Permitted Security Interests) any asset to which any such Security Interest, by its terms, relates.
11.8 No conflicts. The entry into, delivery and performance of the Transaction Documents to which each Obligor is or will be a party and the transactions contemplated hereby and thereby do not and will not contravene or conflict with:
(a) any law, rule, regulation (including, without limitation, Regulation T, U and X of the Board of Governors of the Federal Reserve System), any official or judicial order, writ, judgment, injunction, decree, determination or award; or
(b) the constitutional documents of such Obligor; or
(c) any material agreement or document to which such Obligor is a party or which is binding upon it or any of its assets;
nor, save as contemplated by this Agreement and the other Transaction Documents, result in the creation or imposition of any Security Interest on any of the assets of any Obligor pursuant to the provisions of any such agreement or document.
No Obligor or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which could reasonably be expected to result in a Material Adverse Effect.
11.9 No withholding Taxes. All amounts payable by the Obligors under the Finance Documents may be paid free and clear of, and without deduction or withholding for or on account of, any Taxes, except as described in Schedule 9 (Exceptions to Representations).
11.10 No default.
(a) No Default or Event of Default has occurred and is continuing or may reasonably be expected to result from drawdown of the relevant Advances; and
(b) No event has occurred which constitutes a material default under or in respect of any agreement or document to which any Obligor is a party or by which any Obligor may be bound and which default will have, or may reasonably be expected to have, a Material Adverse Effect on the ability of such Obligor to perform its respective obligations under this Agreement and the other Transaction Documents.
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11.11 Information. No information, exhibit or report furnished by or on behalf of any Obligor (other than projected financial information, pro forma financial information, market data and information of a general economic or industry nature) to the Administrative Agent or any Finance Party in connection with the negotiation and syndication of the Finance Documents or pursuant to the terms of the Finance Documents, when taken as a whole, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading. With respect to projected financial information and pro forma financial information furnished to the Administrative Agent, the Borrowers represent that such information has been or will be prepared in good faith based upon accounting principles consistent with the Borrowers’ historical audited financial statements and upon assumptions believed by the Borrowers to be reasonable at the time made, it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections, and such differences may be material.
11.12 Financial Condition.
(a) The Consolidated balance sheets of PDSA and its Subsidiaries as at December 31, 2011 and the related Consolidated Statements of income and of cash flows for the fiscal years ended on such dates, reported on by KPMG LLP, copies of which have heretofore been furnished to each Lender, present fairly, in all material respects, the Consolidated financial condition of PDSA and its Subsidiaries as at such dates, and the Consolidated results of their operations and their Consolidated cash flows for the fiscal years then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods.
(b) Since December 31, 2011, there has been no change in the business, condition (financial or otherwise), operations or prospects of any Obligor which has had or could reasonably be expected to have a Material Adverse Effect.
11.13 Insolvency proceedings. The Borrowers have not, and no Obligor has, taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of the knowledge and belief of the Borrowers) threatened against any of the Borrowers or any other Obligor for its winding-up or dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of the Borrowers or any other Obligor of any or all of its assets or revenues nor has the Borrowers or any other Obligor sought any other relief under any applicable insolvency or bankruptcy law.
11.14 No litigation. There is no action, suit, investigation, litigation or proceeding against any Obligor or any of its Subsidiaries, including any Environmental Action, pending or, to the knowledge of any Obligor after due enquiry, threatened before any Government Entity or arbitrator (i) as to which there is a reasonable possibility of adverse determination and that if adversely determined, could reasonably be expected to result in a Material Adverse Effect or (ii) that purports to affect the legality, validity or enforceability of
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any Finance Document or the consummation of any of the transactions contemplated under this Agreement by any Obligor, and there has been no adverse change in the status, or financial effect on any Obligor or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 6 hereto that could reasonably be expected to result in a Material Adverse Effect.
11.15 Completeness of Transaction Documents. The copy of each Transaction Document (other than the Finance Documents) delivered to the Administrative Agent on or before the Closing Date is a true and complete copy and no amendments or additions to any such Transaction Document have been agreed prior to the Closing Date.
11.16 Security Documents.
(a) Security Perfection - Closing Date. As of the Closing Date, the Security Agent will have a perfected security interest in the Collateral described in each sub-clause below upon the taking of the action described therein, and such action will have been taken by Borrowers on behalf of the Security Agent as of the Closing Date, (i) the Construction Contracts upon notice to the Builder of the assignment of the applicable Construction Contract; (ii) the Refund Guarantees, upon notice to each Refund Guarantor of the assignment of the applicable Refund Guarantee; (iii) the Earnings Accounts, upon execution of the applicable Account Control Agreements, (iv) the shares in PDVIIL upon receipt by the Security Agent of (w) an original share certificate reflecting the shares in PDVIIL, (x) a share transfer power in respect of the shares in PDVIIL; (y) irrevocable proxies in respect of PDVIIL, and (z) undated resignations from the officers of PDVIIL; (v) the shares in PSS upon execution of the Luxembourg Share Pledge Agreement; and (vi) if applicable, the Assignment of Management Agreement in connection with each Collateral Vessel, upon notice to the Approved Manager, and the consent of such Approved Manager to such assignment; and in the case of each of the items listed in sub-paragraphs (a) (i) through (vi), upon the filing of Uniform Commercial Code Financing Statements in the District of Columbia and the State of Texas naming as debtor, as appropriate the relevant Borrower.
(b) Security Perfection - Delivery Date. As of the Delivery Date of each Collateral Vessel (i) the relevant Ship Mortgage shall be duly executed and delivered, duly received for recording and duly recorded with the Maritime Administrator at the office of the Deputy Commissioner of Maritime Affairs of the Republic of Liberia, and shall constitute the legal, valid and binding obligation of the applicable Borrower in accordance with its terms, and constitute a valid first preferred mortgage on the applicable Collateral Vessel pursuant to the laws of the Republic of Liberia in favor of the Security Agent as mortgagee and trustee for the benefit of the Lenders; (ii) the Assignment of Insurances and the Assignment of Re-insurances in connection with the applicable Collateral Vessel shall have been executed by each of the parties thereto and notice shall have been given to each underwriter and the loss payable clauses satisfactory to the Security Agent shall have been delivered to the underwriters and the Security Agent’s interest in all the applicable Insurances in connection with such Collateral Vessel shall have been duly endorsed on the Insurances; (iii) if applicable, each Assignment of Internal Charter in connection with the applicable Collateral Vessel shall have been executed by each of the parties thereto; (iv) the Assignment of Earnings in connection with the applicable Collateral Vessel shall have been executed by each of the parties thereto and notice shall have been given to each charterer or drilling contract operator; and (v) if applicable, each Assignment of Management Agreement in connection with the applicable Collateral Vessel shall have been executed by each of the parties thereto and notice shall have been provided to the Approved Manager of the
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applicable Collateral Vessel and such Approved Manager shall have consented to such assignment; and in the case of each of the items listed in sub-paragraphs (b) (ii) through (v) a Uniform Commercial Code Financing Statement has been filed in the District of Columbia, the State of Texas or any other applicable jurisdiction against the applicable Borrower or Internal Charterer, as the case may be.
11.17 Executive office. Except as disclosed in writing to the Administrative Agent from time to time, its place of incorporation is set forth in the recital of parties to this Agreement; its principal places of business is in Luxembourg (in respect of PSS), in Houston, Texas (in respect of PDVIIL) and in Luxembourg (in respect of PDSA); and its management and control and, as applicable, its center of main interests is exercised in Luxembourg (in respect of PSS), in Houston, Texas (in respect of PDVIIL) and in Luxembourg (in respect of PDSA).
11.18 Solvency. Each Obligor is, individually and together with its Subsidiaries, Solvent.
11.19 Corrupt practices. The Borrowers have observed all applicable laws and regulations relating to bribery and corrupt practices.
11.20 No Margin Stock. The Obligors are not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock (within the meaning of Regulation U issued by the Federal Reserve Board), and no proceeds of any Advance will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.
11.21 No “Investment Company”. Neither any Obligor nor any of its Subsidiaries is an “investment company”, or an “affiliated Person” of, or “promoter” or “principal underwriter” for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Advances, nor the application of the proceeds or repayment thereof by the Borrowers nor the consummation of the other transactions contemplated by the Transaction Documents, will violate any provision of any such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.
11.22 Pari passu obligations. The obligation:
(a) of the Borrowers to repay the Loans under this Agreement and the Finance Documents ranks at least pari passu in right of payment with all other senior unsecured obligations of the Borrowers;
(b) of PDSA as Guarantor of the Obligations of the Borrowers under the Finance Documents under the “PDSA Guaranty” set forth in Section 32 ranks at least pari passu in right of payment with all other senior unsecured obligations of PDSA.
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11.23 ERISA.
(a) Each of the Borrowers, the Guarantors and their respective ERISA Affiliates is in compliance with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder, except as could not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(b) No ERISA Events have occurred or are reasonably expected to occur that, alone or together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
(c) The present value of all benefit liabilities under each Plan (based on the assumptions used for purposes of Accounting Standards Codification Topic No. 715 (Compensation - Retirement Benefits) (“ASC 715”) did not, as of the last annual valuation date applicable thereto, exceed the fair market value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of ASC 715) did not, as of the last annual valuation dates applicable thereto, exceed the fair market value of the assets of all such underfunded Plans except in each such case where such underfunding could not, alone or together with all other Plan underfundings, reasonably be expected to have a Material Adverse Effect.
(d) None of the Borrowers, the Guarantors, their respective ERISA Affiliates or their respective Subsidiaries sponsors, maintains, makes contributions to or is obliged to make contributions to any Foreign Pension Plan.
12 | GENERAL UNDERTAKINGS |
12.1 General. Each Obligor undertakes with each Finance Party to comply with the following provisions of this Section 12 at all times during the Security Period except as the Administrative Agent may, with the authorization of the Majority Lenders otherwise permit.
12.2 Title; negative pledge. The Obligors will:
(a) hold the legal title to, and own the entire beneficial interest in, the Assigned Assets, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and except for Permitted Security Interests;
(b) save as contemplated by the Transaction Documents, not create or permit to arise any Security Interest (except for Permitted Security Interests and Other Permitted Security Interests) over any other asset of the Borrower, present or future; and
(c) not deliver a Collateral Vessel under any charter or drilling contract prior to the due recording of the Ship Mortgage of such Collateral Vessel in accordance with the provisions of this Agreement.
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12.3 Limitations on liabilities or obligations to be incurred. The Borrowers will not incur any liability or obligation except:
(a) liabilities and obligations under the Transaction Documents to which it is a party;
(b) liabilities and obligations reasonably incurred in respect of derivative transactions entered into to hedge those liabilities and obligations referred to in paragraph (a) and not for speculative purposes;
(c) liabilities and obligations reasonably incurred in respect of the ownership, operation and chartering out of the Collateral Vessels;
(d) liabilities in respect of any Management Agreement or Internal Charter;
(e) liabilities permitted under Section 13.5; and
(f) Permitted Security Interests and Other Permitted Security Interests.
12.4 Provision of financial statements. The Obligors will send to the Administrative Agent:
(a) as soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year, a copy of the annual audit report for such year for PDSA and its Subsidiaries, including therein a Consolidated balance sheet of PDSA and its Subsidiaries as of the end of such fiscal year and a Consolidated statement of income and a Consolidated statement of cash flows of PDSA and its Subsidiaries for such fiscal year, in each case accompanied by an opinion thereon of KPMG LLP or other independent public accountants of recognized standing reasonably acceptable to the Administrative Agent;
(b) as soon as available and in any event within seventy five (75) days after the end of each of the first three (3) quarters of each fiscal year, unaudited interim financial statements of PDSA;
(c) with the financial statements provided pursuant to subparagraphs (a) and (b) above, a statement in reasonable detail (each, a “Certificate of Compliance”), signed by the chief financial officer of PDSA (i) stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that PDSA has taken and proposes to take with respect thereto and (ii) setting forth reasonably detailed calculations demonstrating compliance with the financial covenants contained in Section 13.8 as of the end of such fiscal quarter;
(d) not later than January 31st of each year, an annual budget and cash flow projections of PDSA;
(e) all documents dispatched by PDSA to its shareholders or its creditors generally and which can be delivered without breach of confidentiality or any applicable law; and
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(f) such other financial or other information as the Administrative Agent may from time to time reasonably request and which can be delivered without breach of confidentiality or any applicable law.
12.5 Form of financial statements. All financial statements (audited and unaudited) delivered under Section 12.4 will:
(a) be prepared in accordance with GAAP, consistently applied;
(b) give a true and fair view of the state of affairs of PDSA and its Subsidiaries at the date of those financial statements and of its profit for the period to which those financial statements relate; and
(c) fully disclose or provide for all significant liabilities of PDSA in accordance with GAAP.
12.6 Consents. The Obligors will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Administrative Agent of, all consents required:
(a) for the Borrowers to perform their respective obligations under any Transaction Document to which they are a party; and
(b) for the validity or enforceability of any such Transaction Document,
and the Borrowers will comply with the terms of all such consents.
12.7 Payment of Taxes. Each Obligor (i) will file when due all material Tax returns and other material documents relating to Taxes that such Obligor is required by law to file, and will pay when due all material Taxes that such Obligor is required by law to pay (other than Taxes which it is contesting in good faith by appropriate proceedings in a manner that does not involve any risk of criminal penalty or any reasonable possibility of sale, forfeiture, confiscation, seizure or loss of, or the imposition of any Security Interest on, any Collateral or any interest therein, and for which it maintains appropriate reserves in accordance with GAAP), and (ii) will notify the Administrative Agent promptly upon becoming aware of any failure to comply with this Section 12.7.
12.8 Compliance with laws. The Obligors will, and will procure that each of its Subsidiaries will, manage its business in all material respects in compliance with all relevant applicable laws and regulations such compliance to include, without limitation, compliance with the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect and the Obligors shall notify the Administrative Agent immediately upon becoming aware of any breach of the same.
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12.9 Notification of default. The Obligors will promptly upon obtaining knowledge thereof, notify the Administrative Agent, in writing, of the occurrence of an Event of Default or a Default setting forth details of such Event of Default or a Default and the action that each relevant Obligor has taken and proposes to take with respect thereto, and will keep the Administrative Agent fully up-to-date with all material developments.
12.10 Notification of litigation. The Obligors will, promptly after the commencement thereof, notify the Administrative Agent of all actions, suits, investigations, litigation and proceedings before any Government Entity against any Obligor or any of its Subsidiaries of the type described in Section 11.14, and promptly after the occurrence thereof, notify the Administrative Agent of any material adverse change in the status or the financial effect on any Obligor or any of its Subsidiaries of the Disclosed Litigation from that described on Schedule 6 hereto.
12.11 Securities Reports. In the event that the proxy statements, financial statements and other reports referred to in this Section 12.11 are no longer readily available on XXXXX, promptly after the sending or filing thereof (or promptly upon the same becoming publicly available in the case of an Obligor whose shares are listed on any national securities exchange), the Obligors will provide to the Administrative Agent, copies of all proxy statements, financial statements and reports that any Obligor or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements, that any Obligor or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange.
12.12 Environmental Conditions. Promptly after the assertion or occurrence thereof, the Obligors will notify the Administrative Agent of any Environmental Action against or of any noncompliance by any Obligor or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause a Collateral Vessel to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law.
12.13 Access to books and records. The Obligors shall permit one or more representatives of the Administrative Agent, at the request of the Administrative Agent, to have reasonable access to its books and records and to inspect the same during normal business hours at its offices upon reasonable prior written notice. If a Default or an Event of Default has occurred and is continuing, the cost of inspection shall be for the account of the relevant Obligor.
12.14 Money laundering. Promptly upon the Administrative Agent’s request, the Obligors will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent in order for each Finance Party to carry out and be satisfied with the results of all necessary “know your client” or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any Obligor, any Approved Manager, any Internal Charterer or the Pledgor and their respective directors and officers.
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12.15 Corrupt practices. The Obligors shall act in compliance with all applicable laws and regulations relating to bribery and corrupt practices and shall use all reasonable efforts to procure that any Person acting on its behalf also acts in such manner in the course of acting for the Borrower.
12.16 Amendments.
(a) Amendments of Constitutive Documents. The Obligors will not amend their respective operating agreements or other constitutive documents, in each case, if such amendment would be adverse to the interests of the Finance Parties.
(b) Amendments of Construction Contracts and Refund Guarantees. The Borrowers will not novate or, in any way that is materially adverse to the interests of the Lenders without the prior written consent of the Majority Lenders, amend, modify, supplement or give any waiver under or vary any term of (other than (i) as permitted pursuant to the next succeeding sentence of this Section 12.16(b) and (ii) any extension of the Back-stop Date in accordance with clause (b) of the definition thereof), any of the Construction Contracts or Refund Guarantees. Notwithstanding the provisions of the foregoing sentence, the Borrowers may enter into change orders and other amendments, supplements and modifications of the Construction Contracts to the extent that they result in the increase of the Contract Price, provided however that in the event any such proposed change order or other amendment, supplement or modification is likely to result in an increase in the Contract Price for a Collateral Vessel as of the Closing Date by more than five percent (5%) (excluding the amount of any such increases for which the Borrowers will be reimbursed to the extent the Borrower has notified the Administrative Agent of the same), the Borrowers shall give the Administrative Agent three (3) Business Days’ advance written notice of such increase and any subsequent individual or aggregate increase of one percent (1%) in the Contract Price of such Collateral Vessel provided in no event shall the Contract Price of a Collateral Vessel be increased by more than ten percent (10%) (excluding the amount of any such increases for which the Borrowers will be reimbursed to the extent the Borrower has notified the Administrative Agent of the same) of its Contract Price as of the Closing Date without the prior written consent of the Majority Lenders.
(c) Notice of Amendments of Construction Contracts, Refund Guarantees and Satisfactory Drilling Contracts. On or prior to January 30th, April 30th, July 30th and October 30th of each calendar year, the Borrowers shall deliver to the Administrative Agent a summary of all material amendments, modifications, supplements or any other material changes, waivers or variations to the Construction Contracts, the Refund Guarantees or the Satisfactory Drilling Contracts entered into during the preceding three (3) months.
12.17 Transaction with Affiliates. Except as expressly provided for or contemplated in any Finance Document (including without limitation, the making of any Reimbursement Payment), the Obligors will not sell, lease, transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from or otherwise engage in any other transactions with, any of its Affiliates, except (i) in the ordinary course of business at prices and on terms and conditions not less favorable to such Obligor than could be obtained on an arm’s length basis from unrelated third parties, (ii) transactions between or among the Obligors that do not involve any other Affiliate not otherwise permitted to be party to such transaction pursuant to this Section 12.17 and (iii) transactions between an Obligor and a Person that is a Subsidiary of such Obligor.
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12.18 ERISA. The Borrowers will give the Administrative Agent (which shall promptly provide to each Lender) prompt written notice of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
12.19 Notification of Changes to Approved Manager. The Borrowers will promptly, but in any event within five (5) Business Days, notify the Administrative Agent, in writing, of any appointment of or termination of the appointment of, an Approved Manager. Prior to or concomitantly with the execution and delivery of any Management Agreement, the Borrowers will execute and deliver to the Administrative Agent an Assignment of Management Agreement.
12.20 Certain Lender Consent Rights Regarding Satisfactory Drilling Contracts. The Borrowers will ensure that, unless the prior written consent of the Majority Lenders has been obtained, no Satisfactory Drilling Contract will be amended, waived or modified in any manner that (i) materially reduces its original term (including any optional extensions originally therein contained), or (ii) results in a material adverse change to the day rate from the day rate originally therein contained (it being understood, for the avoidance of doubt, that “adverse “ means adverse considered from the viewpoint of the Borrower or Internal Charterer party to such Satisfactory Drilling Contract).
12.21 Certain Lender Consent Rights Regarding Drilling Contracts. The Borrowers will ensure that, unless the prior written consent of all Lenders has been obtained, no rig or vessel other than a Collateral Vessel will be employed to perform a Satisfactory Drilling Contract or any other charter or drilling contract under which a Collateral Vessel is employed, in any case for more than thirty (30) calendar days.
12.22 GIEK Guarantees.
(a) The Borrowers shall at all times comply with the terms and conditions contained in the GIEK Guarantees, incorporated herein by reference as if said conditions in the GIEK Guarantees were set out in full in this Agreement.
(b) The Borrowers shall, for as long as any amount remains outstanding under the GIEK Facility Loan, procure that their obligations and liabilities hereunder in respect of the GIEK Facility Loan are secured by the GIEK Guarantees satisfactory to the GIEK Facility Lender (in the GIEK Facility Lender’s sole discretion).
13 | CORPORATE UNDERTAKINGS |
13.1 General. The Borrowers and the Guarantor, as the case may be, also undertake with each Finance Party to comply with the following provisions of this Section 13 at all times during the Security Period except as the Administrative Agent may, with the authorization of the Majority Lenders, otherwise permit.
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13.2 Maintenance of status. Except as otherwise permitted pursuant to Section 13.4, each Obligor will preserve and maintain, each Obligor will cause the Pledgor, any Internal Charterer or any Approved Manager to preserve and maintain, and each Borrower will cause each of its Subsidiaries to preserve and maintain, its existence and good standing (or equivalent under its jurisdiction of incorporation), in its jurisdiction of incorporation, legal structure, legal name, rights (charter and statutory), permits, licenses, approvals, privileges and franchises material to the conduct of its business.
13.3 Mergers of the Guarantor. The Guarantor will not enter into any form of amalgamation, consolidation, merger or de-merger or any form of reconstruction or reorganization unless the Guarantor is the surviving entity in any such action.
13.4 No Change in Organization. Neither the Obligors nor the Pledgor nor, if applicable, any Internal Charterer will (x) change its organization form or (y) change its jurisdiction of organization, without the prior written consent of the Lenders. Notwithstanding the foregoing, either Borrower may change its domicile to Luxembourg or Gibraltar, provided, that (x) the Lenders’ Security Interests and priority are not adversely affected in any material respect by such change, (y) the applicable Borrower has given the Administrative Agent fifteen (15) Business Days prior written notice of such proposed change in domicile and (z) the Lenders shall have received legal opinions from local counsel addressed to the Lenders, in scope and substance reasonably satisfactory to the Administrative Agent and at the applicable Borrower’s expense.
13.5 Negative undertakings. The Borrowers will not:
(a) carry on any business other than the disponent ownership, operation and chartering out of the Collateral Vessels and matters reasonably incidental thereto (as contemplated by the Transaction Documents); nor
(b) save for the Security Interests granted or to be granted pursuant to the Security Documents, provide or issue any guarantee of any liability or obligation of any other Person (other than Permitted Security Interests and Other Permitted Security Interests); nor
(c) make any loan or provide any form of credit or financial assistance to any Person other than (i) pursuant to the Finance Documents, (ii) intra-Group Indebtedness owing to the Borrowers and (iii) any interests in loans, notes or other form of credit received in compromise or resolution of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer and any loans, notes or other form of credit obtained in exchange for any such loans, notes or other form of credit; nor
(d) create, incur, assume, permit, or suffer to exist any Indebtedness of itself except (A) Indebtedness incurred under the terms of this Agreement, (B) Indebtedness in respect of the Finance Documents; and (C) intra-Group Indebtedness, provided, that any shareholder and/or inter company loans of the Obligors shall be in all respects subordinated to the terms of this Agreement; and (D) Indebtedness pursuant to statutory obligations, surety, customs, importation or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business (including letters of credit, bank guarantees and similar instruments issued in support of such obligations); nor
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(e) save for the Security Interests granted or to be granted pursuant to the Finance Documents, create, incur, assume, permit, or suffer to exist any Security Interest on itself or any of its assets (other than Permitted Security Interests and Other Permitted Security Interests); nor
(f) enter into any form of amalgamation, consolidation, merger or de-merger or any form of reconstruction or reorganization (except as permitted in accordance with Section 13.4) unless a Borrower or the Guarantor is the surviving entity in any such action; nor
(g) engage in any advance, loan, extension of credit or capital contribution to, or otherwise acquire any stock, bonds, notes, debentures or other securities of, membership interest in, or any assets constituting a business unit of or make any other investment in, any Person (all of the foregoing, collectively, “Investments”) except (i) the Borrowers may create Subsidiaries and may transfer assets thereto as set forth in Section 29.1, (ii) pursuant to the Finance Documents, (iii) Investments in Cash Equivalents, (iv) intra-Group Indebtedness owing to the Borrowers and (v) any Investments received in compromise or resolution of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer and any Investments obtained in exchange for any such Investments.
13.6 Business. There shall be no change of the business conducted by the Borrowers or the Guarantor without the prior written consent of the Lenders.
13.7 Notice of dividends etc. The Guarantor shall give prompt notice to the Administrative Agent of the declaration and/or payment of any dividend or other form of distribution to its shareholders.
13.8 Financial Covenants. So long as any Advance or any other Obligation of any Obligor under any Finance Document shall remain unpaid or any Lender shall have any Commitment hereunder, the following covenants shall apply:
(a) Consolidated Tangible Net Worth. PDSA shall maintain at all times a Consolidated Tangible Net Worth (as defined below) of at least US$1 billion.
(b) Leverage Ratio. Commencing with the fiscal quarter ending December 31, 2013 through and including the fiscal quarter ending March 31, 2014, PDSA shall maintain at the end of each fiscal quarter of PDSA, on a Consolidated basis, a ratio of Net Debt (as defined below) to EBITDA (as defined below) of not greater than 5.50 : 1.00, reducing to 5.00 : 1.00 commencing with the fiscal quarter ending June 30, 2014 through and including the fiscal quarter ending December 31, 2014, reducing to 4.50 : 1.00 commencing with the fiscal quarter ending March 31, 2015 through and including the fiscal quarter ending September 30, 2015, reducing to 4.00 : 1.00 commencing with the fiscal quarter ending December 31, 2015 and every quarter thereafter. “Net Debt” means Total Debt, (including, without duplication, operating leases) minus unrestricted cash and Cash Equivalents and restricted cash or Cash Equivalents held as collateral for any such debt. Prior to December 31, 2014, Net Debt shall not include Indebtedness associated with the Collateral Vessels.
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(c) Projected Debt Service Cover Ratio (“DSCR”). For the following four fiscal quarters, the Projected DSCR of PDSA shall be greater than:
(i) commencing December 31, 2013, 1.125 : 1.00; and
(ii) from March 31, 2014 through and including December 31, 2014, 1.25 : 1.00; and
(iii) from March 31, 2015 and every quarter thereafter, 1.50 : 1.00.
(d) Total Debt to Total Capitalization Ratio. PDSA shall maintain, at all times, a ratio of Total Debt to Total Capitalization (each as defined below) for the four fiscal quarters ended as of the end of such quarter not greater than 3.0 : 5.0.
(e) Total Debt. PDSA shall maintain, for the period up to and including September 30, 2013, Total Debt not greater than $3,000,000,000.
(f) Minimum Liquidity. The Group shall maintain at all times, commencing on the Closing Date, in the Group Corporate Accounts (free and clear of all liens or restrictions other than Security Interests created in connection with the Finance Documents), in cash or Cash Equivalents, aggregate amounts no less than $50,000,000.
(g) Minimum Value.
(i) In respect of the first Collateral Vessel delivered, the Fair Market Value of such Collateral Vessel then subject to a Ship Mortgage, shall at all times, on and after delivery, be at least 125% of the sum of the then aggregate outstanding principal amount of each of the GIEK Facility Loan and the Commercial Facility Loan attributable to that Collateral Vessel, until the delivery of the second Collateral Vessel.
(ii) On or after delivery of both Collateral Vessels, the aggregate Fair Market Value of all Collateral Vessels, then subject to a Ship Mortgage, shall at all times, be at least 125% of the sum of the then aggregate outstanding principal amount under this Agreement.
Notwithstanding the foregoing, failure to satisfy the covenant set forth in this Section 13.8(g) shall not be an Event of Default if the Borrowers have restored the Fair Market Value requirements in accordance with Section 16.3 of this Agreement.
(h) Definitions. For purposes of this Section 13.8, the following terms shall have the following meanings:
“Consolidated Tangible Net Worth” means, as of any date of determination, Consolidated shareholders equity of the Group determined in accordance with GAAP, but excluding the effect on shareholders equity of cumulative foreign exchange translation adjustments, and less the net book amount of all assets of the Group that would be classified as intangible assets on the Consolidated balance sheet of PDSA as of such date prepared in accordance with GAAP. For purposes of this definition, SPVs shall be accounted for pursuant to the equity method of accounting.
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“EBITDA” means, for the four most recently completed fiscal quarters, the operating profit of the Group before taxation (excluding the results from discontinued operations):
(i) before deducting any interest, commission, fees, discounts, prepayment fees, premiums or charges and other finance payments whether paid, payable or capitalized by any Obligor (calculated on a consolidating basis) in respect of that specified period;
(ii) before deducting any amount attributable to the amortization, depreciation or impairment of assets of any Obligor (and taking no account of the reversal of any previous impairment charge made in that specified period);
(iii) not including any accrued interest owing to any Obligor;
(iv) before taking into account any exceptional items;
(v) after deducting the amount of any profit (or adding back the amount of any loss) of any Obligor that is attributable to minority interests;
(vi) after deducting the amount of any profit of any non-Group entity to the extent that the amount of the profit included in the financial statements of the Obligors exceeds the amount actually received in cash by any Obligor through distributions by the non-Group entity;
(vii) before taking into account any unrealized gains or losses on any financial instrument (other than any derivative instrument that is accounted for on a hedge accounting basis);
(viii) before taking into account any gain arising from an upward revaluation of any other asset at any time,
in each case, to the extent added, deducted or taken into account, as the case may be, for the purposes of determining operating profits of the Group before taxation.
“Fair Market Value” for purposes of this Agreement means in respect of any vessel, including, without limitation, any Collateral Vessel, the fair market value of such vessel, free of any charter party agreement or other contract for its employment in each case, and being:
(a) the amount calculated as the simple mean average of the valuation determined, at the cost and expense of the relevant vessel owner, by two Approved Brokers; or
(b) if the greater of the two valuations referred to in paragraph (a) of this definition is more than 110% of the lower of the two valuations, the amount calculated as the simple average of the valuation determined, at the cost and expense of the Borrowers, by three Approved Brokers (being those referred to in paragraph (a) of this definition plus one additional Approved Broker); provided, however, that if the lower of the two valuations referred to in paragraph (a) of this definition is at least equal to the threshold required at that time by the Minimum Value provision (Section 13.8(g)), no third valuation shall be required. The Fair Market Value of each Collateral Vessel shall be determined, at delivery and annually thereafter, and, if a Default or Event of Default has occurred and is continuing, as the Administrative Agent may require. All valuations shall be at the Borrowers’ cost; all such valuations shall be conclusive and binding.
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“Projected DSCR” means, for a specified period following the date of calculation, the ratio of:
(i) EBITDA of the Group for such specified period; to
(ii) all obligations of members of the Group to pay interest (net of hedging payments and receipts) forecast to be paid during such specified period plus one tenth (1/10th) of Total Debt.
“Total Capitalization” means, as of any date of determination, the sum of Total Debt plus Consolidated Tangible Net Worth as of such date.
“Total Debt” means, as to PDSA and its Consolidated Subsidiaries at any time, the aggregate sum of (a) all Indebtedness (as reflected on the Consolidated balance sheet of PDSA) but excluding (x) Indebtedness of the type described in clause (d) of the definition thereof, (y) temporary importation bonds relating to the Collateral Vessels or such vessels owned or operated by PDSA or its Subsidiaries and (z) undrawn Commitments under this Agreement and (b) (without duplication):
(i) obligations under any operating lease;
(ii) any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;
(iii) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(iv) the amount of any liability in respect of any lease or hire purchase contract that, in accordance with GAAP, would be treated as indebtedness under a finance or capital lease;
(v) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(vi) the amount of any liability in respect of any purchase price for assets or services the payment of which is deferred for a period in excess of ninety (90) days in order to raise finance or to finance the acquisition of those assets or services;
(vii) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(viii) the net amount due under any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative;
(ix) transaction, the marked to market value shall not be taken into account until such time as the relevant derivative transaction is terminated);
(x) any counter-indemnity obligation in respect of amounts already paid under a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial or other institution; and
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(xi) the amount of any liability (without duplication) in respect of any guarantee or indemnity for any of the items referred to in paragraphs (i) to (x) of this definition.
13.9 Stock Exchange Listing. The Guarantor shall maintain its listing on the New York Stock Exchange or such other stock exchange acceptable to the Lenders.
13.10 Dividends. The Borrowers may pay dividends and make distributions to the Guarantor at any time without limitation. Except as provided in the following two sentences, the Guarantor will not pay any dividends or make any other form of distribution to its shareholders at any time.
(a) The Guarantor shall be allowed to pay dividends of up to 50% of its cumulative positive Net Income (as defined by GAAP) for the year 2013 as long as: (i) no Default or Event of Default exists at the time of payment thereof; (ii) the Guarantor and the Borrowers are in compliance with the financial covenants set forth in Section 13.8 (including the Minimum Value set forth in Section 13.8(g)) immediately before and after payment of such dividends; and (iii) the Audited Financial Statements for fiscal year 2013 provided to the Lenders reflect that the ratio of Net Debt to EBITDA is less than 5.00:1.00.
(b) Commencing the first fiscal quarter of the year 2014 and for each fiscal quarter thereafter, the Guarantor shall be allowed to pay (on a cumulative calendar year basis) quarterly dividends of up to 50% of its positive Net Income (as defined by GAAP) only as long as: (i) no Default or Event of Default exists at the time of payment thereof; (ii) the Guarantor and the Borrowers are in compliance with the financial covenants set forth in Section 13.8 (including the Minimum Value set forth in Section 13.8(g)) immediately before and after payment of such dividends, and (iii) such dividends are paid during the following calendar year. For the avoidance of doubt, this Section 13.10(b) shall not apply to dividends of positive Net Income earned during the year 2013, which shall be governed by Section 13.10(a) above.
14 | INSURANCE |
14.1 General. The Borrowers shall comply, or procure compliance, with the following provisions of this Section 14 at all times during the Security Period (after a Collateral Vessel has been delivered under the relevant Construction Contract) and as provided in the Ship Mortgage except as the Administrative Agent may, with the authorization of the Majority Lenders, otherwise permit.
14.2 Risks insured and amount of cover. Each Borrower shall, at all times and at its own cost and expense, cause to be carried and maintained, insurance on its Collateral Vessel and keep its Collateral Vessel insured in the name of the relevant Borrower and any other Persons with an insurable interest therein on terms and in forms which are customary and reflect the prudent practice of other responsible and experienced persons of similar size and established reputation engaged in the same or similar operation and within the same geographic location as the Collateral Vessels, against:
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(a) fire and usual marine risks, Hull and Machinery, Hull Interest (or Increased Value), ACOC Insurance and War Risks (including terrorism, piracy, and confiscation, per common conditions and exclusions) on an agreed value basis of at least equal to $650,000,000 and Loss of Hire on a 45/90/90 basis per delivered Collateral Vessel, and the aggregate of insurances covering all Collateral Vessels, following delivery of all Collateral Vessels, shall be at least equal to the greater of (i) $650,000,000 per delivered Collateral Vessel and (ii) 120% of the aggregate outstanding amount of the Loan. In addition, the Hull and Machinery insured value of each Collateral Vessel shall, at all times following the relevant Delivery Date, be equal to or greater than 60% of the insured value of such Collateral Vessel, and the aggregate Hull and Machinery insured value of all delivered Collateral Vessels shall be equal to or greater than 60% of the aggregate insured values of such Collateral Vessels, while the remaining cover is to be taken out by way of Hull Interest Insurance (i.e. Increased Value) and ACOC Insurance;
(b) subject always to the proviso at the end of this Section 14.2, Protection and Indemnity risks in respect of a Collateral Vessel’s full tonnage, and insurance against liability for pollution by the Collateral Vessel in an amount equal to the highest level of cover from time to time available under basic protection by the entry of such Collateral Vessel in a protection and indemnity association or club belonging to the International Group of P&I Clubs or insurance companies providing equivalent protection;
(c) all other risks respecting a vessel which are customarily insured against by leading operators of vessels of the same age and type as the Collateral Vessels in accordance with then current industry practice and taking account of the areas in which the Collateral Vessels may operate from time to time, with windstorm coverage exclusions while a Collateral Vessel is operating in the Gulf of Mexico;
(d) placed by either the Administrative Agent for the benefit of the Lenders, at the expense of the Borrowers, or placed by the Borrowers for the benefit of the Lenders, mortgagee’s interest insurance (“MII”) and mortgagee’s additional perils (pollution) insurance (“MAPI”), on conditions acceptable to the Administrative Agent in an amount of 120% of the aggregate outstanding amount of the Loan, and the Administrative Agent on behalf of the Finance Parties agrees to obtain and maintain the same if such MII and MAPI is not included in the Borrowers’ general marine package taken out on or about each relevant Delivery Date.
14.3 Port risk cover. While a Collateral Vessel is laid up, port risk insurance may be taken out on the Collateral Vessel by the Borrowers instead of the aforesaid hull insurance, on normal market terms, subject to the approval of the Administrative Agent not to be unreasonably withheld or delayed.
14.4 Terms of cover. The Borrowers shall procure that the Insurances for the Collateral Vessels shall:
(a) be effected through owner’s approved broker (the “Owner’s Insurance Broker”) and reputable independent insurance companies and/or underwriters (including mutual insurance schemes and /or captive insurance schemes) in Europe, North America, the Far East and other established insurance markets except that the insurances against protection and indemnity risks may be effected by the entry of the Collateral Vessels with protection and indemnity associations which are members of the IGA or, if the IGA has disbanded and there is no successor or replacement body of associations, other leading protection and indemnity associations and the insurances against war risks may be effected by the entry of the Collateral Vessel with leading war risks associations;
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(b) provide that all amounts payable thereunder shall be payable in Dollars or any other currency approved by the Administrative Agent;
(c) in all other respects be in a form and on terms customary in the insurance markets in which the cover is placed and/or as otherwise approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed).
14.5 Notice of assignment of insurances and endorsement of the Security Agent’s interests. Each Borrower shall forthwith upon execution of the relevant Assignment of Insurances and the relevant Assignment of Re-insurances:
(a) execute a notice of assignment in the form required by the terms of the Assignment of Insurances and the Assignment of Re-insurances (or on a form agreed by Owner’s Insurance Brokers and insuring parties) and in accordance with normal market practice serve the same on all brokers, insurance companies, underwriters, protection and indemnity and/or war risks associations through whom any of the policies or entries relating to the Insurances are effected; and
(b) procure that the interests of the Security Agent in the Insurances and in the Re-insurances shall be endorsed upon all slips, cover notes, policies, certificates of entry and other instruments of insurance issued or to be issued in connection with the Insurances and the Re-insurances by means of the incorporation therein of the relevant loss payable clause required by the terms of the Assignment of Insurances and the Assignment of Re-insurances and the attachment thereto of the relevant notice of assignment referred to in paragraph (a) and/or by such other means and/or in such other form as is customary or appropriate in the insurance market in which the cover is placed and/or as the Security Agent shall otherwise reasonably require.
14.6 Letters of undertaking; Owner’s Insurance Broker Report. The Borrowers shall procure that the Owner’s Insurance Broker and any protection and indemnity or war risks association in which the Collateral Vessels may from time to time be entered shall deliver to the Security Agent a letter or letters of undertaking in such form as the Administrative Agent may reasonably require having regard to the then current market practice and the practices prescribed by the IGA or any successor association or body and/or the London Market Brokers’ Committee and/or any other professional association of which a Owner’s Insurance Broker is a member. The Owner’s Insurance Broker shall deliver to the Security Agent its broker’s report confirming that the Insurance requirements set forth in this Section 14 have been complied with and are sufficient to protect the interests of the Security Agent.
14.7 Deposit and production of insurance documents. The Borrowers shall procure that:
(a) Copies of all original slips, cover notes, policies, certificates of entry and other instruments of insurance issued from time to time in respect of the Insurances required herein which are effected through the Owner’s Insurance Broker shall forthwith be deposited with
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such Owner’s Insurance Broker and shall thereafter be held by such Owner’s Insurance Broker to the order of the Administrative Agent upon and subject to such terms as the Administrative Agent shall reasonably require having regard to the then current market practice;
(b) that, as soon as reasonably practicable upon the Administrative Agent’s request therefor, certified copies of the instruments of insurance referred to in paragraph (a) shall be produced to the Administrative Agent by the Owner’s Insurance Broker;
(c) that, forthwith upon the Administrative Agent’s request therefor, certified copies of all certificates of entry and policies relating to the Collateral Vessels’ entry with any protection and indemnity association or war risks association shall be produced to the Administrative Agent by such protection and indemnity and/or war risks association (as appropriate).
14.8 Payment of premiums and calls. The Borrowers shall punctually pay all premiums, calls, contributions or other sums payable in respect of the Insurances required herein and shall produce to the Administrative Agent all relevant receipts or other evidence of payment when so required by the Administrative Agent.
14.9 Waiver of broker’s lien. Where any of the Insurances effected through the Owner’s Insurance Broker form part of a fleet cover and such Owner’s Insurance Broker is or would be entitled to exercise rights of off-set or cancellation in relation to claims under the Insurances for non-payment of premiums in respect of other vessels covered by the same Insurances, the Borrowers shall procure (having regard to then current market practice including the practice prescribed by the London Market Brokers’ Committee and/or any other professional association of which the Owner’s Insurance Broker is a member) that such Owner’s Insurance Broker shall undertake to the Security Agent:
(a) not to exercise against the policy or against any claims in respect of the Collateral Vessels any lien or right of off-set for unpaid premiums in respect of vessels other than the Collateral Vessels covered under such fleet cover or for unpaid premiums in respect of any other such policies of insurance;
(b) not to cancel the Insurances by reason of the non-payment of premiums for vessels covered by such fleet cover;
or, in lieu of the undertakings referred to in paragraphs (a) and (b), to issue a separate policy of insurance in respect of the Collateral Vessel as and when the Administrative Agent may reasonably so require.
14.10 Renewal of Insurances. The Borrowers shall renew the Insurances (or relevant part thereof) before the relevant policies, contracts or entries expire and shall procure that the Owner’s Insurance Broker and/or the relevant protection and indemnity association or war risks association shall promptly confirm in writing to the Administrative Agent as and when each such renewal has been effected.
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14.11 Execution of guarantees. The Borrowers shall promptly arrange for the execution and delivery of such guarantees in respect of the Collateral Vessels as may from time to time be required by any protection and indemnity or war risks association in accordance with its rules or the terms of entry of the Collateral Vessels.
14.12 Information from brokers. The Borrowers shall procure that the Owner’s Insurance Broker and the managers of any protection and indemnity and/or war risks association with which a Collateral Vessel is entered shall give to the Administrative Agent such information as to the Insurances as the Administrative Agent may reasonably request, except any proprietary information, including marketing negotiations, which the Owner’s Insurance Broker is not allowed to provide.
14.13 Restriction on amendments to cover. The Borrowers shall not, without the prior consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), make any alteration (other than underwriter-mandated amendments or changes, in which case prompt notice thereof shall be provided to the Administrative Agent) to the terms of any of the Insurances which would or could reasonably be expected to have a material adverse effect on the rights or interests of the Security Agent nor shall the Borrowers take any action or omit to take any action or suffer any act or omission which would or would be likely to render any of the Insurances invalid, void, voidable, suspended, defeated or unenforceable or render any sum payable thereunder repayable in whole or in part (save and to the extent that replacement cover has been effected in accordance with this Section 14).
14.14 Restriction on settlement of claims. Subject to the rights of any charterer, the Borrowers shall not without the prior written consent of the Administrative Agent settle, compromise or abandon any claim under the Insurances for a Total Loss or a Major Casualty. If an Event of Default has occurred and is continuing, the Administrative Agent shall have the exclusive right to negotiate such claims.
14.15 Assistance by the Borrowers. The Borrowers undertake to do all things and provide all documents, evidence and information as may be necessary to enable the Security Agent to collect or recover any moneys which at any time become due in respect of the Insurances and for such purpose (but without limitation) the Borrowers shall permit the Security Agent if necessary to xxx in the Borrowers’ name.
14.16 Employment in conformity with insurance cover. The Borrowers will not at any time employ any Collateral Vessel or suffer it to be employed except in conformity with the terms of the Insurances (including any express or implied warranties) without first obtaining the consent to such employment of the insurers and complying with such requirements as to extra premium or otherwise as the insurers may prescribe and before allowing any Collateral Vessel to enter or trade to or operate in any zone which is declared a war zone by any government or by such Collateral Vessel’s war risks insurers or which is rendered dangerous by reason of hostility in any part of the world (whether war be declared or not) to effect such special insurance cover so as to ensure that the Collateral Vessel is fully insured against war risks in accordance with this Section 14 while in such zone.
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15 | VESSEL COVENANTS |
15.1 General. Each Borrower shall comply, or procure compliance, with the following provisions of this Section 15 at all times during the Security Period (after the Collateral Vessels have been delivered under the relevant Construction Contracts) and as provided in the Ship Mortgage except as the Administrative Agent may, with the authorization of the Majority Lenders, otherwise permit (which authorization shall not be unreasonably withheld or delayed with respect to Sections 15.5 and 15.6) provided that, during any period when the Collateral Vessels are employed on a demise charter, the charterer’s performance of corresponding obligations under the relevant demise charter shall discharge the obligations of the Borrowers under the following provisions of this Section 15 (but not otherwise).
15.2 Vessel registration. Subject to the provisions of Section 15.18, the Borrowers shall maintain the registration of the Collateral Vessels under the registry of the Republic of Liberia or another Approved Flag State and shall not do or omit to do anything or suffer any act or omission whereby such registration may be forfeited or imperiled.
15.3 Standard of maintenance. The Borrowers shall at all times keep the Collateral Vessels in good running order and repair, so that the Collateral Vessels shall be, insofar as due diligence can make them so, tight, staunch, strong and well and sufficiently tackled, appareled, furnished, equipped and in every respect seaworthy and will keep the Collateral Vessels, or cause them to be kept, in such condition as will entitle them to maintain their Classification, free of any requirement or recommendation affecting class which has not been complied with in accordance with its terms and so as to avoid adverse notation. The Borrowers shall comply with all legislation of the Flag State and all other legislation, regulations and requirements of any government, governmental agency or other regulatory authority (statutory or otherwise) from time to time applicable to the Collateral Vessels. The Borrowers shall procure that all appropriate repairs to or replacements of any damaged, worn out or lost parts or equipment are carried out (both as regards workmanship and quality of materials) so as not to diminish the Classification or (without prejudice to Section 13.8(g) above) materially diminish the value of the Collateral Vessels. The Borrowers will not change the Classification Society of any Collateral Vessel without the prior written consent of the Majority Lenders.
15.4 Removal of parts and equipment. No part or item of equipment which is legally and beneficially wholly-owned by the owner of the relevant Collateral Vessel and whose removal would materially reduce the value of a Collateral Vessel shall be permanently removed from any Collateral Vessel unless it is replaced promptly by a suitable part or item and the replacement part or item:
(a) is in the same or better condition than that part or item removed or enhances the value and/or earning capacity of the Collateral Vessels;
(b) is (or upon its installation on board the Collateral Vessels will become) legally and beneficially wholly owned by the owner of the relevant Collateral Vessel;
(c) is free from Security Interests other than Permitted Security Interests; and
(d) with effect from its installation on board a Collateral Vessel, is subject to the Security Interest constituted by the relevant Ship Mortgage.
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15.5 Restriction on modifications. The Borrowers shall not make any modifications to the Collateral Vessels or any part thereof which would or might materially and adversely alter the structure, type or performance characteristics of the Collateral Vessels or materially reduce their value.
15.6 Equipment belonging to third parties. The Borrowers shall not install on the Collateral Vessels any equipment belonging to a third party which cannot be removed without causing significant damage to the structure or fabric of the Collateral Vessels.
15.7 Survey. The Borrowers shall submit the Collateral Vessels to such periodical or other surveys as may be required for classification purposes and, if so required by the Administrative Agent, the Borrowers shall supply to the Administrative Agent copies of all survey reports in respect thereof.
15.8 Inspection. The Borrowers, at their risk and expense, shall permit surveyors or other Persons appointed by the Administrative Agent to board a Collateral Vessel at all reasonable times (but so as not to interfere with the ordinary operation of such Collateral Vessel) for the purpose of inspecting its condition, value and its class or other records or satisfying themselves as to repairs proposed or already carried out. The Borrowers, at their risk and expense, shall afford all proper and reasonable facilities for such inspections if reasonably required by the Administrative Agent.
15.9 Employment of Vessels. The Borrowers shall not knowingly or recklessly employ any Collateral Vessel or suffer its employment in any trade or business which is forbidden by any applicable law or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render it liable to condemnation in a prize court or to destruction, seizure or confiscation or that may expose a Collateral Vessel to penalties or sanctions.
15.10 Information. The Borrowers shall as promptly as reasonably practicable provide the Administrative Agent with all such information which the Administrative Agent may periodically and reasonably require regarding a Collateral Vessel, its employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for its employment or otherwise concerning the Collateral Vessels.
15.11 Payment of trading expenses and wages. The Borrowers shall promptly pay all tolls, dues and other material outgoings whatsoever in respect of the Collateral Vessels and the Insurances and keep accounts in respect thereof in accordance with their current practice. As and when the Administrative Agent may so reasonably require, the Borrowers shall make such accounts available for inspection on behalf of the Administrative Agent and shall provide evidence reasonably satisfactory to the Administrative Agent that the wages and allotments and the insurance and pension contributions of the master and crew are being regularly paid, that all deductions
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from crew’s wages in respect of any tax and/or social security liability are being properly accounted for and that the master has no claim for disbursements other than those incurred in the ordinary course of trading on the voyage (if any) then in progress or completed prior to such inspection.
15.12 Avoidance and discharge of other liens. The Borrowers shall in accordance with good shipping industry practice pay and discharge or cause to be paid and discharged all debts, damages and liabilities whatsoever which have given rise, or may give rise, to maritime, statutory or possessory liens on or claims enforceable against the Collateral Vessels except as set forth in this Section 15.12 and the applicable Ship Mortgage under the laws of all countries to whose jurisdiction the Collateral Vessels may from time to time be subject.
(a) Neither the Borrowers, any Approved Manager, any charterer, the master of each Collateral Vessel nor any other Person has or shall have any right, power or authority to create, incur or permit to be placed or imposed or continued upon the Vessel any Security Interest whatsoever other than the liens of the Ship Mortgages and Permitted Security Interests.
(b) The Borrowers will not create, incur, assume or suffer to exist any Security Interest on the Collateral Vessels other than the liens of the Ship Mortgages and Permitted Security Interests, and in due course and in any event within thirty (30) days (or seven (7) days after a request by the Security Agent to discharge such Security Interest) after the same becomes due and payable, the Borrowers will pay or cause to be discharged or make adequate provision for the satisfaction or discharge of all claims or demands (except to the extent that the same shall (i) concurrently be contested by the Borrowers in good faith by appropriate proceedings and shall not affect the continued release of the Collateral Vessels, or (ii) not be reasonably likely to have a Material Adverse Effect), or will cause the Collateral Vessels to be released or discharged from any Security Interest therefor.
(c) (i) If a libel, complaint, writ or warrant be filed against a Collateral Vessel or a Collateral Vessel be otherwise attached, arrested, levied upon or taken into custody under process or color of legal authority for any cause whatsoever, the Borrowers will promptly notify the Security Agent by facsimile, confirmed by letter, at its address, as specified in the applicable Ship Mortgage, and within thirty (30) days (or seven (7) days after a request by the Security Agent) will cause such Collateral Vessel to be released and all Security Interests thereon other than the applicable Ship Mortgage and any Permitted Security Interests to be discharged (except to the extent that the claim giving rise to such Security Interest shall concurrently be contested by the Borrowers in good faith by appropriate proceedings and shall not affect the release of the Collateral Vessel) and will promptly notify the Security Agent thereof in the manner aforesaid.
(ii) If the Borrowers shall fail or neglect to furnish proper security or otherwise to release a Collateral Vessel from libel, arrest, levy, seizure or attachment as set forth above, the Security Agent or any person acting on behalf of the Security Agent may furnish security to release such Collateral Vessel and by so doing shall not be deemed to cure the default of the Borrowers.
15.13 Notice of mortgage. The Borrowers will do everything necessary under the laws of any relevant jurisdiction for the purpose of perfecting and maintaining the relevant Ship Mortgage as a valid and enforceable mortgage and for preserving the priority of the relevant Ship Mortgage and, in particular (but without limitation), it will keep on board the Collateral Vessels each such document or record as may be required by law and cause such particulars relating to the relevant Ship Mortgage to be recorded as may be required by law.
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15.14 Notification of certain events. The Borrowers shall notify the Administrative Agent by fax promptly and in detail of:
(a) any casualty to any Collateral Vessel which is or is likely to be a Major Casualty;
(b) any occurrence in consequence whereof a Collateral Vessel has become or is likely to become a Total Loss;
(c) any requirement or recommendation made by its Classification Society or by any competent authority in respect of any Collateral Vessel which has not been complied with by the date by which it is required to be complied with (as extended by agreement with the Classification Society) other than any such requirement or recommendation the imposition of which is being contested in good faith by the Borrowers;
(d) any arrest or detention of a Collateral Vessel or the exercise or purported exercise of any lien on a Collateral Vessel; or
(e) a Collateral Vessel ceasing to be registered under the laws of its Flag State or anything which is done or omitted to be done whereby such registration is reasonably likely to be imperiled.
15.15 Restrictions on employment. The Borrowers shall not, and shall procure that no charterer shall, let or employ a Collateral Vessel:
(a) on demise charter (except an Internal Charter) for any period;
(b) on any time or consecutive voyage charter for a term which exceeds, or which by virtue of any optional extensions therein contained may exceed, twelve (12) months’ duration, but excluding any Satisfactory Drilling Contract or other drilling contract; or
(c) on terms which permit the charterer or operator to purchase a Collateral Vessel;
15.16 Management. The Borrowers shall not appoint any manager of any Collateral Vessel other than an Approved Manager and each Approved Manager so appointed by the Borrowers shall execute and deliver to the Administrative Agent a Manager’s Subordination Undertaking in relation to the Collateral Vessel before it commences management of the Collateral Vessel.
15.17 ISM Code compliance and ISPS Code compliance. The Borrowers shall comply or procure that any other relevant Person will comply, in all material respects, with the ISM Code and the ISPS Code (or any replacement thereof) in relation to the operation of the Collateral Vessels.
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15.18 Reflagging. The Borrowers shall not change the registration or flag of any Collateral Vessels from the registry of the Republic of Liberia or another Approved Flag State without the prior written consent of the Majority Lenders.
15.19 Chartering Other Vessels. The Borrowers will not charter in any drilling vessel or unit from any third party other than a wholly owned Subsidiary of the Guarantor.
15.20 Internal Charters. Prior to or concomitantly with the execution and delivery of any Internal Charter, the Borrowers will:
(a) deliver a copy of the duly executed Internal Charter and Assignment of Internal Charter to the Administrative Agent;
(b) cause the relevant Internal Charterer to execute and deliver to the Administrative Agent (i) an Assignment of Insurances by such Internal Charterer, (ii) an Assignment of Earnings by such Internal Charterer and (iii) an Account Control Agreement and an Assignment of Accounts relating to such Internal Charterer’s Earnings Accounts;
(c) deliver draft Uniform Commercial Code financing statements, company filings or similar instruments for filing in each appropriate jurisdiction;
(d) deliver to the Administrative Agent a favorable legal opinion of counsel to the Borrowers or Internal Charterer, in form and substance reasonably satisfactory to the Administrative Agent; and
(e) deliver to the Administrative Agent an Officer’s Certificate of such Internal Charterer certifying as to and attaching (x) copies of its constitutional documents and of the resolutions of the Board of Directors (or similar body) and if applicable, shareholder consents of such Internal Charterer approving each Transaction Document to which it is or is intended to be a party, (y) all other documents evidencing other necessary company action and governmental and other third party approvals and consents, if any, with respect to each Transaction Document to which it is or is intended to be a party, and (z) the names and true signatures of the officers of such Internal Charterer authorized to sign each Transaction Document to which it is or is intended to be a party.
16 | SECURITY COVER |
16.1 Provision of valuations. On the relevant Delivery Date and at the end of each calendar year thereafter (each such date, a “Certification Date”) each Borrower shall deliver to the Administrative Agent a certificate signed by its chief financial officer showing the Fair Market Value as at each such Certification Date and enclosing the original valuation reports (which shall not be dated later than thirty (30) days prior to the applicable Certification Date) on which the Fair Market Value is based. If a Default or an Event of Default has occurred and is continuing, the relevant Borrower shall deliver such reports promptly upon request by the Administrative Agent.
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16.2 Minimum required security cover. Without prejudice to the provisions of Section 13.8(g), Section 16.3 applies either upon the election of a Borrower or if the Administrative Agent notifies a Borrower that the relevant Fair Market Value is below the Fair Market Value required under Section 13.8(g) less any additional cash security previously provided under this Section 16 (the “Net Loan Amount”).
16.3 Provision of additional security; prepayment. If the Administrative Agent serves a notice on the Borrowers, or a Borrower otherwise elects under Section 16.2, the Borrowers shall, within ten (10) days after the date on which the Administrative Agent’s notice is served or if a Borrower has elected, within ten (10) days after the date on which the Administrative Agent has received notice thereof, either:
(a) provide, or procure that a third party provides, in favor of the Security Agent cash security (or other security acceptable to all the Lenders) at least equal to the shortfall and which is documented in such terms as the Administrative Agent may require; or
(b) prepay such part (at least) of the Loan as will eliminate the shortfall.
16.4 Vessel Fair Market Value. The Fair Market Value of the Collateral Vessels at any date will be the amount set forth in the most recent certificate delivered pursuant to Section 16.1 to the extent based on the valuation reports of the applicable Approved Brokers or, if the Borrowers shall fail to deliver such certificate as required pursuant to Section 16.1, then on the basis of appraisals obtained by the Administrative Agent, at the Borrowers’ cost, from the Approved Brokers in accordance with the Fair Market Value definition set forth in Section 13.8.
16.5 Provision of information. The Borrowers shall promptly provide the Administrative Agent and any broker acting under Section 13.8(g) with any information which the Administrative Agent or the broker may reasonably request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the broker or the Administrative Agent considers, in good faith, to be prudent.
16.6 Application of prepayment provisions. The provisions of Sections 8.13, 8.14, 8.15, 8.16 and 8.17 shall apply in relation to any prepayment pursuant to Section 16.3.
16.7 Release of additional security. If the Fair Market Value exceeds the required percentage of the Net Loan Amount, the Administrative Agent (if requested to do so by the Borrowers) shall instruct the Security Agent to, and the Security Agent shall, promptly release an amount of any additional cash security previously provided under this Section 16 equal to the excess provided no Default or Event of Default has occurred and is continuing.
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17 | PAYMENTS AND CALCULATIONS |
17.1 Currency and method of payments. All payments to be made by the Lenders or by the Borrowers or the Guarantor under a Finance Document shall be made to the Administrative Agent or to the Security Agent, in the case of an amount payable to it:
(a) by not later than 11.00 a.m. (New York City time) on the due date;
(b) in immediately available same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Administrative Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
(c) in the case of an amount payable by a Lender to the Administrative Agent or by the Borrowers to the Administrative Agent or any Lender, to the account of the Administrative Agent at BNY MELLON, New York SWIFT XXXXXX0X for DNB Bank ASA, New York Branch, SWIFT XXXXXX00 (Account: [—], PACIFIC SHARAV S.ÀR.L, Account No. [—] PACIFIC DRILLING VII LIMITED under reference “Attention: Xxxx Xxxxxxx”), or to such other account with such other bank as the Administrative Agent may from time to time notify to the Borrowers and the other Finance Parties; and
(d) in the case of an amount payable to the Security Agent, to such account as it may from time to time notify to the Borrowers and the other Finance Parties.
17.2 Payment on non-Business Day. If any payment by the Obligors under a Finance Document would otherwise fall due on a day which is not a Business Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
17.3 Basis for calculation of periodic payments. All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a three hundred sixty (360) day year, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent, or when so provided specifically herein by a Lender, of an interest rate or other amount hereunder shall be conclusive and binding for all purposes, absent manifest error.
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17.4 Distribution of payments to Finance Parties. Subject to Sections 17.5, 17.6 and 17.7:
(a) any amount received by the Administrative Agent under a Finance Document for distribution or remittance to a Lender or the Security Agent shall be made available by the Administrative Agent to that Lender or, as the case may be, the Security Agent by payment, with funds having the same value as the funds received, to such account as that Lender or the Security Agent may have notified to the Administrative Agent not less than three (3) Business Days previously; and
(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Administrative Agent to each Lender pro rata to the amount in that category which is due to it.
17.5 Permitted deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Administrative Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Administrative Agent from that Lender under any Finance Document or any sum which the Administrative Agent is then entitled under any Finance Document to require that Lender to pay on demand.
17.6 Agent only obliged to pay when monies received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Administrative Agent shall not be obliged to make available to the Borrowers or any Lender any sum which the Administrative Agent is expecting to receive for remittance or distribution to the Borrowers or that Lender until the Administrative Agent has satisfied itself that it has received that sum.
17.7 Refund to Agent of monies not received. If and to the extent that the Administrative Agent makes available a sum to the Borrowers or a Lender, without first having received that sum, the Obligors or (as the case may be) the Lender concerned shall, on demand:
(a) refund the sum in full to the Administrative Agent; and
(b) pay to the Administrative Agent the amount (as certified by the Administrative Agent) which will indemnify the Administrative Agent against any funding or other loss, liability or expense incurred by the Administrative Agent as a result of making the sum available before receiving it.
17.8 Agent may assume receipt. Section 17.7 shall not affect any claim which the Administrative Agent has under the law of restitution, and applies irrespective of whether the Administrative Agent had any form of notice that it had not received the sum which it made available.
17.9 Finance Party accounts. Each Finance Party shall maintain accounts showing the amounts owing to it by the Obligors under the Finance Documents and all payments in respect of those amounts made by the Obligors.
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17.10 Accounts prima facie evidence. If any accounts maintained under Sections 17.9 show an amount to be owing by the Obligors to a Finance Party, those accounts shall be prima facie evidence that that amount is owing to that Finance Party.
17.11 Evidence of amounts claimed. Any certificate or determination of the Administrative Agent, the Security Agent or any Lender as to any rate of interest or any other amount payable to it pursuant to and for the purposes of any of the Finance Documents shall substantiate in reasonably sufficient detail the interest or other amount concerned and, subject thereto, shall, in the absence of manifest error, be conclusive and binding on the Borrowers and (in the case of a certificate or determination of the Administrative Agent or the Security Agent) on the other Finance Parties. The Administrative Agent or, as the case may be, the other Finance Party concerned shall, promptly upon the request of the Borrowers, send to the Borrowers such details as may reasonably be required by the Borrowers setting out the manner in which any rate or amount has been determined, together with such documents and calculations as may reasonably be required by the Borrowers in order to verify the same.
18 | APPLICATION OF RECEIPTS |
18.1 Order of application. Following an Event of Default, all moneys and proceeds of any enforcement and any sums which are received or recovered by any Finance Party under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable under any Finance Document in the following order (and in relation to any payments under paragraphs (iii), (iv) or (v) below, pro rata between the GIEK Facility Lender and the Commercial Facility Lenders and the Hedging Banks by reference to the amounts owing to them under the GIEK Facility Loan, the Commercial Facility Loan and the Hedging Agreements, respectively):
(i) first, in or towards satisfaction of all amounts (including, without limitation, any costs and expenses) then due and payable by the Obligors to the Administrative Agent and the Security Agent under any Finance Document;
(ii) secondly, in or towards satisfaction of all amounts (including, without limitation, any costs and expenses and any sums payable by the Borrowers under Section 21) then due and payable by the Obligors under the Finance Documents other than those amounts referred to at paragraphs (i), (iii), (iv) and (v);
(iii) thirdly, in or towards satisfaction of any and all amounts of default interest payable by the Borrowers under this Agreement other than those amounts referred to at paragraph (i);
(iv) fourthly, in or towards satisfaction pro rata of any and all amounts of interest payable by the Borrowers under this Agreement and sums payable by the Borrowers under Sections 23 and 25 other than those amounts referred to at paragraph (i); and
(v) fifthly, in or towards repayment of the outstanding principal of the Loan and all amounts due and payable by the Borrowers under the Hedging Agreements;
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(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Administrative Agent, by notice to the Obligors and the other Finance Parties, states in its reasonable opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Section 18.1(a); and
(c) THIRDLY: any surplus shall be paid to the Borrowers or to any other Person appearing to be entitled to it.
19 | EARNINGS ACCOUNTS; GROUP CORPORATE ACCOUNTS |
19.1 Earnings Accounts. Each Borrower and if applicable, each Internal Charterer, shall open and maintain for the duration of this Agreement an Earnings Account in its name with the Account Bank and shall procure that all bank accounts of the Obligors relating to the Collateral Vessels (excluding any Guarantor accounts not directly related to the Collateral Vessels) shall be maintained with the Account Bank. The Earnings Accounts shall be further governed by the Assignment of Accounts and the Account Control Agreements.
19.2 Payment of Earnings. The Borrowers shall ensure that, throughout the Security Period, all Earnings are paid to the Earnings Account.
19.3 Group Corporate Accounts. The Group shall also maintain the Group Corporate Accounts described in Section 13.8(f).
19.4 Accounts. The Borrowers shall use commercially reasonable efforts to ensure no Earnings are paid to any Person other than the relevant Borrower or Internal Charterer or credited to any account other than the Earnings Accounts of the relevant Borrower or Internal Charterer. No Earnings shall be credited to any account held by the Guarantor, unless the Guarantor shall have opened and maintained for the duration of this Agreement an Earnings Account in its name with the Account Bank subject to an Assignment of Accounts and an Account Control Agreement; provided that for the avoidance of doubt, so long as no Event of Default has occurred and is continuing, the Borrowers may distribute any Earnings to other members of the Group, including the Guarantor, following receipt of such Earnings in an Earnings Account.
20 | EVENTS OF DEFAULT |
20.1 Events of Default. An Event of Default occurs if any of the following events shall occur and be continuing:
(a) any Obligor does not pay within three (3) Business Days of the due date any amount payable by it under any Finance Document at the place and in the currency in which it is expressed to be payable or, in the case of amounts due on demand, within seven (7) Business Days of receipt of the relevant demand; or
(b) any representation or warranty made or repeated by any Obligor in any Finance Document or in any certificate, statement or opinion delivered by or on behalf of any Obligor thereunder or in connection therewith is incorrect in a material respect when made or repeated; or
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(c) any Obligor, Approved Manager, Internal Charterer or the Pledgor fails to comply with, perform or observe any other term, covenant, agreement or provision of any Finance Document, and such failure is capable of being cured but continues unremedied for a period of thirty (30) days from the earlier of (A) receipt by the Obligor of written notice thereof from the Administrative Agent and (B) the date such Obligor first becomes aware (actually or constructively) of such failure; or
(d) the Borrowers shall fail to comply with Section 14.2 of this Agreement respecting the Insurance requirements set forth therein; or
(e) at any time:
(i) any Indebtedness of any Obligor or any of its Subsidiaries (other than intra-Group Indebtedness) is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described);
(ii) any creditor of any Obligor or any of its Subsidiaries (other than for intra-Group Indebtedness) becomes entitled to declare any Indebtedness of such Obligor due and payable prior to its specified maturity as a result of an event of default (however described) resulting from (i) the failure by such Obligor or Subsidiary to make a payment when due nor within any originally applicable grace period or (ii) the breach of any financial ratio covenant (other than covenants based on a calculation of net worth or fair market value); or
(iii) any amount is demanded of, but not paid when due and remains unpaid by, any Obligor or any of its Subsidiaries under any guarantee in respect of Indebtedness (other than intra-Group Indebtedness and Indebtedness referred to in paragraphs (e)(i) through (ii) above);
No Event of Default shall occur under this Section 20.1(e) if the aggregate amount of Indebtedness falling within paragraphs (i) to (iii) is less than $25,000,000 singly or in the aggregate (or the equivalent thereof in another currency or currencies), or;
(f) (i) any Obligor shall commence any case, proceeding or other action without the prior written consent of the Majority Lenders (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or any Obligor shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Obligor any case, proceeding or other action of a nature referred to in Section (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against any Obligor Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) any Obligor shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the
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acts set forth in Section (i), (ii) or (iii) above; (v) any Obligor shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) any Obligor shall not be Solvent; or
(g) anything analogous to or having a substantially similar effect to any of the events specified in paragraph (f) of this Section 20.1 shall occur in relation to an Obligor or its Subsidiaries under the laws of any applicable jurisdiction; or
(h) any dissolution, termination or cessation of the business of any Obligor, any Subsidiary of a Borrower, any Approved Manager, any Internal Charterer or the Pledgor; or
(i) at any time it becomes unlawful or impossible for any Finance Party to exercise any of its respective material rights under any of the Finance Documents and (unless in the reasonable opinion of the Administrative Agent any such impossibility or unlawfulness is incapable of rectification or remedy) the Borrowers or the relevant Obligor (with due cooperation from each Finance Party) shall have failed to procure within five (5) days of notice from the Administrative Agent to do so that the foregoing is no longer impossible or unlawful; or
(j) at any time after the relevant Delivery Date, any Ship Mortgage is not or ceases to be legal and valid perfected security over the applicable Collateral Vessel with first priority or the Security Interest created by or granted under any other Security Document, or intended to be granted or created thereby, is not or shall fail or cease to constitute a valid, fully perfected and enforceable first priority security interest, subject to no prior Security Interest (other than Permitted Security Interests) in any Collateral; or
(k) any part of the Guarantor’s or the Borrowers’, business or assets is destroyed, abandoned, seized, appropriated or forfeited for any reason provided, in the reasonable opinion of the Administrative Agent, that such occurrence is likely to have a Material Adverse Effect; or
(l) there shall occur and be continuing an “Event of Default” as defined in any Ship Mortgage; or
(m) A change in law, rule or regulation shall have occurred that makes it unlawful or impossible for any Obligor, Approved Manager or Internal Charterer or the Pledgor to perform or observe any of its respective obligations under any Transaction Document; or
(n) a Material Litigation shall have occurred and be continuing (for purposes of this Section 20.1(n), “Material Litigation” means any legal proceedings against any Obligor or its Subsidiary that (x) is respecting a claim that is not covered by insurance, (y) has a reasonable possibility of adverse determination, and (z) if adversely determined, is reasonably likely to result in a Material Adverse Effect); or
(o) an Environmental Action that has, or may reasonably be expected to have, a Material Adverse Effect shall have occurred and is continuing unabated for forty-five (45) days following Borrowers’ discovery or knowledge (whether actual or constructive) of the Environmental Action; or
(p) any Obligor or any of its Subsidiaries shall fail to satisfy within sixty (60) days after the later of (y) entry thereof and (z) the termination of the most recent stay, final judgment rendered against such Obligor or such Subsidiary by any court of competent jurisdiction where the judgment represent an uninsured loss in excess of $25,000,000, singly or in the aggregate (or the equivalent thereof in another currency or currencies); or
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(q) any Transaction Document shall cease to be in full force and effect (other than in accordance with its terms), or shall be determined by any court to be void, voidable or unenforceable, or any Obligor, Approved Manager or Internal Charterer or the Pledgor shall rescind, revoke or repudiate or threaten to repudiate any of its obligations under any Transaction Document; or
(r) any Construction Contract shall cease to be in full force and effect (other than in accordance with its terms), or shall be determined by any court to be void, voidable or unenforceable, or any party to any Satisfactory Drilling Contract or Construction Contract shall rescind, revoke or repudiate any of its obligations under any such Satisfactory Drilling Contract or Construction Contract; or
(s) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
20.2 Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default which is continuing:
(a) If such event is an Event of Default specified in clause (f) or (g) above, automatically the Commitments shall terminate and all other obligations of each Lender to the Borrowers under this Agreement are terminated, and the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand;
(b) the Administrative Agent, if so instructed by the Majority Lenders, shall:
(i) serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are terminated; and/or
(ii) serve on the Borrowers a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Administrative Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
(c) the Security Agent, if so instructed by the Administrative Agent (who shall give such instructions if instructed to do so by the Majority Lenders), shall take any action which, as a result of the Event of Default or any notice served under paragraph (b) (i) or (ii), the Security Agent, is entitled to take under any Finance Document or any applicable law. Except as expressly provided above in this Section 20, presentment, demand, protest and all other notices of any kind are hereby expressly waived.
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20.3 Termination of Commitments. On the service of a notice under Section 20.2(b)(i), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall terminate.
20.4 Acceleration of Loan. On the service of a notice under Section 20.2(b)(ii), the Loan, all accrued interest and all other amounts accrued or owing from any Obligor under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
20.5 Multiple notices; action without notice. The Administrative Agent may serve notices under Sections 20.2(b)(i) or (ii) simultaneously or on different dates and it and/or the Security Agent may take any action referred to in Section 20.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
20.6 Notification of Finance Parties and Obligor. The Administrative Agent shall send to GIEK, each Lender, the Security Agent and each Obligor a copy or the text of any notice which the Administrative Agent serves on the Borrowers under Section 20.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Administrative Agent to send a copy or the text of the notice to any other Person shall invalidate the notice or provide any Obligor with any form of claim or defense.
20.7 Lender’s rights unimpaired. Nothing in this Section 20 shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Section is without prejudice to Section 3.2.
20.8 Exclusion of Finance Party liability. No Finance Party, and no receiver, manager or delegate appointed by the Security Agent, shall have any liability to any Obligor:
(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realized from any asset comprised in such a Security Interest or for-any reduction (however caused) in the value of such an asset;
except that this does not exempt a Finance Party or a receiver, manager or delegate from liability for losses shown to have been directly and mainly caused by the gross negligence or the willful misconduct of such Finance Party’s own officers and employees or (as the case may be) such receiver’s, manager’s or delegate’s own partners or employees.
In no event shall any Finance Party be liable on any theory of liability for any special, indirect, consequential or punitive damages and each Obligor hereby waives, releases and agrees not to xxx upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
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21 | FEES AND EXPENSES |
21.1 Arrangement, commitment, agency fees. The Borrowers shall pay to the Administrative Agent:
(a) for the account of the Commercial Facility Lenders, a commitment fee (the “Commercial Facility Commitment Fee”) equal to 40% per annum of the Commercial Facility Loan Margin, which shall accrue from the Signing Date until the end of the Availability Period. Such fees shall be calculated on the unutilized Commercial Facility Loan Commitment of each Commercial Facility Lender and shall be due and payable to the Administrative Agent, quarterly in arrears, which the Administrative Agent shall distribute among the Commercial Facility Lenders, upon receipt;
(b) for the account of the GIEK Facility Lender, a commitment fee (the “GIEK Facility Commitment Fee”) equal to 40% per annum of the GIEK Facility Loan Margin, which shall accrue from the Signing Date until the end of the Availability Period. Such fee shall be calculated on the unutilized GIEK Facility Loan Commitment and shall be due and payable to the Administrative Agent quarterly in arrears, which the Administrative Agent shall transfer to the GIEK Facility Lender upon receipt;
(c) for the account of GIEK, a commitment fee (the “GIEK Commitment Fee”) equal to 40% per annum of the GIEK Facility Premium, which shall accrue from the Signing Date until the end of the Availability Period. Such fee shall be due and payable to the Administrative Agent, on the Signing Date, and quarterly in arrears thereafter until termination of this Agreement, which the Administrative Agent shall transfer to the GIEK upon receipt;
(d) on the date of the initial Advance in such amounts and on each anniversary thereof during the Security Period, a non-refundable annual agency fee payable to the Administrative Agent in an amount it agrees with the Borrowers annually;
(e) a non-refundable flat participation fee (the “Commercial Facility Participation Fee”), which fee is deemed earned on the Signing Date, and is due and payable to the Commercial Facility Lenders, thirty (30) days after the Signing Date or, if earlier, on the date of the initial Advance in such amounts and shares as has been agreed in the Fee Letter with PDSA, Citibank and DNB;
(f) a non-refundable participation fee (the “GIEK Participation Fee”) equal to 1.25% of the GIEK Facility Loan Commitment, which is due and payable to GIEK on the date of payment of the participation fee due to the Commercial Facility Lenders according to sub-clause (e) above;
(g) for the account of GIEK and for transfer by the Administrative Agent to the GIEK Account (marked with the guarantee number), a guarantee fee (the “GIEK Facility Premium”) payable on the date of each principal installment to be paid pursuant to Section 8.1 at the rate of 2.00% per annum calculated on the GIEK Facility Loan for the period of the issue of each GIEK Guarantee until its expiry date;
(h) the Arrangement and Structuring Fee in such amounts and shares as has been agreed in the Fee Letter with PDSA, Citibank and DNB; and
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(i) in the event that after the Signing Date, the Commercial Facility Loan Margin is increased or the definition of LIBOR is changed in a manner that increases the amount of interest payable on the Commercial Loan, then automatically, the GIEK Facility Premium shall be increased in a proportionate amount by reference to the amount of such premium as of the Signing Date.
21.2 Costs of negotiation, preparation etc. The Borrowers shall pay to the Administrative Agent and the Mandated Lead Arrangers on their demand the amount of all reasonable documented out-of-pocket expenses (including legal fees) incurred by the Administrative Agent, the Security Agent, GIEK and the GIEK Facility Lender in connection with the negotiation, preparation, execution, syndication or registration of any Finance Document, any Transaction Document or any related document or with any transaction contemplated by a Finance Document or a related document (subject to any cap separately agreed in respect thereof), including any Finance Document executed after the date of this Agreement.
21.3 Costs of variations, amendments, enforcement etc. The Borrowers shall pay to the Administrative Agent, on the Administrative Agent’s demand, for the account of the Finance Party concerned:
(a) the amount of all reasonable, documented, out-of-pocket expenses incurred by the Administrative Agent and the Security Agent in connection with any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
(b) the amount of all reasonable, documented, out-of-pocket expenses incurred by the Administrative Agent and the Security Agent in connection with any consent or waiver by the Administrative Agent, the Security Agent, the Lenders or the Majority Lenders under or in connection with a Finance Document, or any request for such a consent or waiver; or
(c) the amount of all expenses incurred by any Finance Party in connection with any step taken by the Finance Party to protect, exercise or enforce any right or Security Interest created by a Finance Document or for any similar purpose.
There shall be recoverable under paragraph (c) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
21.4 Extraordinary management time. If an Event of Default or Default shall have occurred or if the Security Agent finds it expedient or necessary or is requested by the Borrowers to undertake duties which the Borrowers agree to be of an exceptional nature or which are otherwise outside the scope of the Security Agent’s normal duties, the Borrowers will pay such additional remuneration as the Security Agent and Borrowers may agree, or failing agreement as determined by an investment bank (acting as an expert) selected by the Security Agent and approved by the Borrowers. The expense involved in such nomination and such investment bank’s fee will be borne by the Borrowers. The determination of such investment bank will be conclusive and binding on the Security Agent and the Borrowers.
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21.5 Defaulting Lender’s Fees. Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Section 21.1 (without prejudice to the rights of the Non-Defaulting Lenders in respect of such fees).
22 | INDEMNITIES |
22.1 Indemnities regarding borrowing and repayment of Loan. The Borrowers shall fully indemnify the Administrative Agent and each Lender on the Administrative Agent’s demand and the Security Agent on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Finance Party, or which that Finance Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
(a) any Advance not being borrowed on the date specified in the Drawdown Notice for it for any reason other than a default by the Lender claiming the indemnity;
(b) any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Section 7);
(c) any breach of representation and warranty set forth in Section 11.11; or
(d) the occurrence and/or continuance of an Event of Default or a Default and/or the acceleration of repayment of the Loan under Section 20.
22.2 Environmental indemnity. The Borrowers shall fully indemnify each Finance Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Finance Party, in any country, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law other than claims, expenses, liabilities and losses which are shown to have been caused by the gross negligence or willful misconduct of the officers or employees of the Finance Party concerned.
22.3 General Indemnity. Without limitation of the foregoing provisions of this Section 22, the Borrowers agree to indemnify, defend and save and hold harmless the Administrative Agent, the Security Agent, each Lender and each other Finance Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the transaction contemplated by the Pertinent Documents (the “Transaction”), the Loan, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated thereby, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct, (ii) the actual or alleged presence of Hazardous Materials on any real property of any Obligor or any of its Subsidiaries or any Environmental
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Action relating in any way to any Obligor or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct or (iii) the investigation by the Administrative Agent of any event which the Administrative Agent reasonably believes is an Event of Default or Default or, actions taken by the Administrative Agent acting or relying on any notice, request or instruction which the Administrative Agent reasonably believes to be genuine, correct and appropriately authorized. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 22 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Obligor, its directors, shareholders or creditors or an Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto. Each Borrower also agrees and will ensure that neither it nor any of its Subsidiaries will assert any claim against the Administrative Agent, the Security Agent, any Lender, any other Finance Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated by the Pertinent Documents. This Section 22.3 shall not apply with respect to Taxes, which shall be governed solely by Section 23.
22.4 Currency indemnity. If any sum due from any Obligor to a Finance Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of:
(a) making or lodging any claim or proof against any Obligor, whether in its liquidation, any arrangement involving it or otherwise; or
(b) obtaining an order or judgment from any court or other tribunal; or
(c) enforcing any such order or judgment;
the Borrowers shall indemnify the Finance Party concerned against the loss arising when the amount of the payment actually received by that Finance Party is converted at the available rate of exchange into the Contractual Currency.
In this Section 22.4, the “available rate of exchange” means the rate at which the Finance Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Section 22.4 creates a separate liability of the Borrowers which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
22.5 Sums deemed due to a Lender. For the purposes of this Section 22, a sum payable by the Borrowers to the Administrative Agent or the Security Agent for distribution to a Lender shall be treated as a sum due to that Lender.
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23 | NO SET-OFF OR WITHHOLDING; TAX INDEMNITIES |
23.1 All amounts payable by or on account of any obligation of any Obligor under the Finance Documents shall be paid without set-off or counterclaim and free and clear of, and without deduction or withholding on account of, any Taxes, monetary transfer fees or other charges or withholdings of any nature, except to the extent that deduction or withholding of any Tax is required by law, in which event the Obligor:
(a) shall notify the Administrative Agent of such requirement;
(b) shall make such deduction or withholding;
(c) except to the extent that the Tax required to be deducted or withheld is a Tax described in Section 23.4, shall pay such additional amount as is necessary so that the Finance Party to whom (or for whose account) such amount is payable receives, after such deduction or withholding (including any deduction or withholding with respect to such additional amount, except to the extent that the Tax required to be deducted or withheld from such additional amount is a Tax described in Section 23.4, an amount equal to the amount that it would have received if such deduction or withholding had not been made;
(d) shall pay the full amount deducted or withheld to the appropriate Taxing Authority in accordance with applicable law; and
(e) shall deliver to the Administrative Agent promptly after making such payment an original receipt (or certified copy thereof) or other evidence satisfactory to the affected Finance Party evidencing payment of the Tax to the appropriate Taxing Authority.
23.2 The Borrowers shall pay when due all recording, registration, filing, stamp, court, documentary, intangible, transfer and other similar Taxes imposed on or with respect to any Finance Document (other than any such Taxes imposed as a result of (a) a Lender’s transfer of its rights and obligations under this Agreement to a Transferee Lender, (b) a Lender’s change in its Lending Office or (c) any voluntary registration by a Lender of any Finance Document, in the case of clauses (a) and (b) above other than a transfer or change that occurs at the request of an Obligor or pursuant to Section 23.10, 24.5 or 25.8 or while an Event of Default is continuing) and shall, on the Administrative Agent’s demand, fully indemnify each Finance Party against any costs, claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay any such Tax.
23.3 Except as provided in Section 23.4, the Borrowers shall pay when due, and shall indemnify each Finance Party within ten (10) days after written demand for, all Taxes paid or incurred by, or asserted against, any Finance Party arising from or with respect to or otherwise relating to any Finance Document or any of the transactions pursuant to or contemplated in, or permitted by, the Finance Documents or any payment by or on account of any obligation of any Obligor under any Finance Document and any reasonable expenses arising therefrom or with respect thereto. A certificate of any Finance Party setting forth an amount or amounts payable by any Obligor under this Section 23 shall be prima facie evidence thereof absent manifest error.
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23.4 The Borrowers shall have no obligation to pay additional amounts under Section 23.1 or to indemnify any Finance Party under Section 23.3 for any of the following Taxes:
(a) Taxes imposed on or calculated by reference to the net income, profits or gain (however denominated), franchise Taxes, branch profits Taxes and net wealth Taxes imposed:
(i) under the law of the jurisdiction (or any political subdivision thereof) in which such Finance Party is incorporated or, if different, a jurisdiction (or any political subdivision thereof) in which such Finance Party is treated as resident for tax purposes or otherwise has a present or former connection (other than solely by reason of such Finance Party’s having executed, delivered, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, enforced or sold or assigned an interest in any Advance or any Finance Document); or
(ii) under the law of the jurisdiction in which such Finance Party’s Lending Office is located in respect of amounts received or receivable in such jurisdiction; or
(b) any withholding Tax that would not be required to be deducted or withheld but for a breach by such Finance Party of its obligations under Section 23.7;
(c) in the case of a Transferee Lender, any Tax to the extent excluded from the Borrowers’ indemnity obligations by the last sentence of Section 29.2; and
(d) in the case of a Lender that changes its Lending Office, any Tax to the extent excluded from the Borrowers’ indemnity obligations by the next-to last sentence of Section 29.14.
23.5 (a) All amounts expressed to be payable by any Obligor under any Finance Document to a Finance Party are exclusive of VAT. If any VAT is chargeable on any supply made by any Finance Party to any Obligor in connection with a Finance Document and such Finance Party is required to account to the relevant Taxing Authority for the VAT, that Obligor shall pay to the Finance Party concerned (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT.
(b) If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(i) (where the Supplier is the person required to account to the relevant Taxing Authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT, and the Recipient must promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant Taxing Authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
(ii) (where the Recipient is the person required to account to the relevant Tax Authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant Taxing Authority in respect of that VAT.
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(c) Where a Finance Document requires any Obligor to reimburse a Finance Party for any costs or expenses, that Obligor shall also at the same time pay and indemnify the Finance Party concerned against all VAT incurred by the Finance Party concerned in respect of the costs or expenses, except to the extent that such Finance Party determines in good faith that it is entitled to a tax credit with respect to, or a refund of, such VAT from the relevant Taxing Authority.
(d) Any reference in this Section 23.5 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the relevant legislation of any jurisdiction having implemented Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112)).
23.6 Without prejudice to the survival of any other agreement or obligation of any Obligor under the Finance Documents, the agreements and obligations of the Obligors contained in Section 22 and this Section 23 shall survive the termination of this Agreement and the payment in full of principal and interest under this Agreement.
23.7 Each Finance Party will deliver to any Obligor, after receipt of the Obligor’s reasonable written request, any certificate or other document regarding such Finance Party’s domicile, tax residence or connection (or absence of a connection) with a jurisdiction imposing a withholding Tax and required by the law of such jurisdiction as a condition to exemption from or reduction of such withholding Tax, provided that (i) the Obligor gives such Finance Party a copy of any prescribed or recommended form of, and instructions for completion of, such document, in each case in English, (ii) such Finance Party is eligible to provide such document without any liability, loss, cost, expense or adverse consequence to it, and (iii) in the case of a document that must be executed or endorsed or authenticated by a Government Entity, any failure of such Finance Party to receive such document from the Government Entity within a reasonable time shall not be deemed to be a failure to provide such document so long as such Finance Party is using commercially reasonable efforts to obtain such document.
23.8 If any Finance Party determines, in its sole discretion, exercised in good faith, that it has received a refund of, or a reduction in its current liability for a Tax described in Section 23.4(a) by reason of a tax credit for, any Tax for which any Obligor has paid an indemnity to such Finance Party pursuant to this Section 23 or for which any Obligor has paid such Finance Party an additional amount pursuant to Section 23.1(c), then except to the extent that such refund or tax credit was previously taken into account to compute the amount of any indemnity or additional amount payable by any Obligor under this Section 23, such Finance Party shall pay to such Obligor an amount equal to such refund or tax credit (but only to the extent of the indemnity payment or additional amount previously paid by the Obligor to such Finance Party under this Section 23 with respect to such indemnified Tax), net of all reasonable, documented out-of-pocket expenses of such Finance Party, and without interest (other than any interest received from the relevant Government Entity or other Taxing Authority with respect to such refund); provided, however, that:
(a) in no event will such Finance Party be required to pay any amount to an Obligor pursuant to this Section 23.8 the payment of which would place such Finance Party in a less favorable net after-Tax position than such Finance Party would have been in if the Tax for which the indemnity or additional amount was paid had not been incurred or withheld;
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(b) if at such time an Event of Default shall have occurred and be continuing or the Obligors shall not have paid all amounts then due and payable under the Finance Documents, such Finance Party shall have no obligation to pay such amount to such Obligor unless and until no Event of Default exists and the Obligors have paid all amounts then due and payable under the Finance Documents; and
(c) the Obligor, upon the request of such Finance Party, accompanied by a written explanation setting forth in reasonable detail the basis therefor, shall repay such amount (plus any penalties, interest or other charges imposed by the relevant Government Entity or other Taxing Authority) to the Finance Party in the event the Finance Party is required to repay such refund or credit to such Government Entity or Taxing Authority.
23.9 FATCA.
(a) Without prejudice to the rights of the Finance Parties under Section 23, the Borrowers, the Guarantor and each Finance Party agree to treat this Agreement as a “grandfathered obligation” within the meaning of Treasury Regulations Section 1.1471-2(b)(2) unless otherwise required (i) by a Change in Law, (ii) as a result of a “material modification” (as that term is used in Treasury Regulations Section 1.1471-2(b)(2)(iii)) to the Agreement, or (iii) pursuant to a final determination, within the meaning of Section 1313 of the Code.
(b) If a payment made by a Borrower or a Guarantor to a Finance Party under this Agreement or any other Finance Document could reasonably be expected to become subject to U.S. federal withholding Tax imposed by FATCA or in any other circumstances information is required under FATCA with respect to this Agreement, including any obligations imposed on such Person pursuant to an applicable agreement between the United States and a relevant jurisdiction, the Borrowers, the Guarantor and each Finance Party shall use commercially reasonable efforts to provide such assistance as is reasonably requested by the Administrative Agent or such other Finance Party to obtain such information and documentation as may be required at such time to evidence that such Person has complied with its obligations under FATCA, including any obligations imposed on such Person pursuant to an applicable agreement between the United States and a relevant jurisdiction. In addition, the Borrowers, Guarantor and each Finance Party agree that if this Agreement becomes, or could reasonably be expected to become, subject to FATCA, each such Person will enter into negotiations in good faith with a view to agreeing to such amendments to this Agreement as are consistent with then current market practice relating to FATCA.
(c) For purposes of this Section 23.9, (i) “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty or interpretation thereof by a Governmental Entity or (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Entity, and (ii) “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
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23.10 Mitigation. If circumstances arise which would result in liability to the Obligors to a Lender under this Section 23 then, if requested by an Obligor in writing and without in any way limiting the rights of the applicable Lender under this Section 23, the applicable Lender shall use reasonable endeavors to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the applicable Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:
(a) have an adverse effect on its business, operations or financial condition; or
(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any non-de-minimis expense (unless indemnified to its satisfaction) or subject it to any non-de-minimis Taxes (unless indemnified to its satisfaction).
24 | ILLEGALITY, ETC |
24.1 Illegality. This Section 24.1 applies if it has become, or will with effect from a specified date, become unlawful or prohibited as a result of the introduction after the date of this Agreement of a new law or regulation, an amendment after the date of this Agreement to an existing law or regulation or a change after the date of this Agreement in the manner in which an existing law or regulation is or will be interpreted or applied by a court of competent jurisdiction for a Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement and that Lender (the “Notifying Lender”) notifies the Administrative Agent that such is the case.
24.2 Notification of illegality. The Administrative Agent shall promptly notify the Obligors, the Security Agent and the other Lenders of the notice under Section 24.1 which the Administrative Agent receives from the Notifying Lender.
24.3 Prepayment; Alternative Interest Rate. Following the Administrative Agent notifying the Borrowers under Section 24.2, or, if later, on the date specified in the Notifying Lender’s notice under Section 24.1 as the date on which the notified event would become effective, the Borrowers shall have the option (a) to maintain the Notifying Lender’s Loans and pay interest thereafter based on an alternative calculation method to be reasonably determined by the Notifying Lender or (b) at any time thereafter, to prepay the Notifying Lender’s Contribution together with accrued interest thereon at the applicable rate.
24.4 Application of prepayment provisions. The provisions of Sections 8.14 and 8.17 shall apply in relation to any prepayment pursuant to Section 24.3. For the avoidance of doubt, Section 8.13 shall not apply.
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24.5 Mitigation. If circumstances arise which would result in a notification under Section 24.1 then, if requested by an Obligor in writing and without in any way limiting the rights of the Notifying Lender under Section 24.3, the Notifying Lender shall use reasonable endeavors to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:
(a) have an adverse effect on its business, operations or financial condition; or
(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any non-de-minimis expense (unless indemnified to its satisfaction) or subject it to any non-de-minimis Taxes (unless indemnified to its satisfaction).
25 | INCREASED COSTS |
25.1 Increased costs. This Section 25 applies if a Lender (the “Notifying Lender”) notifies the Administrative Agent that as a result of:
(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied; or
(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
the Notifying Lender (or a parent company of it) has incurred or will incur an “increased cost”. Such notice shall set forth the basis of computation of the increased cost in reasonable detail but need not include any matters which the Notifying Lender regards as confidential in relation to its funding arrangements.
25.2 Meaning of “increased cost”. In this Section 25 “increased cost” means, in relation to a Notifying Lender:
(a) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
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(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
but not an item attributable to a change in the rate of tax on the net income or profits or gains of the Notifying Lender (or a parent company of it) or an item covered by the indemnities for Taxes in Section 23 (or an item that would have been covered by Section 23.3 but for the application of an exclusion in Section 23.4).
For the purposes of this Section 25.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
25.3 Notification to Borrower of claim for increased costs. The Administrative Agent shall promptly notify the Obligors of the notice which the Administrative Agent received from the Notifying Lender under Section 25.1.
25.4 Payment of increased costs. The Borrowers shall pay to the Administrative Agent, within ten (10) days of the Administrative Agent’s demand, for the account of the Notifying Lender the amounts which the Administrative Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
25.5 Notice of prepayment. If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Section 25.4, the Borrowers may give the Administrative Agent not less than five (5) Business Days’ notice of its intention to prepay the Notifying Lender’s Contribution.
25.6 Prepayment; termination of Commitment. A notice under Section 25.5 shall be irrevocable; the Administrative Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:
(a) on the date on which the Administrative Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
(b) on the date specified in its notice of intended prepayment, the Borrowers shall prepay the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate.
25.7 Application of prepayment provisions. Sections 8.13, 8.14 and 8.17 shall apply in relation to any prepayment pursuant to this Section 25.
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25.8 Mitigation. If circumstances arise which would result in a notification under Section 25.1 then, if requested by an Obligor in writing and without in any way limiting the rights of the Notifying Lender under Section 25.4, the Notifying Lender shall use reasonable endeavors to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:
(a) have an adverse effect on its business, operations or financial condition; or
(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any non-de-minimis expense (unless indemnified to its satisfaction) or subject it to any non-de-minimis Taxes (unless indemnified to its satisfaction).
26 | SET-OFF |
26.1 Application of credit balances. Each Finance Party and its Affiliates may at any time after an Event of Default has occurred which is continuing and without prior notice:
(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of an Obligor at any office in any country of that Finance Party in or towards satisfaction of any sum then due from the Obligor to that Finance Party under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit of the Obligors;
(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and
(iii) enter into any other transaction or make any entry with regard to the credit balance which the Finance Party concerned considers appropriate;
provided, that in the event that any Defaulting Lender or its Affiliates exercises any such right of setoff, (x) all amounts so set off will be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 8.18 and, pending such payment, will be segregated by such Defaulting Lender or its Affiliates from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders and (y) the Defaulting Lender will provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender or its Affiliates as to which it exercised such right of set off. The rights of the Administrative Agent and each Finance Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set off) that the Administrative Agent, such Finance Party and their respective Affiliates may have.
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26.2 Existing rights unaffected. No Finance Party shall be obliged to exercise any of its rights under Section 26.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Finance Party is entitled (whether under the general law or any document).
26.3 Sums deemed due to a Lender. For the purposes of this Section 26, a sum payable by the Borrowers to the Administrative Agent or the Security Agent for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
27 | SHARING |
27.1 General. This Section 27 applies if a Lender (the “Sharing Lender”) receives or recovers any sum in respect of an amount due to it from the Borrowers under any Finance Document otherwise than by distribution from the Administrative Agent in accordance with the terms of this Agreement or, in the case of the GIEK Facility Lender, from GIEK under any GIEK Guarantee.
27.2 Sharing of recoveries. Subject to Sections 27.3 and 27.4:
(a) the Sharing Lender shall forthwith pay to the Administrative Agent an amount equal to the full sum so received or recovered;
(b) as between the Borrowers and the Sharing Lender, the Borrowers shall remain indebted to the Sharing Lender under the Finance Documents in the amount paid by the Sharing Lender to the Administrative Agent as if the Sharing Lender had not received or recovered the sum mentioned above; and
(c) the Administrative Agent shall treat the amount so paid to it by the Sharing Lender as if it were a payment by the Borrowers on account of amounts due from the Borrowers under the Finance Documents for distribution to the Sharing Lender and each of the other Lenders in the proportions in which the Sharing Lender and the other Lenders would have been entitled to receive the amount had it been paid by the Borrowers to the Administrative Agent in accordance with this Agreement.
27.3 Conditional reimbursement. Any payment made by the Sharing Lender or the Administrative Agent under Section 27.2 shall (whether or not stated to be so subject) be subject to the condition that, if all or any part of the amount paid by the Sharing Lender to the Administrative Agent later has to be repaid by the Sharing Lender to the Borrowers or any other Person, whether under any insolvency law or otherwise, each of the Lenders (other than the Sharing Lender) to which the Administrative Agent distributed any part of the Sharing Lender’s payment shall repay to the Administrative Agent for remittance to the Sharing Lender the amount which the Administrative Agent distributed to that Lender, together with such amount (if any) as is necessary to reimburse the Sharing Lender the appropriate portion of any interest it was obliged to pay on the sum it repaid to the Borrowers or other Person concerned.
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27.4 Exception to sharing. A Sharing Lender which has commenced or joined in any proceedings to recover sums due to it under any Finance Document and which receives or recovers an amount under a judgment in the proceedings or a settlement of them shall not have to share that amount with a Lender which has the legal right to, but does not, join in the proceedings or commence and diligently prosecute separate proceedings to recover the amounts due to it under the Finance Documents.
27.5 Notices of proceedings; receipt or recovery of amounts due. Without limiting the generality of Section 27.9, a Lender shall promptly, and in any event within five (5) Business Days, notify the Administrative Agent of:
(a) the commencement by that Lender of any proceedings which relate (wholly or in part) to any Finance Document or to any asset covered by a Security Interest created by a Finance Document;
(b) any judgment in, or settlement of, those proceedings;
(c) any other details about those proceedings which the Administrative Agent may request; and
(d) the receipt or recovery by the Lender of any sum in respect of an amount due to it by the Borrowers under any Finance Document otherwise than through a distribution by the Administrative Agent;
and the Administrative Agent will promptly pass on that information to the other Lenders and the Security Agent.
27.6 Set-off deemed to be recovery. For the purposes of this Section 27, if a Lender:
(a) extinguishes a liability which it has to the Borrowers in a certain sum; or
(b) reduces such a liability by a certain sum;
by exercising its rights under Section 26.1 (or any such other right or remedy as is referred to in Section 26.2) in respect of an amount due to the Lender by the Borrowers under a Finance Document, that Lender shall be deemed to have received that sum in respect of the amount due to it from the Borrower.
27.7 Asset transfer deemed to be recovery. If, in consideration of the transfer (by the Borrowers or any other Person) of an asset to a Lender or a Person designated by a Lender:
(a) that Lender releases a Borrower from any of its liabilities to it under a Finance Document; or
(b) that Lender undertakes (with the Borrowers or another Person) not to xxx such Borrower in respect of such a liability;
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the Lender shall be deemed to have received, in respect of an amount due to it from the Borrowers under this Agreement, a sum equal to the value of the asset concerned.
27.8 Valuation of assets. For the purpose of Section 27.7 the value of an asset is its open market net realizable value as determined by the Administrative Agent, and specified in a notice served by it on the Lender concerned, after consultation by the Administrative Agent with the other Lenders and such experts, if any, as the Lender may consider appropriate; and the Administrative Agent’s determination shall be conclusive absent manifest error.
27.9 Recovery from Obligor. This Section 27 also applies to sums received or recovered from an Obligor or which would be deemed to be so received if the references in Sections 27.5 and 27.6 to the Borrowers were references to an Obligor.
28 | ROLE OF THE ADMINISTRATIVE AGENT |
28.1 Appointment of the Administrative Agent and the Security Agent.
(a) Each other Finance Party appoints the Administrative Agent to act as its agent under and in connection with the Finance Documents. The Administrative Agent shall act as the Security Agent for and on behalf of the Lenders in connection with the Finance Documents. The Administrative Agent and the Security Agent will always be the same institution.
(b) Each other Finance Party authorizes the Administrative Agent to exercise the rights, powers, authorities and discretions specifically given to the Administrative Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions, provided, however, that the Administrative Agent will not be required to take any action or fail to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Finance Document or applicable law, including for the avoidance of doubt, any action of failure to act that may be in violation of the automatic stay under any bankruptcy or insolvency law or other law that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any bankruptcy or insolvency law.
(c) Each other Finance Party hereby further designates, appoints and transfers to the Security Agent the respective rights of each other Finance Party to receive, hold, administer and enforce the Ship Mortgages covering the Collateral Vessels, or any one of them, as trustee mortgagee on behalf of the Finance Parties, and to take such action as trustee mortgagee and to exercise such powers and discretion respecting the Ship Mortgages as are delegated to a ship mortgagee under such Ship Mortgages or by applicable law, together with such powers and discretion that are reasonably incidental thereto. The Security Agent, as trustee mortgagee hereby declares that it accepts the trust hereby created for the limited purpose of holding the Ship Mortgages and exercising remedies thereunder and agrees to perform such trust for the sole use and benefit of the Finance Parties on the terms set forth herein and upon execution and delivery of each respective Ship Mortgage. In its capacity as trustee mortgagee, the Security Agent is entitled to all of the protections and indemnities of the Security Agent. The institution that serves as Administrative Agent shall also serve as Security Agent.
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28.2 Duties of the Administrative Agent.
(a) The Administrative Agent shall promptly forward to a Party the original or a copy of any document or notice which is delivered to the Administrative Agent for that Party by any other Party.
(b) Except where a Finance Document specifically provides otherwise, the Administrative Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(c) If the Administrative Agent receives notice from a Party referring to this Agreement, describing an Event of Default or a Default and stating that the circumstance described is an Event of Default or a Default, it shall promptly notify GIEK, the Lenders and the Security Agent.
(d) If the Administrative Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Administrative Agent) under this Agreement, it shall promptly notify the other Finance Parties.
(e) The Administrative Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.
(f) The Administrative Agent shall not have any duties or obligations to any Person under this Agreement or the other Finance Documents except to the extent that they are expressly set out in those documents and none of the Borrowers nor any other Obligor shall have rights as a third-party beneficiary of any of the provisions of this Section 28.
28.3 Particular duties and liability of the Administrative Agent in relation to the GIEK Facility Lender.
(a) The Administrative Agent shall act as Administrative Agent for the GIEK Facility Lender and have the following duties:
(i) to inform the Borrowers of interest, installments and other amounts due from the Borrowers to the GIEK Facility Lender, and guarantee fees due from the Borrowers to GIEK under the Finance Documents or Fee Letter;
(ii) to notify the GIEK Facility Lender and GIEK of any non-payment of any principal, interest, fees or other amount payable to the GIEK Facility Lender and/or GIEK under this Agreement;
(iii) to notify the GIEK Facility Lender and GIEK of (i) any failure by the Borrowers to deliver the documents required to be delivered under Section 11.12 (Financial Condition) and/or (ii) in the event any of the insurances required to be maintained under Section 14 (Insurance) reaches its expiry date without the relevant evidence of renewal being presented to it as Administrative Agent;
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(iv) to forward to the GIEK Facility Lender the original or a copy of any document which is delivered to the Administrative Agent for the GIEK Facility Lender by the Borrowers;
(v) unless otherwise instructed by the Majority Lenders, request from the Borrowers that any non-compliance contemplated by sub-clause (ii) or (iii) above, be immediately remedied (if capable of remedy); and
(vi) to keep and hold the originals of the Security Documents.
(b) Notwithstanding Section 28.9 paragraph (a) below, and without limiting Section 28.9 paragraph (c), the Administrative Agent will not be liable to the GIEK Facility Lender for any failure to perform its duties as Administrative Agent, unless directly caused by its negligence or willful misconduct.
28.4 Structuring Banks and Affiliates. With respect to its Commitments and the Advances made by it as Lender, each Structuring Bank and the Administrative Agent shall have the same rights and powers under the Finance Documents as any other Lender and may exercise the same as though it were not a Structuring Bank or Administrative Agent. Each Structuring Bank, the Administrative Agent and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Obligor, any of its Subsidiaries and any Person that may do business with or own securities of any Obligor or any such Subsidiary, all as if such institution was not a Lender or an Administrative Agent and without any duty to account therefor to the Lenders. The Structuring Bank and the Administrative Agent shall not have any duty to disclose any information obtained or received by it or any of its Affiliates relating to any Obligor or any of its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Administrative Agent.
28.5 No fiduciary duties.
(a) Nothing in this Agreement constitutes the Administrative Agent or any Mandated Lead Arranger as a trustee or fiduciary of any other Person.
(b) Neither the Administrative Agent nor the Mandated Lead Arrangers shall be bound to account to any other Finance Party for any sum or the profit element of any sum received by it for its own account.
(c) Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.
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28.6 Rights, discretions and obligations of the Administrative Agent.
(a) The Administrative Agent may rely on:
(i) any representation, notice or document believed by it to be genuine, correct and appropriately authorized; and
(ii) any statement made by a director, authorized signatory or employee of any Person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
(b) The Administrative Agent may assume (unless it has received actual notice to the contrary in its capacity as agent for the other Finance Parties) that:
(i) no Default or Event of Default has occurred (unless it has actual knowledge of an Event of Default or a Default arising under Section 20.1(a) of this Agreement) and no Party is in breach of or default under its obligations under any Finance Document;
(ii) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised;
(iii) any notice or request made by the Borrowers (other than a Drawdown Notice) is made on behalf of and with the consent and knowledge of all the Obligors from time to time; and
(iv) in relation to any instructions from the Majority Lenders to exercise or refrain from exercising any right, power, authority or discretion vested in it as the Administrative Agent; all applicable conditions under each relevant Finance Document which are required to be satisfied have been satisfied.
(c) The Administrative Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts (whether obtained by the Administrative Agent or by any other Finance Party) and shall not be responsible for any loss occasioned by so relying.
(d) The Administrative Agent may act in relation to the Finance Documents through its personnel and agents and may delegate by power of attorney or otherwise to any Person for any period all or any of the rights, powers and discretions vested in it by any of the Finance Documents. Any such agency or delegation may be made upon such terms and conditions as the Administrative Agent may think fit in the interests of the Finance Parties.
(e) The Administrative Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(f) Notwithstanding any other provision of any Finance Document to the contrary, the Administrative Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation, a breach of fiduciary duty or a breach of a duty of confidentiality or otherwise render it liable to any Person and the Administrative Agent may do anything which is, in its opinion, necessary to comply with any law or regulation.
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28.7 Instructions to the Administrative Agent.
(a) Unless a contrary indication appears in a Finance Document, the Administrative Agent:
(i) shall exercise any right, power, authority or discretion vested in it as the Administrative Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as the Administrative Agent);
(ii) shall not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders; and
(iii) may request clarification of any instructions given to it by the Majority Lenders and may refrain from acting in accordance with such instructions until it has received such clarification as it may require.
(b) Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
(c) The Administrative Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, all the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders (or, if appropriate, all the Lenders), the Administrative Agent may act (or refrain from taking action) as it considers to be in the best interests of the Lenders.
(e) The Administrative Agent is not authorized to act on behalf of a Lender (without first obtaining that Lender’s written consent) in any legal or arbitration proceedings relating to any Finance Document.
28.8 Responsibility for documentation. Neither the Administrative Agent nor any of the Mandated Lead Arrangers:
(a) is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Administrative Agent, the Security Agent, any Obligor or any other Person given in, or in connection with, any Finance Document; or
(b) is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into or made or executed in anticipation of, or in connection with, any Finance Document; or
(c) is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise; or
(d) shall be required to examine or enquire into the title of any Obligor to any assets whether or not any defect in such title is or was known to the Administrative Agent or might
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be, or might have been, discovered upon examination, inquiry or investigation and whether or not capable of remedy and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.
28.9 Exclusion of liability.
(a) Without limiting paragraph (b), the Administrative Agent will not be liable for any act or omission by it under, or in connection with, any Finance Document or for any cost, loss or liability resulting therefrom unless directly caused by its gross negligence or willful misconduct.
(b) No Party (other than the Administrative Agent) may take any proceedings against any officer or employee of the Administrative Agent in respect of any claim it might have against the Administrative Agent or in respect of any act or omission of any kind by that officer or employee in relation to any Finance Document and any officer or employee of the Administrative Agent may rely on this Section 28.9.
(c) The Administrative Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by it if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by it for that purpose.
(d) Nothing in this Agreement will oblige the Administrative Agent to satisfy any know your customer requirement in relation to the identity of any Person on behalf of any other Finance Party and each Lender confirms to the Administrative Agent and each Mandated Lead Arrangers that such Lender is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Administrative Agent or any Mandated Lead Arranger.
(e) Each other Finance Party confirms to the Administrative Agent that it is solely responsible for any know your customer requirements it is required to carry out and that it may not rely on any statement in relation to those requirements made by any other Person.
28.10 Lenders’ indemnity to the Administrative Agent. Each Lender severally shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Loan) indemnify the Administrative Agent (to the extent not promptly reimbursed by the Obligors), within three (3) Business Days of demand, from and against such Lender’s ratable share of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Administrative Agent in any way relating to or arising out of the Finance Documents or any action taken or omitted by the Administrative Agent under the Finance Documents (collectively, the “Indemnified Costs”); provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of
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counsel) payable by the Obligors under Section 21, to the extent that the Administrative Agent is not promptly reimbursed for such costs and expenses by the Obligors. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 28.10 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person.
28.11 Resignation of the Administrative Agent.
(a) The Administrative Agent may resign and appoint one of its Affiliates acting through an office in New York as successor by giving notice to the other Finance Parties and the Borrowers.
(b) Alternatively, the Administrative Agent may resign by giving notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (with the consent of the Borrowers, which shall not be unreasonably withheld or delayed) may agree and appoint a successor Agent.
(c) If for any reason a successor Administrative Agent has not been appointed in accordance with paragraph (b) within thirty (30) days after notice of resignation was given, the Administrative Agent (after consultation with the Borrowers) may appoint a successor Administrative Agent (acting through an office in New York).
(d) The retiring Administrative Agent shall, at its own cost, make available to the successor Administrative Agent such documents and records and provide such assistance as the successor Administrative Agent may reasonably request for the purposes of performing its functions as Administrative Agent under the Finance Documents.
(e) The Administrative Agent’s resignation notice shall only take effect upon the appointment of a successor.
(f) Upon the appointment of a successor, the retiring Administrative Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Section 28. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(g) The Majority Lenders may with the consent of the Borrowers (which shall not be unreasonably withheld or delayed), by notice to the Administrative Agent, require it to resign in accordance with paragraph (b). In this event, the Administrative Agent shall resign in accordance with paragraph (b).
28.12 Confidentiality.
(a) In acting as agent for the Parties, the Administrative Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
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(b) If information is received by a division or department of the Administrative Agent other than that division or department responsible for complying with the obligations assumed by the Administrative Agent under the Finance Documents, that information may be treated as confidential to that division or department, and the Administrative Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
28.13 Relationship with the Lenders.
(a) The Administrative Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Administrative Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Lending Office:
(i) entitled to or liable for any payment due under any Finance Document on that day; and
(ii) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five (5) Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b) Any Lender may by notice to the Administrative Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Section 31 electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Section 31 and Section 31.9 and the Administrative Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
28.14 Credit appraisal by the Lenders. Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Administrative Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Finance Document including but not limited to:
(a) the financial condition, status and nature of the Obligors and each member of the Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
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(c) whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(d) the adequacy, accuracy and/or completeness of any information provided by the Administrative Agent, any other Party or by any other Person under, or in connection with, any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
28.15 Administrative Agent’s Management Time. Any amount payable to the Administrative Agent under Sections 21, 22 and 28.11 shall include the cost of utilizing the Administrative Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Administrative Agent may notify to the Borrowers and the Lenders, and is in addition to any fee paid or payable to the Administrative Agent under Sections 21.
28.16 Deduction from amounts payable by the Administrative Agent. If any Party owes an amount to the Administrative Agent under the Finance Documents, the Administrative Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Administrative Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
28.17 Defaulting Lender as Agent. Anything herein to the contrary notwithstanding, if at any time the Majority Lenders determine that the Person serving as Administrative Agent is (without taking into account any provision in the definition of “Defaulting Lender” requiring notice from the Administrative Agent or any other party) a Defaulting Lender pursuant to Section (iv) of the definition thereof, the Majority Lenders may by notice to the Borrowers and such Person remove such Person as Administrative Agent and, in consultation with the Borrowers, appoint a replacement Administrative Agent hereunder. Such removal will, to the fullest extent permitted by applicable law, be effective on the earlier of (i) the date a replacement Administrative Agent is appointed and (ii) the date thirty (30) days after the giving of such notice by the Majority Lenders (regardless of whether a replacement Administrative Agent has been appointed).
28.18 Consultation with GIEK. For the avoidance of doubt, the GIEK Facility Lender, as and when it deems appropriate in its discretion, may consult with GIEK in relation to any matter relating this Agreement and the Transaction Documents.
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29 | TRANSFERS RELATING TO BORROWERS; TRANSFERS BY LENDERS AND CHANGES IN LENDING OFFICES |
29.1 Transfer Relating To Borrowers.
(a) The Borrowers may not, without the prior written consent of the Administrative Agent given on the instructions of all the Lenders, transfer any of their rights, liabilities or obligations under any Finance Document.
(b) Without limitation of the Lenders’ rights under the Finance Documents, the Borrowers will not, and will not permit any other Obligor to convey, sell, assign, transfer or otherwise dispose of the Borrowers’ shares, any Collateral Vessel, freights or earnings of any Collateral Vessel (prior to the receipt of such freights or earnings), or other significant portion of the Borrowers’ property, whether now owned or hereafter acquired, to any Person, except:
(i) The Borrowers may convey, sell, assign, transfer or otherwise dispose of property which is damaged, worn-out, obsolete or no longer used or useful in the conduct of the Borrower’s business;
(ii) The Borrowers may convey, sell, assign, transfer or otherwise dispose of property to other Persons to the extent necessary or advisable under local law for Collateral Vessel operations under any drilling contract, provided that the Borrower’s may not make any sale, assignment, transfer or disposal which shall exceed $50,000,000 in value singly or in the aggregate, without the prior written consent of the Lenders and without providing thirty (30) days’ prior written notice of such sale, assignment, transfer or disposal to the Administrative Agent;
(iii) The Guarantor and/or its Subsidiaries, as applicable, may, without the consent of the Lenders, transfer, in whole or in part, their shares in the Borrowers to any Subsidiary of the Guarantor controlled at all times by the Guarantor;
(iv) The Borrowers may, without the consent of the Lenders, transfer, in whole or in part, their assets, including the Collateral Vessels, to any Subsidiary of the Guarantor controlled at all times by the Guarantor, and, in the case of a transferee of assets of the Borrowers, to any Subsidiary of the Guarantor engaged in no business other than owning and operating such assets of the Borrowers,
in the case of sub-clauses (iii) and (iv) above, provided, that, no Default or Event of Default shall have occurred and be continuing or would result upon giving effect to such transfer and provided, further, that (A) such assignee (i) shall assume the relevant assignor’s obligations under the Finance Documents by entering into such documentation as shall be requested by the Administrative Agent, and (ii) shall grant a valid and perfected lien on any Collateral subject to such transfer such that the Lenders’ Security Interests and priority remain unaffected by such transfer, (B) all assignor’s and assignee’s obligations under the Finance Documents shall be guaranteed by the Guarantor, (C) such transfer shall be accomplished pursuant to legal documentation, including appropriate amendments to the Finance Documents, satisfactory to the Administrative Agent and counsel for the Lenders appointed by the Administrative Agent, and (D) the Administrative Agent shall have received legal opinions addressed to the Lenders, in scope and substance, and from such counsel, in each case, satisfactory to the Administrative Agent.
29.2 Transfer by a Lender. Subject to this Section 29, a Lender (the “Transferor Lender”) may at any time, with the prior written consent of the Administrative Agent and the Obligors (such consent not to be unreasonably withheld or delayed), cause:
(a) its rights in respect of all or part of its Contribution; or
(b) its obligations in respect of all or part of its Commitment; or
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(c) a combination of (a) and (b);
to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution or export credit agency (a “Transferee Lender”) by delivering to the Administrative Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Administrative Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender. A Lender may at any time, with the prior written consent of the Administrative Agent and the Obligors (such consent not to be unreasonably withheld or delayed), enter into any other such transfer of its Contribution or Commitment. Each Lender will cooperate, as may be reasonable and appropriate, in connection with any transfer of a Contribution or Commitment permitted under this Agreement.
Notwithstanding any other provision set forth in this Agreement, if as a result of any transfer pursuant to this Section 29.2, any Hedging Bank shall no longer be a Lender or an Affiliate of a Lender, then such Hedging Bank shall cause all of its rights under its Hedging Agreements with any Borrower to be transferred to, and its obligations under such Hedging Agreements to be assumed by, another Hedging Bank.
Except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Transfer Certificate with respect to such assignment) shall in no event be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
Notwithstanding any other provision set forth in this Agreement, any Lender may at any time, without the consent of the Obligors or the Administrative Agent, create a security interest in all or any portion of its rights under this Agreement and the other Finance Documents (including, without limitation, the Advances owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or any other central bank having jurisdiction over such Lender; provided, that no such assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any Assignee for such Lender as a party hereto.
Notwithstanding the above, no prior written consent of the Obligors will be required (A) if an Event of Default has occurred and is continuing or (B) where the Transferee Lender is a Subsidiary or the Parent Company (or another subsidiary of the parent company) of the Transferor Lender or of another Lender or is an Affiliate of the Transferor Lender, but the provisions of the final paragraph of Section 29.14 shall apply to any such transfer as if references to the Lender which changes its lending office were references to the Transferee Lender.
Notwithstanding the foregoing provisions of this Section 29.2, no such assignment will be made to any Defaulting Lender or its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this Section.
In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment under this Section 29.2 will be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which
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may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Administrative Agent, the applicable pro rata share of Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full share of all Advances pro rata on the basis of its original Commitment. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder becomes effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest will be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
If a Lender assigns or transfers any of its rights or obligations under the Finance Documents and as a result of circumstances existing at the date the assignment or transfer occurs an Obligor would be obliged to make a payment to the Transferee Lender under Section 23 or Section 25, then the Transferee Lender shall be entitled to receive payment under Section 23 and Section 25 only to the same extent as the Transferor Lender would have been if the assignment or transfer had not occurred, provided that the foregoing limitation shall not apply in respect of an assignment or transfer (i) made in the ordinary course of the primary syndication of the Finance Documents, (ii) made pursuant to Section 24.5 (Mitigation) or at the request of any Obligor, or (iii) made while an Event of Default is continuing.
29.3 Transfer Certificate, delivery and notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Administrative Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
(a) sign the Transfer Certificate on behalf of itself, the Obligors, the Security Agent and each of the other Lenders;
(b) on behalf of the Transferee Lender, send to each Obligor letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b).
29.4 Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date provided that it is signed by the Administrative Agent under Section 29.3 on or before that date.
29.5 No transfer without Transfer Certificate. Subject as provided in Section 29.12, no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, any Obligors, the Administrative Agent or the Security Agent unless it is effected, evidenced or perfected by a Transfer Certificate.
29.6 Lender re-organization; waiver of Transfer Certificate. However, if a Lender enters into any merger, de-merger or other reorganization as a result of which all its rights or obligations vest in another Person (the “successor”), the Administrative Agent may, if it sees
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fit, by notice to the successor and the Borrowers and the Security Agent waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Administrative Agent’s notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
29.7 Effect of Transfer Certificate. A Transfer Certificate signed by the Administrative Agent as herein provided has the following effects:
(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely;
(b) the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
(c) the Transferee Lender becomes a “Lender” with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Administrative Agent and the Security Agent and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
(e) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Section 5.7 and Section 21, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them.
29.8 Maintenance of register of Lenders. During the Security Period the Administrative Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Section 29.4) of the Transfer Certificate; and the Administrative Agent shall make the register available for inspection by any Lender, the Security Agent and the Borrowers during normal banking hours, subject to receiving at least three (3) Business Days prior notice.
29.9 Reliance on register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Administrative Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
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29.10 Authorization of Agent to sign Transfer Certificates. The Security Agent and each Lender irrevocably authorize the Administrative Agent to sign Transfer Certificates on its behalf.
29.11 Registration fee. In respect of any Transfer Certificate, the Administrative Agent shall be entitled to recover a registration fee of $5,000 from the Transferor Lender or (at the Administrative Agent’s option) the Transferee Lender.
29.12 Sub-participation; subrogation assignment. Each Lender may sell participations to one or more banks or other entities (other than any Obligor or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances owing to it); provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder and sole payee of any such Advance for all purposes of this Agreement, (iv) the Obligors, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Finance Documents and (v) any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the participant, agree to any amendment, modification or waiver that requires the consent of each Lender directly affected thereby pursuant to Section 30.2 and directly affects such participant.
The Lenders or any of them may assign, in any manner and terms agreed by the Administrative Agent and the Security Agent, all or any part of those rights to an insurer or surety who has become subrogated to them (including, in the case of the GIEK Facility Lender, to GIEK).
29.13 Right of Subrogation of GIEK.
(a) GIEK will when amounts have been paid under any GIEK Guarantee, automatically and without any notice or formalities of any kind whatsoever, have the right of subrogation into the rights of the GIEK Facility Lender under the Finance Documents in such proportion as have been paid by GIEK under the GIEK Guarantees and always subject to the terms of this Agreement. GIEK shall by such subrogation have the same rights as relevant thereunder as if the Finance Documents were executed directly in favor of GIEK as security for the GIEK Guarantees rights against the Obligors, after having honored claims under the GIEK Guarantees. Each of the Obligors waives any right to dispute or delay a subrogation of the rights under the Finance Documents to GIEK effectuated pursuant to the terms of this Agreement, and each of the Obligors undertakes to sign and execute any documents required by GIEK in connection with a subrogation as aforesaid, and/or enforcement of the Finance Documents.
(b) In the event that a subrogation right should occur and all of the GIEK Facility Loan and all amounts outstanding under the GIEK Facility Loan irrevocably and unconditionally have been paid to the GIEK Facility Lender, the GIEK Facility Lender shall assign its rights pursuant to the Finance Documents to GIEK, who shall become party to the Finance Documents and thereby replacing the GIEK Facility Lender in all respects, and any
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settlement in case of realization of the assets of the Borrowers shall be made between GIEK (or whomsoever they choose to nominate) on a pari passu basis based on such parties’ proportionate shares subject always to the terms of this Agreement.
29.14 Change of lending office. A Lender may change its lending office by giving notice to the Administrative Agent and the change shall become effective on the later of:
(a) the date on which the Administrative Agent receives the notice; and
(b) the date, if any, specified in the notice as the date on which the change will come into effect.
Where any change in a Lender’s lending office is made which results (or would result on the basis of a change to applicable law or regulation affecting that Lender which has been announced at the time of the change and of which that Lender could reasonably be expected to be aware) in amounts becoming due under Sections 23 or 25 at that time (or, as the case may be, thereafter in accordance with the relevant change in law or regulation), the Lender which so changes its lending office shall be entitled to receive those amounts only to the extent that the Lender would have been so entitled had there been no change in its lending office. In respect of any change of lending office, the Administrative Agent shall be entitled to recover a registration fee of $2,500 from the applicable Lender.
29.15 Notification. On receiving such a notice, the Administrative Agent shall notify the Borrowers and the Security Agent; and, until the Administrative Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Administrative Agent last had notice.
29.16 Replacement of Reference Bank. If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Section 5 then, unless the Borrowers, the Administrative Agent and the Majority Lenders otherwise agree, the Administrative Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
29.17 Luxembourg Provisions. Each Lender and each Luxembourg Obligor hereby expressly accept and confirm, for the purposes of article 1278 of the Luxembourg civil code, that notwithstanding any assignment, transfer and/or novation permitted under, and made in accordance with the provisions of this Agreement, any Security Interest given in connection with this Agreement shall be preserved for the benefit of any new Lender.
30 | VARIATIONS AND WAIVERS; PLATFORM |
30.1 Variations, waivers etc. by Majority Lenders. Subject to Section 30.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Finance Party’s rights or remedies under such a provision or the general law,
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only if the document is signed, or specifically agreed to by fax by the Administrative Agent with the consent of and on behalf of the Majority Lenders, by the Administrative Agent and the Security Agent in their own rights (to the extent their rights and obligations under the Finance Documents in such capacities are directly affected), and, if the document relates to a Finance Document to which an Obligor is party, by that Obligor.
30.2 Variations, waivers etc. requiring agreement of all Lenders. However,
(a) as regards the following, Section 30.1 applies as if the words “by the Administrative Agent with the consent of and on behalf of the Majority Lenders” were replaced by the words “with the consent of and on behalf of every Lender”:
(i) a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
(ii) a reduction in the amount of any payment of principal, interest, fees or commission payable;
(iii) an increase in or an extension of any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders ratably under this Agreement;
(iv) a change to any Lender’s Commitment;
(v) an extension of Availability Period;
(vi) a change to the definition of “Majority Lenders” or “Finance Documents”;
(vii) a change to the preamble or to Section 2, 3, 4, 5.1, 8, 10.5, 18, 29 or 33;
(viii) a change to this Section 30.2;
(ix) a change to the Obligors other than in accordance with Section 29;
(x) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document (except where such release is contemplated by the Finance Documents); and
(xi) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required;
(b) as regards a change in the Commercial Facility Commitment Fee, the Commercial Facility Loan Margin, the Commercial Facility Participation Fee or in the definition of LIBOR, Section 30.1 applies as if the words “by the Administrative Agent on behalf of the Majority Lenders” were replaced by the words “by all the Commercial Facility Lenders”; and
(c) as regards a change in the GIEK Commitment Fee, the GIEK Facility Commitment Fee, the GIEK Facility Loan Margin, the GIEK Facility Premium, the GIEK Participation Fee or in the CIRR Rate or in the definition of LIBOR, Section 30.1 applies as if the words “by the Administrative Agent on behalf of the Majority Lenders” were replaced by the words “by the GIEK Facility Lender”.
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30.3 Exclusion of other or implied variations. Except for a document which satisfies the requirements of Sections 30.1 and 30.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Finance Parties or any of them (or any Person acting on behalf of any of them) shall result in the Finance Parties or any of them (or any Person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by the Borrowers or an Obligor of an obligation under a Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by the general law;
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
30.4 Exclusion of Defaulting Lender. Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be entitled to vote in respect of amendments and waivers hereunder and the Commitments and the outstanding Advances or other extensions of credit of such Lender hereunder will not be taken into account in determining whether the Majority Lenders or all of the Lenders, as required, have approved any such amendment or waiver (and the definition of “Majority Lenders” will automatically be deemed modified accordingly for the duration of such period); provided, that any such amendment or waiver that would increase or extend the term of the Commitment of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Lender.
30.5 Most Favored Nation. In the event that any member of the Group enters into an agreement after the date hereof for new Indebtedness in excess of $25,000,000 which (i) requires that a representation as to no material adverse change (however defined) be made on each interest period or other such periodic interval or (ii) contains an event of default (however defined) upon the occurrence of a material adverse change (however defined) (each such provision a “New MAE Provision”), then, in each case, such New MAE Provision shall be automatically imported into this Agreement mutatis mutandis for so long as such provision is in effect. The Obligors and the Lenders agree that upon the importation of a New MAE Provision pursuant to the preceding sentence, they will negotiate and execute an amendment to this Agreement to reflect such importation.
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30.6 Platform.
(a) The Obligors agree that the Administrative Agent may make any communication available to the Lenders by posting the communications on Intralinks, Fixed Income Direct or a substantially similar electronic transmission systems (the “Platform”). The Obligors acknowledge that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution.
(b) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF ANY COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN ANY COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH ANY COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RESPECTIVE AFFILIATES OR ANY OF THE RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES OF THE ADMINISTRATIVE AGENT OR ITS RESPECTIVE AFFILIATES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO ANY LENDER, ANY OBLIGOR OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE TRANSMISSION BY ANY OBLIGOR, ANY LENDER, ANY OF THE AGENT PARTIES OR ANY OTHER PERSON OF ANY COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
The Administrative Agent agrees that the receipt of any communications by the Administrative Agent at its email address set forth below shall constitute effective delivery of such communications to the Administrative Agent for purposes of the Finance Documents. Each Lender agrees that notice to it (as provided in the next sentence) specifying that any communications have been posted to the Platform shall constitute effective delivery of such communications to such Lender for purposes of the Finance Documents. Each Lender agrees to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Lender’s email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.
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31 | NOTICES |
31.1 General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular Persons shall be construed accordingly.
31.2 Addresses for communications. A notice shall be sent:
(a) | to the Obligors: |
37, rue d’Anvers
X-0000 Xxxxxxxxxx
Xxxxxxxxxx
Attention: Centralis Luxembourg
With copy to
0000 Xxxx Xxx Xxxx, Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Boots
Fax: x0 (000) 000-0000
To: Pacific Sharav S.ÀR.L:
37, rue d’Anvers
X-0000 Xxxxxxxxxx
Xxxxxxxxxx
Attention: Centralis Luxembourg
With copy to
0000 Xxxx Xxx Xxxx, Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Boots
Fax: x0 (000) 000-0000
To: Pacific Drilling VII Limited
Trident Xxxxxxxx,
P.O. Box 146, Wickhams Cay, Road Town
Tortola, British Virgin Islands
Attention: Trident Trust
With copy to
0000 Xxxx Xxx Xxxx, Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Boots
Fax: x0 (000) 000-0000
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(b) | to GIEK: |
Eksportkreditt Norge AS
Hieronymus Heyerdahis gate 1, X.X. Xxx 0000 Xxxx
XX-0000 Xxxx
Xxxxxx
Attn: Loan administration
Fax: (00)-00 00 00 00
E-mail: xxxxxxx@xxxxxxxxxxxxxx.xx
(c) | to the GIEK Facility Lender: |
Dronning Mauds gate 15
XX Xxx 0000 Xxxx
0000 Xxxx
Xxxxxx
Attn: Loan Administration Department
Fax: (00) 0000 0000
(d) | to a Commercial Facility Lender: At the address below its name in |
Schedule 1 or (as the case may require) in the relevant Transfer Certificate. |
(e) | to the Administrative Agent: |
DNB Bank ASA
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx/Xxxxx Xxxxxx Xxxxxxxx
Fax: x0 000-000-0000/3900
(f) | to the Security Agent: |
DNB Bank ASA
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Florianne Xxxxx
Fax: x0 000-000-0000
or to such other address as the relevant party may notify the Administrative Agent or, if the relevant party is the Administrative Agent or the Security Agent, the Borrowers, GIEK, the Lenders and the Obligors.
31.3 Effective date of notices. Subject to Sections 31.4 and 31.5:
(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
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31.4 Service outside business hours. However, if under Section 31.3 a notice would be deemed to be served:
(a) on a day which is not a Business Day in the place of receipt; or
(b) on such a Business Day, but after 5 p.m. local time;
the notice shall (subject to Section 31.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a Business Day.
31.5 Illegible notices. Sections 31.3 and 31.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
31.6 Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
31.7 English language. Any notice under or in connection with a Finance Document shall be in English.
31.8 Meaning of “notice”. In this Section 31, “notice” includes any demand, consent, authorization, approval, instruction, waiver or other communication.
31.9 Electronic communication. Any communication to be made between the Administrative Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Administrative Agent and the relevant Lender:
(a) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(c) notify each other of any change to their address or any other such information supplied by them.
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Any electronic communication made between the Administrative Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Administrative Agent only if it is addressed in such a manner as the Administrative Agent shall specify for this purpose.
32 | PDSA GUARANTY |
32.1 Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all Obligations of each Obligor now or hereafter existing under the Finance Documents, whether for principal, interest, fees, expenses or otherwise (such Obligations being the “PDSA Guaranteed Obligations”), to the Administrative Agent and the Lenders, and agrees to pay any and all reasonable expenses (including reasonable counsel fees and expenses) incurred by the Administrative Agent or any Lender in enforcing any rights under the guaranty contained in this Section 32. Without limiting the generality of the foregoing, the Guarantor’s liability shall extend to all amounts that constitute part of the PDSA Guaranteed Obligations and would be owed by each Obligor to the Administrative Agent or any Lender under the Finance Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Obligor.
32.2 Guaranty Absolute. The Guarantor guarantees that the PDSA Guaranteed Obligations will be paid strictly in accordance with the terms of the Finance Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any Lender with respect thereto. The obligations of the Guarantor under the guaranty contained in this Section 32 are independent of the PDSA Guaranteed Obligations or any other Obligations of any other Obligor under the Finance Documents, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce the guaranty contained in this Section 32, irrespective of whether any action is brought against any Obligor or whether any Obligor is joined in any such action or actions. The liability of the Guarantor under the guaranty contained in this Section 32 shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby irrevocably waives, any defenses it may now or hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Finance Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the PDSA Guaranteed Obligations or any other Obligations of any Obligor under the Finance Documents, or any other amendment or waiver of or any consent to departure from any Finance Document, including, without limitation, any increase in the PDSA Guaranteed Obligations resulting from the extension of additional credit to any Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral security, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the PDSA Guaranteed Obligations;
(d) any manner of application of collateral security, or proceeds thereof, to all or any of the PDSA Guaranteed Obligations, or any manner of sale or other disposition of any
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collateral security for all or any of the PDSA Guaranteed Obligations or any other Obligations of any Obligor under the Finance Documents or any other assets of any Obligor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or existence of any Obligor or any of its Subsidiaries;
(f) any failure of the Administrative Agent or any Lender to disclose to any Obligor or the Guarantor any information relating to the financial condition, operations, properties or prospects of any Obligor now or in the future known to the Administrative Agent or any Lender (the Guarantor waiving any duty on the part of the Administrative Agent or Lenders to disclose such information); or
(g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Administrative Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, any Obligor, the Guarantor or any other guarantor or surety (other than the defense of payment or performance).
The guaranty contained in this Section 32 shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the PDSA Guaranteed Obligations is rescinded or must otherwise be returned by the Administrative Agent or any Lender or any other Person upon the insolvency, bankruptcy or reorganization of any Obligor or otherwise, all as though such payment had not been made.
32.3 Waivers and Acknowledgments.
(a) The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the PDSA Guaranteed Obligations and the guaranty contained in this Section 32 and any requirement that the Administrative Agent or any Lender protect, secure, perfect or insure any Security Interest or any property subject thereto or exhaust any right or take any action against any Obligor or any other Person or any collateral security.
(b) The Guarantor hereby waives any right to revoke the guaranty contained in this Section 32, and acknowledges that the guaranty contained in this Section 32 is continuing in nature and applies to all PDSA Guaranteed Obligations, whether existing now or in the future.
(c) The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Transaction Documents and that the waivers set forth in this Section 32 are knowingly made in contemplation of such benefits.
32.4 Subrogation. The Guarantor will not exercise any rights that it may now or hereafter acquire against any Obligor or any other insider guarantor that arise from the existence, payment, performance or enforcement of the Guarantor’s Obligations under the guaranty contained in this Section 32 or any other Finance Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Administrative Agent or any Lender against any Obligor or any other insider guarantor or any collateral security, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without
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limitation, the right to take or receive from any Obligor or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and all other amounts payable under the guaranty contained in this Section 32 shall have been paid in full in cash, the Commitments shall have expired or terminated. If any amount shall be paid to the Guarantor in violation of the preceding sentence at any time prior to the later of the payment in full in cash of the PDSA Guaranteed Obligations and all other amounts payable under the guaranty contained in this Section 32 and the Final Repayment Date under this Agreement, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent to be credited and applied to the PDSA Guaranteed Obligations and all other amounts payable under the guaranty contained in this Section 32, whether matured or unmatured, in accordance with the terms of the Finance Documents, or to be held as collateral security for any PDSA Guaranteed Obligations or other amounts payable under the guaranty contained in this Section 32 thereafter arising. If (i) the Guarantor shall make payment to the Administrative Agent or any Lender of all or any part of the PDSA Guaranteed Obligations, (ii) all of the PDSA Guaranteed Obligations and all other amounts payable under the guaranty contained in this Section 32 shall be paid in full in cash and (iii) the Final Repayment Date shall have occurred, the Administrative Agent and the Lenders will, at the Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the PDSA Guaranteed Obligations resulting from such payment by the Guarantor.
32.5 Continuing Guaranty. The guaranty contained in this Section 32 is a continuing guaranty and shall (a) remain in full force and effect until the later of the payment in full in cash of the PDSA Guaranteed Obligations and all other amounts payable under the guaranty contained in this Section 32 and the Final Repayment Date under this Agreement, (b) be binding upon the Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Administrative Agent and the Lenders and their successors, transferees and assigns.
33 | SUPPLEMENTAL |
33.1 Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to each Finance Party are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
33.2 Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
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33.3 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.
33.4 Patriot Act Notification. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Obligors that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Obligor, which information includes the name and address of such Obligor and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Obligor in accordance with the Patriot Act. Each Obligor shall, and shall cause each of its Subsidiaries to, provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Administrative Agent or any Lenders in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.
33.5 No Waiver; Remedies; Entire Agreement. No failure on the part of any Lender or the Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any other Finance Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. This Agreement and the other Finance Documents constitute the entire agreement of the parties with respect hereto.
33.6 Limitation on Certain Lenders. No initial Commercial Facility Lender or Transferee Lender shall be a hedge fund or private equity fund, provided that the limitation in this Section 33.6 shall not apply to any Transferee Lender that acquires its rights and interests under the Finance Documents pursuant to a Transfer Certificate executed while an Event of Default is continuing.
33.7 Confidentiality.
33.8
(a) Neither the Administrative Agent nor any Lender shall disclose any Confidential Information to any Person without the consent of the Obligors, other than (i) subject to an agreement to comply with the provisions of this paragraph, to the Administrative Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors, (ii) subject to an agreement to comply with the provisions of this paragraph, a prospective assignee, substitute or transferee or to any other Person who may propose entering into contractual relations with such Lender in relation to this Agreement (such Person together with any prospective assignee, substitute or transferee being hereinafter described as the “Prospective Assignee”) and participants, and then only on a confidential basis, (iii) as required by any law, rule or regulation or judicial process, (iv) as requested or required by any state, Federal or foreign authority or examiner (including the National Association of Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender, (v) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential
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Information relating to the Obligors received by it from such Lender, (vi) in connection with any litigation or proceeding to which the Administrative Agent or such Lender or any of its Affiliates may be a party or (vii) in connection with the exercise of any right or remedy under this Agreement or any other Finance Document.
(b) Notwithstanding anything in sub-clause (a) above to the contrary, GIEK and the GIEK Facility Lender may publicize key information about the transaction, inter alia, information relating to:
(i) the Borrowers’ and Builder’s names and respective countries of residence;
(ii) the date of this Agreement;
(iii) the loan and guarantee amounts available hereunder; and
(iv) the type of vessels financed hereunder.
34 | LAW AND JURISDICTION |
34.1 GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING HEREUNDER OR RELATED HERETO, AND ALL ISSUES CONCERNING THE RELATIONSHIP OF THE PARTIES HERETO AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES (WITH THE EXCEPTION OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
34.2 JURISDICTION.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK COUNTY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER FINANCE DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER FINANCE DOCUMENTS IN THE COURTS OF ANY JURISDICTION.
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(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER FINANCE DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT;
(c) TO THE EXTENT THAT ANY OBLIGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH OBLIGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS TO WHICH IT IS A PARTY.
34.3 Process agent. Each Obligor irrevocably agrees to maintain an agent for service of process (reasonably satisfactory to the Administrative Agent) located in New York City and shall furnish to the Administrative Agent evidence on or before the Closing Date and thereafter from time to time that such agent shall have accepted such appointment for a period of time ending no earlier than one (1) year after the Final Repayment Date. Each Obligor irrevocably appoints C T Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, U.S.A., as its authorized agent (and any successor agent, the “Process Agent”) on which any and all legal process may be served in any action, suit or proceeding brought in any New York state or federal court. Each Obligor irrevocably agrees that service of process in respect of it upon the Process Agent, together with written notice of such service given to it in the manner provided for notices in Section 31, shall be deemed to be effective service of process upon it in any such action, suit or proceeding. Each Obligor agrees that the failure of the Process Agent to forward to it any such service shall not impair or affect the validity of such service or any judgment rendered in any such action, suit or proceeding based thereon. If for any reason the Process Agent named above shall cease to be available to act as such, each Obligor agrees to irrevocably appoint a replacement process agent in New York City, as its authorized agent for service of process, on the terms and for the purposes specified in this Section 34.3. Nothing in this Agreement or any other Finance Document will affect the right of any party hereto to serve process in any other manner permitted by applicable law or to obtain jurisdiction over any party or bring actions, suits or proceedings against any party in such other jurisdictions, and in such matter, as may be permitted by applicable law.
34.4 Finance Party rights unaffected. Nothing in this Section 34 shall exclude or limit any right which any Finance Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
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34.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ANY APPLICABLE LAWS, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY FINANCE PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
34.6 Conflicting Provisions. In the event of any conflict between this Agreement and any other Finance Document, this Agreement shall prevail.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Senior Secured Credit Facility Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
PACIFIC SHARAV S.ÀR.L. | PACIFIC DRILLING VII LIMITED | |||||||
By: | /s/ Xxxx Vleghert |
By: | /s/ Xxxxxxxxx X. Xxxxxxx | |||||
Name: | Xxxx Vleghert | Name: | Xxxxxxxxx X. Xxxxxxx | |||||
Title: | Manager | Title: | Director | |||||
PACIFIC DRILLING S.A. | ||||||||
By: | /s/ Xxxxxxxxx X. Xxxxxxx |
|||||||
Name: | Xxxxxxxxx X. Xxxxxxx | |||||||
Title: | Director |
THE AGENTS AND CERTAIN FINANCE PARTIES
DNB BANK ASA, NEW YORK BRANCH, as Administrative Agent, as Security Agent, as GIEK Facility Agent, as Account Bank, as Mandated Lead Arranger, as Global ECA Coordinator | CITIBANK, N.A., as Mandated Lead Arranger, as Global ECA Coordinator, as Syndication Agent, as Bookrunner, as Structuring Bank and as Documentation Agent | |||||||
By: | /s/ Xxxxxxx Xxxxxxxxx |
By: | /s/ Xxx Xxxxxxx | |||||
Name: | Xxxxxxx Xxxxxxxxx | Name: | Xxx Xxxxxxx | |||||
Title: | Senior Vice President | Title: | Vice President | |||||
By: | /s/ Florianne Xxxxx |
|||||||
Name: | Florianne Xxxxx | |||||||
Title: | Vice President | |||||||
DNB MARKETS INC., as Structuring Bank, as Bookrunner and as Syndication Agent | ABN AMRO CAPITAL USA LLC, as Mandated Lead Arranger and Bookrunner | |||||||
By: | /s/ Torwar Xxxxxx |
By: | /s/ Xxxxxxx Xxxxxx | |||||
Name: | Torwar Xxxxxx | Name: | Xxxxxxx Xxxxxx | |||||
Title: | Managing Director | Title: | Managing Director | |||||
By: | /s/ Xxxxxx X. Xxxxxxxxx |
By: | /s/ Xxxxxxx Xxxxxxxxx | |||||
Name: | Xxxxxx X. Xxxxxxxxx | Name: | Xxxxxxx Xxxxxxxxx | |||||
Title: | Managing Director | Title: | ||||||
ING CAPITAL LLC, as Mandated Lead Arranger and Bookrunner | SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.), as Mandated Lead Arranger and Bookrunner | |||||||
By: | /s/ Petra van Woensel |
By: | /s/ Xxxxxxx Xxxxxxxx | |||||
Name: | Petra van Woensel | Name: | Xxxxxxx Kongstrud | |||||
Title: | Director | Title: | ||||||
By: | /s/ Per Xxxx Xxxxxx-Xxxxxxxxxxx | |||||||
Name: | Per Xxxx Xxxxxx-Xxxxxxxxxxx | |||||||
Title: | ||||||||
STANDARD CHARTERED BANK PLC, as Mandated Lead Arranger and Bookrunner | ||||||||
By: | /s/ Xxxxxxx Xxxxxxx |
|||||||
Name: | Xxxxxxx Xxxxxxx | |||||||
Title: | Regional Head, Structured Finance |
GIEK FACILITY LENDER
EKSPORTKREDITT NORGE AS, as GIEK Facility Lender | ||
By: | /s/ Jostein Djupvik | |
Name: | Jostein Djupvik | |
Title: | Senior Vice President – Lending |
COMMERCIAL FACILITY LENDERS
DNB BANK ASA, GRAND CAYMAN BRANCH, as Lender | CITIBANK, N.A., LONDON BRANCH, as Lender | |||||||
By: | /s/ Xxxxxxx Xxxxxxxxx |
By: | /s/ Xxxxxx Xxxxxxx | |||||
Name: | Xxxxxxx Xxxxxxxxx | Name: | Xxxxxx Xxxxxxx | |||||
Title: | Senior Vice President | Title: | Vice President & Director | |||||
By: | /s/ Florianne Xxxxx |
|||||||
Name: | Florianne Xxxxx | |||||||
Title: | Vice President | |||||||
ABN AMRO CAPITAL USA LLC, as Lender | CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK, as Lender | |||||||
By: | /s/ Xxxxxxx Xxxxxx |
By: | /s/ Xxxx X. Xxxxxxx | |||||
Name: | Xxxxxxx Xxxxxx | Name: | Xxxx X. Xxxxxxx | |||||
Title: | Managing Director | Title: | Attorney-in-Fact | |||||
By: | /s/ Xxxxxxx Xxxxxxxxx |
|||||||
Name: | Xxxxxxx Xxxxxxxxx | |||||||
Title: | ||||||||
CRÉDIT INDUSTRIEL ET COMMERCIAL, as Lender | ING CAPITAL LLC, as Lender | |||||||
By: | /s/ Xxxxxx XxXxxx |
By: | /s/ Petra van Woensel | |||||
Name: | Xxxxxx XxXxxx | Name: | Petra van Woensel | |||||
Title: | Managing Director | Title: | Director | |||||
By: | /s/ Xxxx Xxxxxx |
|||||||
Name: | Xxxx Xxxxxx | |||||||
Title: | Vice President | |||||||
NIBC BANK N.V., as Lender | SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL.), as Lender | |||||||
By: | /s/ Saskia Hovers |
By: | /s/ Xxxxxxx Xxxxxxxx | |||||
Name: | Saskia Hovers | Name: | Xxxxxxx Kongstrud | |||||
Title: | Managing Director | Title: | ||||||
By: | /s/ Xxxxxx van der Putten |
By: | /s/ Per Xxxx Xxxxxx-Xxxxxxxxxxx | |||||
Name: | Xxxxxx van der Putten | Name: | Per Xxxx Xxxxxx-Xxxxxxxxxxx | |||||
Title: | Associate Director | Title: |
STANDARD CHARTERED BANK PLC, as Lender | ||
By: | /s/ Xxxxxxx Xxxxxxx | |
Name: | Xxxxxxx Xxxxxxx | |
Title: | Regional Head, Structured Finance |
SCHEDULE 1
COMMERCIAL FACILITY LENDERS AND COMMERCIAL FACILITY LOAN COMMITMENTS
Lender and Lending Office | Commitment (US Dollars) |
|||
Citibank, N.A., London Branch Citigroup Centre Canada Square Xxxxxx Xxxxx Xxxxxx X00 0XX Fax: + 00 00 0000 0000 |
$ | 67,500,000 | ||
DNB Bank ASA, Grand Cayman Branch 000 Xxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Email: xxxxxxxxx.xxxxx@xxx.xx xxxxxxx.xxxxxxxxx@xxx.xx |
$ | 67,500,000 | ||
ABN AMRO Capital USA LLC 000 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Fax: x0 000 000 0000 FAO: Xxxxxxx Xxxxxxxxx |
$ | 67,500,000 | ||
Crédit Agricole Corporate & Investment Bank 0, xxxx xx Xxxxxxxxx Xxxx Xxxxxx 92 920 Paris La Defense France Fax: + 00 0 00 00 00 00 |
$ | 50,000,000 | ||
Crédit Industriel et Commercial 000 Xxxxxxx Xxxxxx 00xx Xxxxx Xxx Xxxx, XX 00000 Fax: x0 000-000-0000 Attn: Loan Servicing Department |
$ | 20,000,000 | ||
ING Capital LLC 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Fax: x0 000-000-0000 |
$ | 67,500,000 |
Schedule 1 - 1
Lender and Lending Office | Commitment (US Dollars) |
|||
NIBC Bank X.X. Xxxxxxxxxxxxx 0 0000 XX Xxx Xxxxx Xxx Xxxxxxxxxxx Fax: + 00 (0)00 000 00 00 |
$ | 25,000,000 | ||
Standard Chartered Bank plc Loan Processing Xxxx Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx - Xxxxxx, XX 00000 Tel: x0 (000) 000-0000 Fax: x0 (000) 000-0000 |
$ | 67,500,000 | ||
Skandinaviska Enskilda Xxxxxx XX (publ.) SEB Merchant Banking Filipstad Brygge 1 X.X Xxx 0000 Xxxx XX-0000 Xxxx |
$ | 67,500,000 |
Schedule 1 - 2
SCHEDULE 2
DRAWDOWN NOTICE
To: | DNB BANK ASA, NEW YORK BRANCH, as Administrative Agent |
[ ]
[ ]
[ ]
[ ]
[ ]
Attention: [ ] [Date]
DRAWDOWN NOTICE
1. | We refer to the senior secured credit facility agreement (the “Loan Agreement”) dated [—] 20 and made between ourselves, as Borrowers, the Lenders referred to therein, the Mandated Lead Arrangers referred to therein, yourselves as Administrative Agent and the Security Agent referred to therein in connection with a facility of up to [US$1,000,000,000]. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2. | We request to borrow [two (2) Advance(s)] as follows: |
(a) Amount: US$[—] comprising;
(i) | $[—] in respect of the GIEK Facility Advance; and |
(ii) | $[—] in respect of the Commercial Facility Advance. |
(b) This GIEK Facility Advance shall be a [GIEK Facility Meltem Advance] / [GIEK Facility Sharav Advance];
(c) This Commercial Facility Advance shall be a [Commercial Facility Meltem Advance] / [Commercial Facility Sharav Advance];
(d) Drawdown Date: [—];
(e) Payment instructions: account of [—] and numbered [—] with [—] of [—].
3. | The duration of each Interest Period shall be [three (3) months] [six (6) months]. |
4. | The proceeds of the requested Advances shall be used for the following purposes: [—]. |
5. | On the date of this Drawdown Notice, the vessel Pacific [Sharav] / [Meltem] [is subject to the Satisfactory Drilling Contract described as that certain [—] dated [—] by and between [—]] / [is not subject to a Satisfactory Drilling Contract]. |
6. | On the date of this Drawdown Notice, the Minimum Equity Threshold is [ / ] debt/equity. Annex A attached hereto and made a part hereof reflects the method by which such Minimum Equity Threshold has been calculated as of the date hereof. |
Schedule 2 - 1
7. | The aggregate Fair Market Value of the vessels that are collateral for the PFA and the Collateral Vessels as of the Drawdown Date is $[—]. |
8. | The aggregate amount outstanding under the PFA and the Loan Agreement as of the Drawdown Date is $[—], which amount is less than o |