Exhibit 4.1
DATED 2001
------------------------
GOLAR LNG 2215 CORPORATION
(as borrower)
- and -
LLOYDS TSB BANK PLC
(as lender)
----------------------------------------
US$180,000,000 SECURED
LOAN
FACILITY AGREEMENT
Hull No. 2215
----------------------------------------
XXXXXXXXXX XXXXXXX
Xxx Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx XX0X 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
Ref: 748
CONTENTS
Page
1 Definitions and Interpretation...................................3
2 The Loan and its Purpose........................................15
3 Conditions Precedent and Subsequent.............................16
4 Representations and Warranties..................................22
5 Repayment and Prepayment........................................24
6 Funding of Balloon and Interest.................................25
7 Fees............................................................30
8 Security Documents..............................................30
9 Covenants.......................................................31
10 Cash and Earnings Accounts......................................35
11 Events of Default...............................................36
12 Set-Off and Lien................................................40
13 Assignment and Sub-Participation................................41
14 Payments, Mandatory Prepayment, Reserve
Requirements and Illegality...................................41
15 Communications..................................................44
16 General Indemnities.............................................45
17 Miscellaneous...................................................46
18 Law and Jurisdiction............................................49
Schedule 1...................................................50
Annuity and Interest Rates...................................50
Schedule 2...................................................51
Calculation of the Mandatory Cost............................51
Page 2
LOAN AGREEMENT
Dated: 2001
BETWEEN:-
(1) GOLAR LNG 2215 CORPORATION, a company incorporated according to the law
of the Republic of Liberia, with registered office at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx ("the Borrower"); and
(2) LLOYDS TSB BANK PLC, acting through its Ship Finance Department at XX
Xxx 000. 0-0 Xxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx ("the Bank").
WHEREAS:-
(A) On the terms and subject to the conditions of the Building Contract,
the Builder has agreed to construct the Vessel for, and deliver the
Vessel to, the Borrower.
(B) On delivery of the Vessel by the Builder to the Borrower, the Borrower
intends to register the Vessel under the flag of the Republic of
Liberia.
(C) The Bank has agreed to advance to the Borrower an aggregate amount not
exceeding one hundred and eighty million Dollars ($180,000,000) in
order to assist the Borrower in financing and/or refinancing the
purchase price of the Vessel pursuant to the Building Contract and
pre-delivery costs associated therewith and approved by the Bank
IT IS AGREED as follows:-
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:-
1.1.1 "the Accounts" means the Cash Account and the Earnings
Account.
1.1.2 "the Account Security Deeds" means the Account Security
Deeds referred to in Clause 8.1.3.
1.1.3 "the Address for Service" means Golar Management Limited,
00 Xxxxx Xxxx, Xxxxxx X00 0XX or, in relation to any of the
Security Parties, such other address in England and Wales
as that Security Party may from time to time designate by
no fewer than ten days' written notice to the Bank.
1.1.4 "the Administration" has the meaning given to it in
paragraph 1.1.3 of the ISM Code.
1.1.5 "the Advance Date", in relation to any Drawing, means the
date on which that Drawing is advanced by the Bank to the
Borrower pursuant to Clause 2.
Page 3
1.1.6 "the Assignment" means the deed of assignment of the
Insurances, Earnings, Charter Rights and Requisition
Compensation referred to in Clause 8.2.2.
1.1.7 "the Availability Termination Date" means 30 June 2003 or
such later date as the Bank may in its discretion agree,
such agreement not to be unreasonably withheld provided
that the Charter and the Refund Guarantee shall remain in
full force and effect on the date such agreement is given
and that they will remain in full force and effect for the
duration of the extended period.
1.1.8 "Balloon" shall have the meaning given to it in Clause 5.1.
1.1.9 "Break Costs" means all costs, losses, premiums or
penalties incurred by the Bank as shall be conclusively
certified by the Bank (save in the case of manifest error)
in the circumstances contemplated by Clause 16.4, or as a
result of it receiving any prepayment of all or any part of
the Loan (whether pursuant to Clause 5 or otherwise), or
any other payment under or in relation to the Security
Documents on a day other than the due date for payment of
the sum in question, and includes (without limitation) any
losses or costs incurred in liquidating or re-employing
deposits from third parties acquired to effect or maintain
the Loan, and any liabilities, expenses or losses incurred
by the Bank in terminating or reversing, or otherwise in
connection with, any interest rate and/or currency swap,
transaction or arrangement entered into by the Bank to
hedge any exposure arising under this Agreement, or in
terminating or reversing, or otherwise in connection with,
any open position arising under this Agreement.
1.1.10 "the Builder" means Daewoo Shipbuilding & Marine
Engineering Co. Ltd of the Republic of Korea.
1.1.11 "the Building Contract" means the contract dated 2 May 2001
(as amended by a novation agreement dated 28 May 2001) on
the terms and subject to the conditions of which the
Builder has agreed to construct the Vessel for, and deliver
the Vessel to, the Borrower as the same may be amended,
novated or supplemented from time to time.
Page 4
1.1.12 "the Building Contract Assignment" means the deed of
assignment of Building Contract and Refund Guarantee
referred to in Clause 8.1.1.
1.1.13 "Business Day" means a day on which banks are open for the
transaction of business of the nature contemplated by this
Agreement (and not authorised by law to close) in Xxx Xxxx,
Xxxxxx Xxxxxx xx Xxxxxxx; Xxxxxx, Xxxxxxx and any other
financial centre which the Bank may consider appropriate
for the operation of the provisions of this Agreement.
1.1.14 "Cash Account" means the bank account to be opened in the
name of the Borrower with the Bank and designated "LTSB Re:
Golar LNG 2215 Corporation - Cash Account -00000000".
1.1.15 "Charter" means the time charterparty in respect of the
Vessel for a term of not less than twenty (20) years
entered or to be entered into between the Borrower and the
Charterer or, as the context may require, the bareboat
charter replacing the time charter in accordance with the
provisions of the time charter as amended, novated,
supplemented or replaced from time to time.
1.1.16 "Charterer" means BG Asia Pacific Pte. Limited of 00
Xxxxxxxxxx Xxxxxx, #00-00 XX Xxxxxx (Xxxxx Xxxxx),
Xxxxxxxxx 000000, being a wholly-owned subsidiary of BG
Group plc.
1.1.17 "Charter Rights" means all rights and benefits accruing to
the Borrower under or arising out of the Charter and not
forming part of the Earnings.
1.1.18 "Commitment Commission" means the commitment commission to
be paid by the Borrower to the Bank pursuant to Clause 7.1.
1.1.19 a "Communication" means any notice, approval, demand,
request or other communication from one party to this
Agreement to the other.
1.1.20 "the Communications Address" means c/o Golar Management
Limited, 00 Xxxxx Xxxx, Xxxxxx X00 0XX (fax no: 000 0000
8601) marked for the attention of the Finance Department.
Page 5
1.1.21 "the Company" means, at any given time, the company
responsible for the Vessel's compliance with the ISM Code
pursuant to paragraph 1.1.2 of the ISM Code.
1.1.22 "Currency of Account" means, in relation to any payment to
be made to the Bank under or pursuant to any of the
Security Documents, the currency in which that payment is
required to be made by the terms of the relevant Security
Document.
1.1.23 "Default Rate" means the rate being the aggregate of the
Margin and two per centum (2%) per annum above the cost to
the Bank of obtaining funds in amount similar to the amount
of the Indebtedness or any relevant part of the
Indebtedness for such periods as the Bank shall determine
in its discretion.
1.1.24 "the Delivery Advance Date" means the Advance Date of the
Drawing relating to the Delivery Instalment.
1.1.25 "the Delivery Instalment" means the Instalment payable on
delivery of the Vessel by the Builder to the Borrower.
1.1.26 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
1.1.27 "Dollars" and "$" each means available and freely
transferable and convertible funds in lawful currency of
the United States of America.
1.1.28 "Drawdown Notice" means a notice complying with Clause 2.3.
1.1.29 "Drawing" means a part of the Loan advanced by the Bank to
the Borrower in accordance with Clause 2.3.
1.1.30 "Earnings" means all hires, freights, pool income and other
sums payable to or for the account of the Borrower in
respect of the Vessel including (without limitation) all
remuneration for salvage and towage services, demurrage and
detention moneys, contributions in general average,
compensation in respect of any requisition for hire, and
damages and other payments (whether awarded by any court or
arbitral tribunal or by agreement or otherwise) for breach,
termination or variation of any contract for the operation,
employment or use of the Vessel.
Page 6
1.1.31 "the Earnings Account" means a bank account to be opened in
the name of the Borrower with the Bank and designated
"Golar LNG 2215 Corporation - Earnings Account - 00000000".
1.1.32 "Encumbrance" means any mortgage, charge (fixed or
floating), pledge, lien, assignment, hypothecation,
preferential right, option, title retention or trust
arrangement or any other agreement or arrangement which has
the effect of creating security or payment priority.
1.1.33 "Event of Default" means any of the events set out in
Clause 11.2.
1.1.34 "Environmental Affiliate" means any agent or employee of
the Borrower or any other Relevant Party or any person
having a contractual relationship with the Borrower or any
other Relevant Party in connection with any Relevant Ship
or its operation or the carriage of cargo and/or passengers
thereon and/or the provision of goods and/or services on or
from a Relevant Ship.
1.1.35 "Environmental Approval" means any consent, authorisation,
licence or approval of any governmental or public body or
authorities or courts applicable to any Relevant Ship or
its operation or the carriage of cargo and/or passengers
thereon and/or the provisions of goods and/or services on
or from a Relevant Ship required under any Environmental
Law.
1.1.36 "Environmental Claim" means any and all enforcement,
clean-up, removal or other governmental or regulatory
actions or orders instituted or completed pursuant to any
Environmental Law or any Environmental Approval together
with claims made by any third party relating to damage,
contribution, loss or injury, resulting from any actual or
threatened emission, spill, release or discharge of a
Material of Environmental Concern from any Relevant Ship.
1.1.37 "Environmental Laws" means all national, international and
state laws, rules, regulations, treaties and conventions
applicable to any Relevant Ship pertaining to the pollution
or protection of human health or the environment including,
without limitation, the carriage of Materials of
Environmental Concern and actual or threatened emissions,
spills, releases or discharges of Materials of
Environmental Concern. 1.1.38 "Excess Amount" means that
part of the Loan outstanding from time to time and not
forming part of the Balloon.
Page 7
1.1.39 "the Facility Period" means the period beginning on the
date of this Agreement and ending on the date when the
whole of the Indebtedness has been repaid in full and the
Borrower has ceased to be under any further actual or
contingent liability to the Bank under or in connection
with the Security Documents.
1.1.40 "the Guarantee" means the guarantee and indemnity of the
Guarantor referred to in Clause 8.1.2.
1.1.41 "the Guarantor" means Golar LNG Limited, a company
incorporated according to the laws of Bermuda with its
registered office at Par-la-Ville Place, Fourth Floor, 00
Xxx-xx-Xxxxx Xxxx, Xxxxxxxx XX00, Xxxxxxx and/or (where the
context permits) any other person or company who shall at
any time during the Facility Period give to the Bank a
guarantee and/or indemnity for the repayment of all or part
of the Indebtedness.
1.1.42 "the Indebtedness" means the Loan; all other sums of any
nature (together with all interest on any of those sums)
which from time to time may be payable by the Borrower to
the Bank pursuant to the Security Documents; any damages
payable as a result of any breach by the Borrower of any of
the Security Documents; and any damages or other sums
payable as a result of any of the obligations of the
Borrower under or pursuant to any of the Security Documents
being disclaimed by a liquidator or any other person, or,
where the context permits, the amount thereof for the time
being outstanding.
1.1.43 "Instalment" means an instalment of the purchase price of
the Vessel payable by the Borrower pursuant to the Building
Contract.
1.1.44 "Insurances" means all policies and contracts of insurance
(including all entries in protection and indemnity or war
risks associations) which are from time to time taken out
or entered into in respect of or in connection with the
Vessel or her increased value or the Earnings and (where
the context permits) all benefits thereof, including all
claims of any nature and returns of premium.
1.1.45 "Interest Payment Date" means each date for the payment of
interest in accordance with Clause 6.
Page 8
1.1.46 "Interest Period" means each interest period as determined
pursuant to Clause 6.
1.1.47 "the ISM Code" means the International Management Code for
the Safe Management of Ships and for Pollution Prevention,
as adopted by the Assembly of the International Maritime
Organisation on 4 November 1993 by resolution A.741 (18)
and incorporated on 19 May 1994 as chapter IX of the Safety
of Life at Sea Convention 1974.
1.1.48 "law" means any law, statute, treaty, convention,
regulation, instrument or other subordinate legislation or
other legislative or quasi-legislative rule or measure, or
any order or decree of any government, judicial or public
or other body or authority, or any directive, code of
practice, circular, guidance note or other direction issued
by any competent authority or agency (whether or not having
the force of law).
1.1.49 "LIBOR" means the rate displayed as the British Bankers'
Association Interest Settlement Rate on any information
service selected by the Bank on which that rate is
displayed, for deposits in Dollars of amounts equal to the
amount of the Loan or any relevant part of the Loan for a
period equal in length to the relevant Interest Period, or
(if the Bank is for any reason unable to ascertain that
rate) the rate (rounded upwards to the nearest whole
multiple of one-sixteenth of one per centum) at which
deposits in Dollars of amounts comparable to the amount of
the Loan (or any relevant part of the Loan) are offered to
the Bank in the London Interbank market for a period equal
in length to the relevant Interest Period.
1.1.50 "the Loan" means the aggregate amount from time to time
advanced by the Bank to the Borrower pursuant to Clause 2
or, where the context permits, the amount advanced and for
the time being outstanding.
Page 9
1.1.51 "the Managers" means Golar Management Limited, or such
other commercial and/or technical managers of the Vessel
nominated by the Borrower as the Bank may in its discretion
approve.
1.1.52 "Mandatory Cost" means the cost imputed to the Bank of
compliance with the mandatory liquid asset requirements of
the Bank of England and/or the banking supervision or other
costs imposed by the Financial Services Authority,
determined in accordance with the Schedule.
1.1.53 "the Margin" means:-
(a) for the period commencing on the first Advance Date
and ending on the Delivery Advance Date (the last
date excluded), one point four five per centum
(1.45%) per annum; and
(b) for the period commencing on the Delivery Advance
Date and ending on the last date of the Facility
Period, the percentage per annum determined by
reference to the Standard and Poors ("S&P") rating
of the Charterer from time to time as more
particularly set out in the table below:-
S &P rating Margin (%) per annum
------------------------- -----------------------
A 1.125
------------------------- -----------------------
BBB + 1.15
------------------------- -----------------------
BBB 1.20
------------------------- -----------------------
BBB - 1.25
------------------------- -----------------------
BB 1.40
------------------------- -----------------------
B 1.50
Page 10
Provided that if, at any time after the Delivery
Advance Date, the rating for the Charterer shall at
any time fall below an S&P rating of "B", the Bank
and the Borrower shall, in the Bank's option, agree
a new higher rate for the Margin.
1.1.54 "Material of Environmental Concern" means and include
pollutants, contaminants, toxic substances, oil as defined
in the United States Oil Pollution Act of 1990 and all
hazardous substances as defined in the United States
Comprehensive Environmental Response, Compensation and
Liability Xxx 0000.
1.1.55 "the Maximum Loan Amount" means one hundred and eighty
million Dollars ($180,000,000).
1.1.56 "the Mortgagees' Insurances" means all policies and
contracts of mortgagees' interest insurance, mortgagees'
additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Bank in
relation to the Vessel, the cost of which shall, for the
avoidance of doubt, be for the Borrower's account.
1.1.57 "the Mortgage" means the first preferred mortgage referred
to in Clause 8.2.1.
1.1.58 "Operating Expenses" means expenses properly and reasonably
incurred by the Borrower in connection with the operation,
employment, maintenance, repair and insurance of the
Vessel.
1.1.59 "Permitted Encumbrance" means any Encumbrance which has the
prior written approval of the Bank, or any Encumbrance
arising either by operation of law or in the ordinary
course of the business of the Borrower which is promptly
discharged.
1.1.60 "the Pledgor" means the Guarantor in its capacity as sole
legal and beneficial shareholder of the Borrower.
1.1.61 "Potential Event of Default" means any event which, with
the giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an
Event of Default.
1.1.62 "Pounds", "Sterling" and "(pound)" each means available and
freely transferable and convertible funds in lawful
currency of the United Kingdom.
1.1.63 "Proceedings" means any suit, action or proceedings begun
by the Bank arising out of or in connection with the
Security Documents.
Page 11
1.1.64 "Quiet Enjoyment Letter" means a letter addressed by the
Bank to the Charterer in a form acceptable to the Bank.
1.1.65 "the Refund Guarantee" means irrevocable letter of
guarantee number M0902-107-LG-00057 issued by the Refund
Guarantor in favour of the Borrower pursuant to the
Building Contract on 19 July 2001.
1.1.66 "the Refund Guarantor" means the Export-Import Bank of
Korea.
1.1.67 "Relevant Party" means the Borrower and any other Security
Party.
1.1.68 "Relevant Ship" means the Vessel and any other vessel from
time to time (whether before or after the date of this
Agreement) owned, managed or crewed by or chartered to, any
Relevant Party.
1.1.69 "Repayment Date" means the date for payment of any
Repayment Instalment in accordance with Clause 5.
1.1.70 "Repayment Instalment" means any instalment of the Loan to
be repaid by the Borrower pursuant to Clause 5.
1.1.71 "Requisition Compensation" means all compensation or other
money which may from time to time be payable to the
Borrower as a result of the Vessel being requisitioned for
title or in any other way compulsorily acquired (other than
by way of requisition for hire).
1.1.72 "the Security Documents" means this Agreement, the Building
Contract Assignment, the Guarantee, the Share Pledge, the
Mortgage, the Assignment, the Account Security Deed, the
Master Agreement and any other Credit Support Documents or
(where the context permits) any one or more of them, and
any other agreement or document which may at any time be
executed by any person as security for the payment of all
or any part of the Indebtedness.
1.1.73 "Security Parties" means the Borrower, the Guarantor, the
Pledgor, and any other person or company who may at any
time during the Facility Period be liable for, or provide
security for, all or any part of the Indebtedness,
including, for the avoidance of doubt, the Charterer if the
Charter is at any time a bareboat charter and "Security
Party" means any one of them.
Page 12
1.1.74 "the Share Pledge" means the pledge of the issued share
capital of the Borrower referred to in Clause 8.1.4.
1.1.75 "SMC" means a valid safety management certificate issued
for the Vessel by or on behalf of the Administration
pursuant to paragraph 13.4 of the ISM Code.
1.1.76 "SMS" means a safety management system for the Vessel
developed and implemented in accordance with the ISM Code
and including the functional requirements, duties and
obligations required by the ISM Code.
1.1.77 "Taxes" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related
interest, fines, surcharges and penalties) and any
restrictions or conditions resulting in any charge, other
than taxes on the overall net income of the Bank, and "Tax"
and "Taxation" shall be interpreted accordingly.
1.1.78 "Total Loss" means:-
(a) an actual, constructive, arranged, agreed or
compromised total loss of the Vessel; or
(b) the requisition for title or compulsory acquisition
of the Vessel by or on behalf of any government or
other authority (other than by way of requisition
for hire); or
(c) the capture, seizure, arrest, detention or
confiscation of the Vessel, unless the Vessel is
released and returned to the possession of the
Borrower within one month after the capture,
seizure, arrest, detention or confiscation in
question.
1.1.79 "the Tripartite Agreement" means the tripartite agreement
attached to the Quiet Enjoyment Letter.
1.1.80 "the Vessel" means the LNG tanker having the Builder's hull
number 2215 currently under construction by the Builder for
the Borrower pursuant to the Building Contract and, on
delivery to the Borrower, intended to be registered under
the flag of the Republic of Liberia in the ownership of the
Borrower and everything now or in the future belonging to
her on board and ashore.
Page 13
1.2 Interpretation
In this Agreement:-
1.2.1 words denoting the plural number include the singular and
vice versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities
and vice versa;
1.2.3 references to Recitals, Clauses and Appendices are
references to recitals and clauses of, and appendices to,
this Agreement;
1.2.4 references to this Agreement include the Recitals and the
Appendices;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and
shall be ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation,
to all or any of the Security Documents) are, unless the
context otherwise requires, references to that document as
amended, supplemented, novated or replaced from time to
time;
1.2.7 references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from
time to time amended, replaced or re-enacted;
1.2.8 references to the Bank include its successors, transferees
and assignees;
1.2.9 references to times of day are to London time.
1.3 Offer letter
This Agreement supersedes the terms and conditions contained in
any correspondence relating to the subject matter of this
Agreement exchanged between the Bank and the Borrower or their
representatives prior to the date of this Agreement.
Page 14
2 The Loan and its Purpose
2.1 Agreement to lend Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of the
Security Documents, the Bank agrees to advance to the Borrower an
aggregate amount not exceeding the Maximum Loan Amount to be used
by the Borrower for the purpose referred to in Recital (C).
2.2 Drawings Subject to satisfaction by the Borrower of the conditions
set out in Clause 3.1 and Clause 3.2 or 3.3 (as appropriate), and
subject to Clause 2.3, the Loan shall be advanced to the Borrower
in no more than ten (10) Drawings (but excluding Drawings utilised
to pay any interest accruing prior to delivery of the Vessel) (or
such other number as the Bank, in its discretion, may agree) in
each case by the Bank transferring the amount of the Drawing in
accordance with the Borrower's instructions by such method of
funds transfer as the Bank and the Borrower shall agree.
2.3 Advance of Drawings Each Drawing shall be advanced in Dollars on a
Business Day, provided that the Borrower shall have given to the
Bank not fewer than one Business Day's notice in writing
materially in the form set out in Appendix A of the required
Advance Date. Each Drawdown Notice once given shall be irrevocable
and shall constitute a warranty by the Borrower that:-
2.3.1 all conditions precedent to the advance of the Drawing
requested in that Drawdown Notice will have been satisfied
on or before the Advance Date requested;
2.3.2 no Event of Default or Potential Event of Default will then
have occurred;
2.3.3 no Event of Default or Potential Event of Default will
result from the advance of the Drawing in question; and
2.3.4 there has been no material adverse change in the business,
affairs or financial condition of any of the Security
Parties from that pertaining at the date of this Agreement.
2.4 Restrictions on Drawings No more than one Drawing may be requested
in respect of each Instalment, and no Drawing in respect of an
Instalment shall be in an amount exceeding the amount due and
payable by the Borrower to the Builder pursuant to the Builder's
invoice in respect of the Instalment in question (and any
additional costs and expenses duly authorised by the Bank), as
evidenced by the copy invoice delivered by the Borrower to the
Bank pursuant to Clause 3.2 or 3.3.
Page 15
2.5 Availability Termination Date The Bank shall be under no
obligation to advance all or any part of the Loan after the
Availability Termination Date.
2.6 Application of Loan Without prejudice to the obligations of the
Borrower under this Agreement, the Bank shall not be obliged to
concern itself with the application by the Borrower of any Drawing
or the Loan.
2.7 Loan and control accounts The Bank will open and maintain such
loan and control accounts for the Borrower as the Bank shall in
its discretion consider necessary or desirable.
3 Conditions Precedent and Subsequent
3.1 Conditions Precedent - General Before the Bank shall have any
obligation to advance any part of the Loan, the Borrower shall
deliver or cause to be delivered to or to the order of the Bank
the following documents and evidence:-
3.1.1 Evidence of incorporation Such evidence as the Bank may
reasonably require that each Security Party was duly
incorporated in its country of incorporation and remains in
existence and, where appropriate, in good standing, with
power to enter into, and perform its obligations under,
those of the Security Documents to which it is, or is
intended to be, a party, including (without limitation) a
copy, certified by a director or the secretary of the
Security Party in question as true, complete, accurate and
unamended, of all documents establishing or limiting the
constitution of each Security Party.
3.1.2 Corporate authorities Fax copies of a resolution of the
directors of each Security Party and a resolution of the
shareholders of each Security Party other than the
Guarantor if required (together, where appropriate, with
signed waivers of notice of any directors' or shareholders'
meetings) approving, and authorising or ratifying the
execution of, those of the Security Documents to which that
Security Party is or is intended to be a party and all
matters incidental thereto.
3.1.3 Officer's certificate Fax copies of a certificate signed by
a duly authorised officer of each of the Security Parties
setting out the names of the directors, officers and
shareholders of that Security Party.
3.1.4 Power of attorney Fax copies of the notarially attested and
legalised power of attorney of each of the Security Parties
under which any documents are to be executed or
transactions undertaken by that Security Party.
Page 16
3.1.5 Building Contract and Refund Guarantee A photocopy,
certified as true, accurate and complete by a director or
the secretary of the Borrower, of (a) the Building
Contract, together (where appropriate) with such documents
as the Bank may reasonably require to evidence the
nomination of the Borrower as purchaser of the Vessel
pursuant to the Building Contract, and (b) the Refund
Guarantee, in each case together with all addenda,
amendments or supplements.
3.1.6 Charter A photocopy, certified as true, accurate and
complete by a director or the secretary of the Borrower of
the Charter together with all addenda, amendments or
supplements.
3.1.7 Quiet enjoyment letter The quiet enjoyment letter from the
Bank to the Charterer duly acknowledged by the Charterer.
3.1.8 Security Documents This Agreement and the Security
Documents referred to in Clause 8.1 together with all
notices and other documents required by any of them, duly
executed.
3.1.9 Notices of assignment The notices of assignment required by
the Building Contract Assignment duly executed by the
Borrower and acknowledged by the Builder and the Refund
Guarantor, as the context may require, together with
evidence of the authority of the persons signing the
acknowledgement on behalf of each of the Builder and the
Refund Guarantor.
3.1.10 The Pledge Documents If requested by the Bank, the Pledge
Documents required by the Share Pledge.
3.1.11 Process agent A letter from Golar Management Limited
accepting their appointment by each of the Security Parties
as agent for service of Proceedings pursuant to the
Security Documents.
3.1.12 Technical Report A report by a surveyor and/or other
technical adviser instructed by the Bank to review the
Building Contract and the Vessel's specifications
confirming that they are in all respects acceptable to the
Bank.
3.1.13 Evidence of payment Receipted invoices or such other
evidence satisfactory to the Bank that the Borrower has
paid the first two Instalments due under the Building
Contract.
3.2 Conditions Precedent - pre-delivery Before the Bank shall have any
obligation to advance to the Borrower any Drawing in respect of an
Instalment other than the Delivery Instalment or any Drawing in
respect of any other pre-delivery costs and expenses authorised by
the Bank, the Borrower shall, in addition to the documents and
evidence delivered pursuant to Clause 3.1, deliver or cause to be
delivered to the Bank the following additional documents and
evidence:-
Page 17
3.2.1 Invoice In the case of a Drawing relating to an Instalment,
a photocopy, certified as true, accurate and complete by a
director or the secretary of the Borrower, of the invoice
issued by the Builder evidencing the obligation of the
Borrower to pay the relevant Instalment to the Builder
pursuant to the Building Contract on a date no later than
the proposed Advance Date of the Drawing in question.
3.2.2 Evidence of costs and expenses In the case of a Drawing
relating to pre-delivery costs and expenses authorised by
the Bank other than an Instalment, such evidence as the
Bank may require, evidencing the obligation of the Borrower
to pay the pre-delivery costs and expenses in question on a
date no later than the proposed Advance Date of the Drawing
in question.
3.2.3 Drawdown Notice A Drawdown Notice.
3.3 Conditions Precedent - Delivery Instalment Before the Bank shall
have any obligation to advance to the Borrower a Drawing in
respect of the Delivery Instalment, the Borrower shall, in
addition to the documents and evidence delivered pursuant to
Clause 3.1, deliver or cause to be delivered to the Bank the
following additional documents and evidence:-.
3.3.1 Officer's certificate A certificate signed by a duly
authorised officer of each of the Security Parties dated no
later than five (5) Business Days before the Delivery
Advance Date confirming that none of the documents and
evidence delivered to the Bank pursuant to Clauses 3.1.1,
3.1.2 and 3.1.4 has been amended, modified or revoked in
any way since its delivery to the Bank.
3.3.2 Vessel documents Photocopies, certified as true, accurate
and complete by a director or the secretary of the
Borrower, of:-
(a) the invoice issued by the Builder and countersigned
by the Vessel's classification society evidencing
the obligation of the Borrower to pay the Delivery
Instalment to the Builder pursuant to the Building
Contract on a date no later than the proposed
Delivery Advance Date;
(b) the builder's certificate and/or xxxx of sale
transferring title in the Vessel to the Borrower
free of all encumbrances, maritime liens or other
debts;
Page 18
(c) the protocol of delivery and acceptance evidencing
the unconditional physical delivery of the Vessel by
the Builder to the Borrower pursuant to the Building
Contract;
(d) the declaration of warranty issued by the Builder to
the Borrower pursuant to the Building Contract;
(e) the management agreement between the Borrower and
the Managers relating to the Vessel;
(f) the Vessel's Safety Construction, Safety Equipment,
Safety Radio, Load Line and IOPP Certificates;
(g) the Vessel's Certificate of Financial Responsibility
issued pursuant to the United States Oil Pollution
Xxx 0000;
(h) the Vessel's SMC; and
(i) the Company's DOC;
in each case together with all addenda, amendments or
supplements.
3.3.3 Evidence of ownership A fax copy of the certificate(s) of
ownership and encumbrance (or equivalent) issued by the
Registrar of Ships (or equivalent official) at the Vessel's
existing port of registry confirming that the Vessel is on
the Delivery Advance Date owned by the Borrower and free of
registered Encumbrances.
3.3.4 Evidence of insurance Evidence that the Vessel is, or will
from the Delivery Advance Date be, insured in the manner
required by the Security Documents and that letters of
undertaking will be issued in the manner required by the
Security Documents, together with (if required by the Bank)
a written report regarding the Insurances by an insurance
adviser appointed by the Bank in a form acceptable to the
Bank.
3.3.5 Certificate of class A fax copy of an interim Certificate
of Class for hull and machinery confirming that the Vessel
is classed with the highest class applicable to vessels of
her type with Det norske Veritas or such other
classification society as may be acceptable to the Bank.
Page 19
3.3.6 Survey report A report by a surveyor and/or other technical
adviser instructed by the Bank to inspect the Vessel
confirming that the condition of the Vessel is in all
respects acceptable to the Bank.
3.3.7 Security Documents The Security Documents referred to in
Clause 8.2 together with all notices and other documents
required by any of them, duly executed and, in the case of
the Mortgage, registered with first priority through the
Registrar of Ships (or equivalent official) at the Vessel's
port of registry.
3.3.8 Drawdown Notice A Drawdown Notice.
3.3.9 Mandates Such duly signed forms of mandate, and/or other
evidence of opening of the Accounts, as the Bank may
require.
3.3.10 Legal opinions Confirmation satisfactory to the Bank that
all legal opinions required by the Bank will be given
substantially in the form required by the Bank.
3.4 Conditions Subsequent - first Drawing The Borrower undertakes to
deliver or to cause to be delivered to the Bank on, or as soon as
practicable after, the Advance Date of the first Drawing, the
following additional documents and evidence:-
3.4.1 Companies Act registrations Evidence that the prescribed
particulars of the Building Contract Assignment and the
Share Pledge have been delivered to the Registrar of
Companies of England and Wales within the statutory time
limit.
3.4.2 Originals or photocopies Originals or photocopies,
certified as true, accurate and complete by a director or
the secretary of the Borrower, of any document which was
supplied to the Bank as a fax copy pursuant to Clause 3.1.
3.5 Conditions Subsequent - Delivery Advance The Borrower undertakes
to deliver or to cause to be delivered to the Bank on, or as soon
as practicable after, the Delivery Advance Date, the following
additional documents and evidence:-
3.5.1 Evidence of registration Evidence of permanent registration
of the Vessel and the Mortgage (with first priority) with
the Registrar of Ships (or equivalent official) at the
Vessel's port of registry.
3.5.2 Letters of undertaking Letters of undertaking as required
by the Security Documents in form and substance acceptable
to the Bank.
Page 20
3.5.3 Legal opinions Such legal opinions as the Bank shall
require.
3.5.4 Companies Act registrations Evidence that the prescribed
particulars of the Security Documents have been delivered
to the Registrar of Companies of England and Wales within
the statutory time limit.
3.5.5 Originals or photocopies Originals or photocopies certified
as true, accurate and complete by a director or the
secretary of the Borrower, of any document which was
supplied to the Bank as a fax copy pursuant to Clause 3.3.
3.5.6 Master's receipt The master's receipt for the Mortgage.
3.6 No waiver If the Bank in its sole discretion agrees to advance any
Drawing to the Borrower before all of the documents and evidence
required by Clause 3.1 and/or 3.2 and/or 3.3 have been delivered
to or to the order of the Bank, the Borrower undertakes to deliver
all outstanding documents and evidence to or to the order of the
Bank no later than the date specified by the Bank, and the Bank's
advance of the Drawing shall not be taken as a waiver of its right
to require production of all the documents and evidence required
by Clauses 3.1, 3.2 and 3.3.
3.7 Form and content All documents and evidence delivered to the Bank
pursuant to this Clause shall:-
3.7.1 be in form and substance acceptable to the Bank;
3.7.2 be accompanied, if required by the Bank, by translations
into the English language, certified in a manner acceptable
to the Bank;
3.7.3 if required by the Bank, be certified, notarised, legalised
or attested in a manner acceptable to the Bank.
3.8 Event of Default The Bank shall be under no obligation to advance
any part of the Loan nor to act on any Drawdown Notice if, at the
date of any Drawdown Notice or at the date on which the advance of
a Drawing is requested in any Drawdown Notice, an Event of Default
or Potential Event of Default shall have occurred, or if an Event
of Default or Potential Event of Default would result from the
advance of the Drawing in question.
Page 21
4 Representations and Warranties
The Borrower represents and warrants to the Bank at the date of this
Agreement and (by reference to the facts and circumstances then
pertaining) at the date of each Drawdown Notice, at each Advance Date and
at each Interest Payment Date as follows:-
4.1 Incorporation and capacity Each of the Security Parties is a body
corporate duly constituted and existing and (where applicable) in
good standing under the law of its country of incorporation, in
each case with perpetual corporate existence and the power to xxx
and be sued, to own its assets and to carry on its business, and
all of the corporate shareholders (if any) of each Security Party
are duly constituted and existing under the laws of their
countries of incorporation with perpetual corporate existence and
the power to xxx and be sued, to own their assets and to carry on
their business.
4.2 Solvency None of the Security Parties is insolvent or in
liquidation or administration or subject to any other insolvency
procedure, and no receiver, administrative receiver,
administrator, liquidator, trustee or analogous officer has been
appointed in respect of any of the Security Parties or all or any
part of their assets.
4.3 Binding obligations The Building Contract does, and the Security
Documents when duly executed and delivered will, constitute the
legal, valid and binding obligations of the Security Parties
enforceable in accordance with their respective terms.
4.4 Satisfaction of conditions All acts, conditions and things
required to be done and satisfied and to have happened prior to
the execution and delivery of the Security Documents in order to
constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their
respective terms have been done, satisfied and have happened in
compliance with all applicable laws.
4.5 Registrations and consents With the exception only of the
registrations referred to in Clauses 3.4 and 3.5, all (if any)
consents, licences, approvals and authorisations of, or
registrations with or declarations to, any governmental authority,
bureau or agency which may be required in connection with the
execution, delivery, performance, validity or enforceability of
the Security Documents have been obtained or made and remain in
full force and effect and the Borrower is not aware of any event
or circumstance which could reasonably be expected adversely to
affect the right of any of the Security Parties to hold and/or
obtain renewal of any such consents, licences, approvals or
authorisations.
4.6 Disclosure of material facts The Borrower is not aware of any
material facts or circumstances which have not been disclosed to
the Bank and which might, if disclosed, have adversely affected
the decision of a person considering whether or not to make loan
facilities of the nature contemplated by this Agreement available
to the Borrower.
Page 22
4.7 No material litigation There is no action, suit, arbitration or
administrative proceeding pending or to its knowledge about to be
pursued before any court, tribunal or governmental or other
authority which would, or would be likely to, have a materially
adverse effect on the business, assets, financial condition or
creditworthiness of any of the Security Parties.
4.8 No breach of law or contract The execution, delivery and
performance of the Security Documents will not contravene any
contractual restriction or any law binding on any of the Security
Parties or on any shareholder (whether legal or beneficial) of any
of the Security Parties, or the constitutional documents of any of
the Security Parties, nor result in the creation of, nor oblige
any of the Security Parties to create, any Encumbrance over all or
any of its assets, with the exception of the Encumbrances created
by or pursuant to the Security Documents, and, in entering into
those of the Security Documents to which it is, or is to be, a
party, and in borrowing the Loan, the Borrower is acting for its
own account.
4.9 No deductions The Borrower is not required to make any deduction
or withholding from any payment which it may be obliged to make to
the Bank under or pursuant to the Security Documents.
4.10 No established place of business in the United Kingdom or United
States None of the Security Parties has, nor will any of them have
during the Facility Period, an established place of business in
the United Kingdom or the United States of America.
4.11 Use of Loan The Loan will be used for the purpose specified in
Recital (C).
4.12 Completeness of Documents The certified copy documents provided or
to be provided by the Borrower to the Bank in accordance with
Clauses 3.1.5, 3.1.6, 3.2.1 and 3.3.2 do, or will, constitute the
full agreement between (i) the Builder and the Borrower and the
Refund Guarantor and the Borrower in relation to the construction,
sale and purchase of the Vessel, and (ii) the Borrower and the
Charterer in relation to the time chartering of the Vessel, and,
in each case, there are no commissions, rebates, premiums or other
payments due other than in the ordinary course of business or as
disclosed to, and approved in writing by, the Bank.
Page 23
5 Repayment and Prepayment
5.1 Repayment The Borrower agrees to repay the Loan to the Bank by (a)
one hundred and forty four (144) consecutive monthly Repayment
Instalments and (b) a balloon payment in the amount of one hundred
and eighteen million Dollars ($118,000,000) (the "Balloon")
payable concurrently with the final Repayment Instalment, the
first Repayment Date being the earlier of (i) the date upon which
the Borrower delivers the Vessel to the Charterer under the
Charter (whether immediately ex-Builder's yard or in Trinidad) and
(ii) the date which is one calendar month after the Delivery
Advance Date and subsequent Repayment Dates being at consecutive
intervals of one calendar month thereafter. Subject always to the
provisions of Clause 5.2, the amount of each Repayment Instalment
shall be the amount shown as principal in the column headed
"Principal Repayment" in Schedule 1.
5.2 Reduction of Balloon If the aggregate amount advanced to the
Borrower is less than the Maximum Loan Amount, each Repayment
Instalment (including the Balloon) the Balloon shall be reduced
pro rata.
5.3 Prepayment The Borrower may prepay the Loan in whole or in part in
an amount equal to one million Dollars ($1,000,000) or an integral
multiple of that amount (or as otherwise may be agreed by the
Bank) provided that it has first given to the Bank not fewer than
ten (10) days' prior written notice expiring on a Business Day of
its intention to do so. Any notice pursuant to this Clause once
given shall be irrevocable and shall oblige the Borrower to make
the prepayment referred to in the notice on the Business Day
specified in the notice, together with all interest accrued on the
amount prepaid up to and including that Business Day.
5.4 Prepayment indemnity If the Borrower shall, subject always to
Clause 5.3, make a prepayment on a Business Day other than the
last day of an Interest Period in respect of the whole of the
Loan, it shall, in addition to the amount prepaid and accrued
interest, pay to the Bank any amount which the Bank may certify is
necessary to compensate the Bank for any Break Costs incurred by
the Bank as a result of the making of the prepayment in question.
Page 24
5.5 Application of prepayments Any prepayment in an amount less than
the Indebtedness shall be applied in satisfaction or reduction
first of any costs and other amounts outstanding (including, for
the avoidance of doubt, any Break Costs); secondly of all interest
outstanding; thirdly of the Balloon; and fourthly of the Repayment
Instalments in inverse order of maturity.
5.6 No reborrowing No amount repaid or prepaid pursuant to this
Agreement may in any circumstances be reborrowed.
6 Funding of Balloon and Interest
6.1 Determination of Funding Rate for the Balloon The Borrower
irrevocably authorises the Bank to obtain at the Bank's
discretion, subject always to the provisions of Clause 9.2.13 on a
Business Day nominated by the Borrower, in accordance with its
normal practices, a rate in the London Interbank Market for fixed
rate funds in amounts and maturities appropriate to match the
repayment of the Balloon in accordance with Clause 5.1 and on the
basis that interest will accrue on the Balloon at the aggregate of
(a) the fixed rate obtained by the Bank and (b) the Margin
(together "the Funding Rate"), the amount of each such payment to
be calculated by the Bank whose certification shall be final (save
in the case of manifest error).
6.2 Assumptions The Borrower acknowledges that the form of Schedule 1
annexed to this Agreement is by way of example only and has been
calculated upon the assumptions that (a) the interest rate payable
on the Balloon will be seven point three four per cent (7.340%)
per annum, and (b) the amount of the Balloon will be one hundred
and eighteen million Dollars (US$118,000,000). If, (when the Bank
has fixed the Funding Rate in accordance with Clause 6.1) any of
such assumptions proves to be incorrect, the Bank shall reissue
Schedule 1. The revised schedule shall constitute Schedule 1 to
this Agreement for all purposes and each reference to "Schedule 1"
in this Agreement shall thereafter be a reference to such revised
schedule, unless and until further revised in accordance with this
Agreement and the Bank's calculation and certification of such
revised schedule shall (in the absence of manifest error) be
conclusive.
6.3 Payment of Interest in respect of the Balloon Interest shall
accrue on the Balloon from day to day at the Funding Rate and
accrued interest (other than interest at the Default Rate, in
respect of which Clause 6.12 shall apply) shall be paid on each
Repayment Date in the amount specified in the column headed
"Interest Payment - Balloon" in Schedule 1.
Page 25
6.4 Notification of Funding Rate The Bank shall notify the Borrower
promptly of the Funding Rate applicable to the Balloon determined
by it under this Clause 6.
6.5 Market disruption: non-availability
6.5.1 If and whenever the Bank decides (which decision shall, in
the absence of manifest error, be conclusive):
(a) that adequate and fair means do not exist for
ascertaining the Funding Rate; or
(b) that deposits in Dollars are not available to the
Bank in the London Interbank Market in the ordinary
course of business in sufficient amounts to fund the
Balloon;
the Bank shall give a notice (a "Determination
Notice") to the Borrower. A Determination Notice
shall contain particulars of the relevant
circumstances giving rise to its issue. After the
giving of any Determination Notice the undrawn
amount of the Balloon (if any) shall not be advanced
or borrowed until notice to the contrary is given to
the Borrower by the Bank.
6.5.2 During the period of ten (10) days after any Determination
Notice has been given by the Bank pursuant to Clause 6.5.1,
the Bank shall certify an alternative basis (the
"Substitute Basis") for maintaining the continuing drawing
of the Balloon. The Substitute Basis may (without
limitation) include alternative interest periods,
alternative currencies or alternative rates of interest but
shall include a margin above the cost of funds to the Bank
equivalent to the Margin. Each Substitute Basis so
certified shall be binding upon the Borrower and shall take
effect in accordance with its terms from the date specified
in the Determination Notice until such time as the Bank
notifies the Borrower that none of the circumstances
specified in Clause 6.5.1 continues to exist whereupon the
normal interest rate fixing provisions of this Agreement
shall apply.
6.6 Interest Periods for the Excess Amount The period during which any
part of the Excess Amount shall be outstanding pursuant to this
Agreement shall be divided into consecutive Interest Periods of
either:
6.6.1 three, six, nine or twelve months' duration; or
6.6.2 such other duration as may be agreed by the Bank in its
discretion.
Page 26
6.7 Beginning and end of Interest Periods in respect of the Excess
Amount The first Interest Period in respect of the Excess Amount
or a part thereof shall begin on the first Advance Date.
Notwithstanding Clause 6.6 the first Interest Period in respect of
each Drawing or a part thereof forming part of the Excess Amount
other than the first shall be of such a length as to end on the
same date as the then current Interest Period applicable to the
remainder of the Excess Amount, and the final Interest Period in
respect of the Excess Amount shall end on the Repayment Date
applicable to the final Repayment Instalment for the Loan.
6.8 Interest Periods to meet Repayment Dates After delivery of the
Vessel pursuant to the Building Contract, if an Interest Period
does not expire on the next Repayment Date, there shall, in
respect of each part of the Excess Amount equal to a Repayment
Instalment falling due for payment before the expiry of that
Interest Period, be a separate Interest Period which shall expire
on the relevant Repayment Date in respect of the Excess Amount,
and the Interest Period selected or agreed shall apply to the
balance of the Excess Amount only.
6.9 Interest rate for the Excess Amount During each Interest Period
interest shall accrue on the Excess Amount at the rate determined
by the Bank to be the aggregate of (a) the Margin, (b) LIBOR
determined at or about 11.00 a.m. on the second Business Day prior
to the beginning of that Interest Period and (c) the Mandatory
Cost.
6.10 Accrual and payment of interest Interest on the Excess Amount
shall accrue from day to day, shall be calculated on the basis of
a 360 day year and the actual number of days elapsed (or, in any
circumstance where market practice differs, in accordance with the
prevailing market practice) and shall be paid by the Borrower to
the Bank on the last day of each Interest Period in respect of
their Excess Amount and additionally during any Interest Period
exceeding three months, on the last day of each successive three
month period after the beginning of that Interest Period.
6.11 Ending of Interest Periods Each Interest Period applicable to the
Excess Amount shall, subject to Clauses 6.7 and 6.8, end on the
date which numerically corresponds to the date on which the
immediately preceding Interest Period in respect of the Excess
Amount or a part thereof ended (or, in the case of the first
Interest Period, to the first Advance Date) in the calendar month
which is the number of months selected or agreed after the
calendar month in which the immediately preceding Interest Period
in respect of the Excess Amount ended (or, in the case of the
first Interest Period, in which the first Advance Date occurred),
except that:-
6.11.1 if there is no numerically corresponding date in the
calendar month in which the Interest Period in respect of
the Excess Amount (or a part thereof) ends, the Interest
Period in respect of the Excess Amount (or a part thereof)
shall end on the last Business Day in that calendar month;
and
Page 27
6.11.2 if any Interest Period in respect of the Excess Amount (or
a part thereof) would end on a day which is not a Business
Day, that Interest Period in respect of the Excess Amount
(or a part thereof) shall end on the next succeeding
Business Day (unless the next succeeding Business Day falls
in the next calendar month, in which event the Interest
Period in respect of the Excess Amount (or a part thereof)
in question shall end on the next preceding Business Day).
Any adjustment made pursuant to Clause 6.11.1 or 6.11.2 shall be
ignored for the purpose of determining the date on which any
subsequent Interest Period shall end.
6.12 Default Rate If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event
of Default, bear interest up to the date of actual payment (both
before and after judgment) at the Default Rate, compounded at such
intervals as the Bank shall in its discretion determine, which
interest shall be payable from time to time by the Borrower to the
Bank on demand.
6.13 Determinations conclusive Each determination of an interest rate
made by the Bank in accordance with Clause 6 shall (save in the
case of manifest error or on any question of law) be final and
conclusive.
6.14 Determination of Funding Rate for the Excess Amount The Borrower
may, provided no Event of Default has occurred which is continuing
and subject to the Bank's consent such consent not to be
unreasonably withheld, elect to fix the rate of interest pursuant
to this Clause 6 payable in respect of the Excess Amount by giving
to the Bank not less than three (3) Business Days written notice
of its intention to do so. If the Borrower makes such an election
pursuant to this Clause 6.14, the Borrower irrevocably authorises
the Bank to obtain at the Bank's discretion, in accordance with
its normal practices, a rate in the London Interbank Market for
fixed rate funds in amounts and maturities appropriate to match
the repayment of the Excess Amount or, as appropriate, the balance
of the Excess Amount by one hundred and forty four (144) or, if
appropriate, the number of Repayment Instalments still outstanding
at the date on which the election contained in this Clause 6.14
shall become effective, monthly Repayment Instalments in
accordance with Clause 5.1 and on the basis that interest will
accrue on the Loan at the aggregate of (a) the cost of funds to
the Bank (as determined by the Bank), (b) the Margin and (c) the
Mandatory Cost ( together "the Funding Rate"), the amount of each
such payment and the proportion of each such payment which is
allocated to principal or interest to be calculated by the Bank on
an annuity basis.
Page 28
6.15 Payment of Interest in respect of the Excess Amount If the
Borrower elects to fix the rate of interest in accordance with and
pursuant to Clause 6.14 interest shall accrue on the Loan from day
to day at the Funding Rate and accrued interest (other than
interest at the Default Rate, in respect of which Clause 6.12
shall apply) shall be paid on each Repayment Date in respect of
the Excess Amount in an amount as notified by the Bank to the
Borrower which amount shall constitute a new Schedule 1 to this
Agreement and which, save in the case of manifest error, shall be
binding on the Borrower with regard to repayment of principal and
interest.
6.16 Notification of Funding Rate The Bank shall notify the Borrower
promptly of the Funding Rate determined by it under this Clause
6.16.
6.17 Market disruption: non-availability
6.17.1 If an election has been made pursuant to the provisions of
Clause 6.14 if and whenever the Bank decides (which
decision shall, in the absence of manifest error, be
conclusive):
(a) that adequate and fair means do not exist for
ascertaining the Funding Rate; or
(b) that deposits in Dollars are not available to the
Bank in the London Interbank Market in the ordinary
course of business in sufficient amounts to fund the
Loan;
the Bank shall give a notice (a "Determination Notice") to
the Borrower. A Determination Notice shall contain
particulars of the relevant circumstances giving rise to
its issue. After the giving of any Determination Notice the
undrawn amount of the Excess Amount (if any) shall not be
advanced or borrowed until notice to the contrary is given
to the Borrower by the Bank.
6.17.2 During the period of ten (10) days after any Determination
Notice has been given by the Bank pursuant to clause
6.17.1, the Bank shall certify an alternative basis (the
"Substitute Basis") for maintaining the Excess Amount. The
Substitute Basis may (without limitation) include
alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin
above the cost of funds to the Bank equivalent to the
Margin. Each Substitute Basis so certified shall be binding
upon the Borrower and shall take effect in accordance with
its terms from the date specified in the Determination
Notice until such time as the Bank notifies the Borrower
that none of the circumstances specified in clause 6.17.1
continues to exist whereupon the normal interest rate
fixing provisions of this Agreement shall apply.
Page 29
7 Fees
7.1 Arrangement fee The Borrower shall pay to the Bank an arrangement
fee of one million two hundred and fifty thousand Dollars
($1,250,000) by way of two instalments, of which two hundred and
fifty thousand Dollars ($250,000) shall be paid on or before the
earlier to occur of the delivery of the Vessel by the Builder to
the Borrower and the Availability Termination Date and the balance
of one million Dollars ($1,000,000) shall be paid immediately upon
demand by way of written notice from the Bank to the Borrower.
7.2 Commitment commission The Borrower shall pay to the Bank a
commitment commission calculated at the rate of one half of one
per centum (1/2%) per annum on the undrawn amount of the Loan from
time to time from the earlier of the date of this Agreement and 15
January 2002 to the earlier to occur of (a) the date on which the
Maximum Loan Amount shall have been advanced to the Borrower and
(b) the Availability Termination Date, both dates inclusive. The
Commitment Commission will accrue from day to day on the basis of
a 360 day year and the actual number of days elapsed, and shall be
paid quarterly in arrears with a final pro rata payment on the
earlier to occur of the date on which the Maximum Loan Amount
shall have been advanced to the Borrower and the Availability
Termination Date.
8 Security Documents
As security for the repayment of the Indebtedness, the Borrower shall
execute and deliver to the Bank or cause to be executed and delivered to
the Bank, the following Security Documents in such forms and containing
such terms and conditions as the Bank shall require:-
8.1 pre-delivery on or before the first Advance Date:-
8.1.1 the Building Contract Assignment a deed of assignment of
the Building Contract and Refund Guarantee;
8.1.2 the Guarantee the guarantee and indemnity of the Guarantor;
8.1.3 the Account Security Deeds account security deeds, one in
respect of all amounts from time to time standing to the
credit of the Cash Account and one in respect of all
amounts from time to time standing to the credit of the
Earnings Account; and
8.1.4 the Share Pledge if requested by the Bank, a pledge of all
the issued shares of the Borrower.
8.2 post-delivery on or before the Delivery Advance Date:-
8.2.1 the Mortgage a first preferred mortgage over the Vessel;
and
8.2.2 the Assignment a deed of assignment of the Insurances,
Earnings, Charter Rights, and Requisition Compensation.
Page 30
9 Covenants
9.1 Negative covenants
The Borrower will not without the Bank's prior written consent:-
9.1.1 no disposals or third party rights dispose of or create or
permit to arise or continue any Encumbrance or other third
party right on or over all or any part of its present or
future assets or undertaking other than any Permitted
Encumbrances existing from time to time; nor
9.1.2 no borrowings borrow any money or incur any obligations
under leases other than pursuant to this Agreement except
in respect of inter-company loans which have been fully
subordinated to the Bank's rights under the Security
Documents in a manner acceptable to the Bank; nor
9.1.3 no repayments repay any loans made to it except in respect
of inter-company loans or amounts made available to it by
the Guarantor; nor
9.1.4 no substantial liabilities except in the ordinary course of
business, incur any liability to any third party which is
in the opinion of the Bank of a substantial nature; nor
9.1.5 no other business engage in any business other than the
ownership, operation, chartering and management of the
Vessel; nor
9.1.6 no loans or other financial commitments make any loan nor
enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability in
respect of any obligation of any other person; nor
9.1.7 no sale of Vessel sell or otherwise dispose of the Vessel
or any shares in the Vessel nor agree to do so; nor
9.1.8 no chartering after Event of Default following the
occurrence and during the continuation of an Event of
Default let the Vessel on charter or renew or extend any
charter or other contract of employment of the Vessel (nor
agree to do so) other than under the Charter; nor
9.1.9 no change in management appoint anyone other than the
Managers as commercial or technical managers of the Vessel,
nor terminate or materially vary the arrangements for the
commercial or technical management of the Vessel, nor
permit the Managers to change the sub-contractors or
delegate the commercial or technical management of the
Vessel to any third party except as already notified to the
Bank; nor
9.1.10 no change in ownership or control permit any change in its
beneficial ownership and control from that advised to the
Bank at the date of this Agreement.
9.1.11 no amendments to Charter agree to any substantial or
material amendment to or variation of the Charter, nor
excuse the Charterer from performance of any of its
obligations pursuant to the Charter.
Page 31
9.2 Positive covenants
9.2.1 Registration of Vessel The Borrower undertakes to maintain
the registration of the Vessel under the flag referred to
in Recital (B) from the Delivery Advance Date and for the
remainder of the Facility Period.
9.2.2 Financial statements The Borrower will supply to the Bank,
without request, (a) the Borrower's annual financial
statements for each financial year of the Borrower ending
during the Facility Period, containing (amongst other
things) the Borrower's profit and loss account for, and
balance sheet at the end of, each such financial year,
prepared in accordance with generally accepted
international accounting principles and practices
acceptable to the Bank consistently applied, and audited by
a firm of chartered accountants (or equivalent) acceptable
to the Bank, in each case within one hundred and eighty
(180) days of the end of the financial year to which they
relate and (b) the quarterly unaudited financial management
statements for each financial quarter of the Borrower
ending during the Facility Period within sixty (60) days
after the end of the quarter to which they relate. The
Borrower will procure that the Bank is given the like
information relating to the Guarantor within the same time
frames as aforementioned.
9.2.3 Other information The Borrower will promptly supply to the
Bank copies of all financial and other information from
time to time given by the Borrower to its shareholders and
such information and explanations as the Bank may from time
to time require in connection with the operation of the
Vessel and the Borrower's profit and liquidity, and will
procure that the Bank be given the like information and
explanations relating to all other Security Parties (other
than the Charterer).
9.2.4 Evidence of goodstanding The Borrower will from time to
time on the request of the Bank provide the Bank with
evidence in form and substance satisfactory to the Bank
that the Security Parties and all corporate shareholders of
any of the Security Parties remain in good standing.
9.2.5 Evidence of current COFR Without limiting the Borrower's
obligations under Clause 9.2.3, the Borrower will from time
to time on the request of the Bank provide the Bank with
such evidence as the Bank may reasonably require that the
Vessel has a valid and current Certificate of Financial
Responsibility pursuant to the United States Oil Pollution
Xxx 0000.
9.2.6 ISM Code compliance The Borrower will:-
(a) procure that the Vessel remains, from the Delivery
Advance Date and for the remainder of the Facility
Period, subject to a SMS;
(b) maintain a valid and current SMC for the Vessel from
the Delivery Advance Date and for the remainder of
the Facility Period;
(c) if not itself the Company, procure that the Company
maintains a valid and current DOC from the Delivery
Advance Date and for the remainder of the Facility
Period;
Page 32
(d) immediately notify the Bank in writing of any actual
or threatened withdrawal, suspension, cancellation
or modification of the Vessel's SMC or of the
Company's DOC;
(e) immediately notify the Bank in writing of any
"accident" or "major non-conformity", as each of
those terms is defined in the Guidelines on the
Implementation of the International Safety
Management Code by Administrations adopted by the
Assembly of the International Maritime Organisation
pursuant to Resolution A.788(19), and of the steps
being taken to remedy the situation; and
(f) not without the prior written consent of the Bank
(which will not be unreasonably withheld) change the
identity of the Company.
9.2.7 Inspection of records The Borrower will permit the
inspection of its financial records and accounts from time
to time by the Bank or its nominee.
9.2.8 Pari passu obligations The Borrower will ensure that,
throughout the Facility Period, the obligations of the
Security Parties under or pursuant to the Security
Documents rank at least pari passu with all other existing
or future indebtedness, obligations or liabilities of the
Security Parties, other than any mandatorily preferred by
law.
9.2.9 Notification of Event of Default The Borrower will
immediately notify the Bank in writing of the occurrence of
any Event of Default or Potential Event of Default.
9.2.10 Valuations The Borrower will at the request of the Bank,
but no more than once in each twelve (12) month period,
provide the Bank with a valuation of the Vessel (on the
basis of an arm's length sale on normal commercial terms
and free of any existing charter or other contract of
employment), such valuation to be obtained by the
Borrower's existing panel of valuation brokers (namely,
Fearnleys, Platou and Basso) (or such other brokers as may
be acceptable to the Bank) the cost of such valuation to be
for the account of the Borrower. In addition, the Borrower
will provide the Bank with copies of such other valuations
of the Vessel as may be obtained from time to time by the
said valuation brokers.
9.2.11 Performance of Charter The Borrower will perform the
Charter in accordance with its terms and will not without
the prior written consent of the Bank terminate or purport
to terminate the Charter (irrespective of the terms of the
Charter) the Borrower acknowledging by its execution of
this Agreement that, if any such consent is given by the
Bank, the Bank shall be under no liability in the event
that any termination of the Charter is subsequently
adjudged to constitute a repudiation of the Charter.
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9.2.12 Mandatory Prepayment If, at any time:-
(a) before the Delivery Advance Date, any of the
circumstances set out in Clauses 11.2.5 or 11.2.6
occurs in relation to the Builder or the Refund
Guarantor; or
(b) after the Delivery Advance Date, any of the
circumstances set out in Clauses 11.2.5 or 11.2.6
occurs in relation to the Charterer; or
(c) before the Delivery Advance Date, either the
Building Contract or the Refund Guarantee is
terminated, revoked, cancelled or repudiated or
otherwise ceases to remain in full force and effect;
or
(d) during the Facility Period the Charter is
terminated, revoked, cancelled or repudiated or
otherwise ceases to remain in full force and effect;
the Indebtedness (including all accrued interest) shall
immediately be prepaid. Clause 5.4 shall apply to that
prepayment if it is made on a day other than the last day
of an Interest Period in respect of the whole of the Loan.
9.2.13 Hedging enter into hedging arrangements satisfactory to the
Bank in all respects in respect of an amount equal to the
Balloon by no later than 15 February 2002 for the duration
of the period up to and including the date of repayment of
the Balloon pursuant to Clause 5.1.
9.2.14 Tripartite Agreement immediately enter into the Tripartite
Agreement and immediately procure that the Charterer enters
into the Tripartite Agreement should the Charter become a
bareboat charter.
Page 34
10 Cash and Earnings Accounts
10.1 Maintenance of Accounts The Borrower shall maintain the Accounts
with the Bank from the Delivery Advance Date and for the remainder
of the Facility Period free of Encumbrances and rights of set off
other than as created by or pursuant to the Security Documents.
10.2 Earnings The Borrower shall procure that there is credited to the
Earnings Account all Earnings and any Requisition Compensation.
10.3 Application of Earnings Account The Borrower shall procure that
there is transferred from the Earnings Account (and irrevocably
authorises the Bank to transfer from the Earnings Account) to the
Bank:-
10.3.1 on each Repayment Date, the amount of the Repayment
Instalment then due;
10.3.2 on each Interest Payment Date, the amount of interest then
due; and
10.3.3 to the extent that the Monthly Payment Amount has not been
made in accordance with Clause 10.5 an amount equal to any
shortfall.
10.4 Borrower's obligations not affected If for any reason the amount
standing to the credit of the Earnings Account shall be
insufficient to pay any Repayment Instalment or to make any
payment of interest when due, the Borrower's obligation to pay
that Repayment Instalment or to make that payment of interest
shall not be affected.
10.5 Transfers to Cash Account If at any time after the Delivery
Advance Date, the Excess Amount shall be subject to a floating
interest rate in accordance with the provisions of Clauses 6.6 -
6.11, then the Borrower shall procure that there is paid to the
Cash Account (from sums standing to the credit of the Earnings
Account or otherwise) during each calendar month an amount of not
less than three hundred and thirty three thousand three hundred
and thirty three Dollars ($333,333) (each such payment a "Monthly
Payment Amount"). The Borrower's obligation to effect payments to
the Cash Account as aforesaid shall continue until such time as
the balance standing to the credit of the Cash Account shall be in
an amount of five million Dollars ($5,000,000) (the "Cap"); it is
agreed that the period for such obligation, the amount of the
Monthly Payment Amount and the amount of the Cap can be varied
upon the request of the Borrower and upon terms acceptable to the
Bank.
Page 35
10.6 Amendments to Cap If the Borrower and the Bank shall agree to fix
the rate of interest for the whole or part of the Excess Amount in
accordance with the provisions of Clause 6.14, the Bank and the
Borrower will negotiate in good faith to agree a new Cap (the "New
Cap") and new "Monthly Payment Amount" on terms acceptable to the
Bank.
10.7 Release of Surplus Any amount in excess of the Cap or any New Cap
(as the case may be) or in excess of the amounts required to be
standing to the credit of the Cash Account pursuant to Clause 10.5
shall (unless an Event of Default shall have occurred and be
continuing) be released to or to the order of the Borrower
10.8 Restriction on withdrawal During the Facility Period no sum may be
withdrawn from the Accounts (except in accordance with this
Clause) without the prior written consent of the Bank but for the
avoidance of doubt may be utilised in respect of prepayments in
accordance with Clause 5.3, 5.4 and 5.5. For the avoidance of
doubt provided no Event of Default has occurred which is
continuing, and provided the obligations pursuant to Clause 10.5
have been fulfilled, any surplus money standing to the credit of
the Earnings Account and/or the Cash Account shall be at the free
disposal of the Borrower.
10.9 Relocation of Accounts At any time following the occurrence and
during the continuation of an Event of Default, the Bank may
without the consent of the Borrower relocate either or both of the
Accounts to any other branch of the Bank, without prejudice to the
continued application of this Clause and the rights of the Bank
under or pursuant to the Security Documents.
11 Events of Default
11.1 The Bank's rights If any of the events set out in Clause 11.2
occurs, the Bank may at its discretion by notice to the Borrower
declare itself to be under no further obligation to the Borrower
under or pursuant to this Agreement and may declare all or any
part of the Indebtedness (including such unpaid interest as shall
have accrued) to be immediately payable, in which event the
Indebtedness (or the part of the Indebtedness referred to in the
Bank's notice) shall immediately become due and payable without
any further demand or notice of any kind.
11.2 Events of Default The events referred to in Clause 11.1 are:-
11.2.1 payment default if the Borrower defaults in the payment of
any part of the Indebtedness when due; or
Page 36
11.2.2 other default if any of the Security Parties fails to
observe or perform any of the covenants, conditions,
undertakings, agreements or obligations on its part
contained in any of the Security Documents or shall in any
other way be in breach of or do or cause to be done any act
repudiating or evidencing an intention to repudiate any of
the Security Documents; or
11.2.3 misrepresentation or breach of warranty if any
representation or warranty made or repeated, or any other
information given, by any of the Security Parties to the
Bank in or leading up to or during the currency of any of
the Security Documents, or in or pursuant to any notice or
other document delivered to the Bank under or pursuant to
any of the Security Documents, is false or incorrect or
misleading in any respect which the Bank in its discretion
considers to be material; or
11.2.4 execution if a distress or execution or other process of a
court or authority is levied on any of the property of any
of the Security Parties before or after final judgment or
by order of any competent court or authority and is not
satisfied within seven days of levy; or
11.2.5 insolvency events if any of the Security Parties:-
(a) resolves to appoint, or applies for or consents to
the appointment of, a receiver, administrative
receiver, trustee, administrator or liquidator of
itself or of all or part of its assets; or
(b) is unable or admits its inability to pay its debts
as they fall due; or
(c) makes a general assignment for the benefit of
creditors or enters into a moratorium on payment of
any of its indebtedness; or
(d) ceases trading or threatens to cease trading; or
(e) has appointed an Inspector under the Companies Xxx
0000 or any statutory provision which the Bank in
its discretion considers analogous thereto; or
Page 37
11.2.6 insolvency proceedings if any proceedings are commenced or
threatened, or any order or judgment is given by any court,
for the bankruptcy, liquidation, winding up, administration
or re-organisation of any of the Security Parties or for
the appointment of a receiver, administrative receiver,
administrator, liquidator or trustee of any of the Security
Parties or of all or part of the assets of any of the
Security Parties, or if any person appoints or purports to
appoint such receiver, administrative receiver,
administrator, liquidator or trustee;
11.2.7 impossibility or illegality if any event occurs which
would, or would with the passage of time, render
performance of any of the Security Documents by any of the
Security Parties impossible, unlawful or unenforceable by
the Bank; or
11.2.8 conditions subsequent if any of the conditions set out in
Clause 3.4 or 3.5 is not satisfied within the time
reasonably required by the Bank; or
11.2.9 revocation or modification of consents etc. if any consent,
licence, approval, authorisation, filing, registration or
other requirement of any governmental, judicial or other
public body or authority which is now, or which at any time
during the Facility Period becomes, necessary to enable any
of the Security Parties to comply with any of their
obligations in or pursuant to any of the Security Documents
is not obtained or is revoked, suspended, withdrawn or
withheld, or is modified in a manner which the Bank
considers is, or may be, prejudicial to its interests, or
ceases to remain in full force and effect; or
11.2.10 curtailment of business if the business of any of the
Security Parties is wholly or partially curtailed or
suspended by any intervention by or under authority of any
government, or if all or a substantial part of the
undertaking, property or assets of any of the Security
Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any
government; or
11.2.11 loss of Vessel if the Vessel or any other vessel which may
from time to time be mortgaged to the Bank as security for
the repayment of all or any part of the Indebtedness is
destroyed, abandoned, confiscated, forfeited, condemned as
prize or becomes a Total Loss, except that a Total Loss
shall not be an Event of Default if:-
(a) the Vessel or other vessel is insured in accordance
with the Security Documents; and
Page 38
(b) no insurer has refused to meet or has disputed the
claim for Total Loss and it is not apparent to the
Bank in its discretion that any such refusal or
dispute is likely to occur; and
(c) payment of all insurance proceeds in respect of the
Total Loss is made in full to the Bank within one
hundred and twenty days of the occurrence of the
casualty giving rise to the Total Loss in question
or such longer period as the Bank may in its
discretion agree; or
11.2.12 acceleration of other indebtedness if any other
indebtedness or obligation for borrowed money of any of the
Security Parties becomes due or capable of being declared
due prior to its stated maturity by reason of default on
the part of that Security Party, or is not repaid or
satisfied at maturity; or
11.2.13 challenge to registration if the registration of the
Vessel or the Mortgage is contested or becomes void or
voidable or liable to cancellation or termination, or if
the validity or priority of the Mortgage is contested; or
11.2.14 war if the country of registration of the Vessel becomes
involved in war (whether or not declared) or civil war or
is occupied by any other power and the Bank in its
discretion considers that, as a result, the security
conferred by the Security Documents is materially
prejudiced; or
11.2.15 Margin if, in the event that the Charterer's S&P rating
falls below "B", the Bank and the Borrower fails to agree a
new rate for the Margin within ten (10) Business Days
thereof.
11.2.16 notice of termination if the Guarantor gives notice to the
Bank to determine its obligations under the Guarantee; or
11.2.17 material adverse change etc. if anything is done or
permitted or omitted to be done by any of the Security
Parties which in the reasonable opinion of the Bank
jeopardises or imperils (or may jeopardise or imperil) the
rights conferred on the Bank by the Security Documents, or
if there occurs (in the opinion of the Bank) any material
adverse change in the business, affairs or financial
condition of any of the Security Parties from that
pertaining at the date of this Agreement; or
Page 39
11.2.18 analogous events if any event which (in the opinion of the
Bank) is analogous to any of the events set out above shall
occur.
12 Set-Off and Lien
12.1 Set-off The Borrower irrevocably authorises the Bank at any time
after all or any part of the Indebtedness shall have become due
and payable to set off without notice any liability of the
Borrower to the Bank (whether present or future, actual or
contingent, and irrespective of the branch or office, currency or
place of payment) against any credit balance from time to time
standing on any account of the Borrower (whether current or
otherwise and whether or not subject to notice) with any branch of
the Bank in or towards satisfaction of the Indebtedness and, in
the name of the Bank or the Borrower, to do all acts (including,
without limitation, converting or exchanging any currency) and
execute all documents which may be required to effect such
application.
12.2 Lien The Bank shall have a lien on and be entitled to retain and
realise as additional security for the repayment of the
Indebtedness any cheques, drafts, bills, notes or negotiable or
non-negotiable instruments and any stocks, shares or marketable or
other securities and property of any kind of the Borrower (or of
the Bank as agent or nominee of the Borrower) from time to time
held by the Bank, whether for safe custody or otherwise.
12.3 Restrictions on withdrawal Despite any term to the contrary in
relation to any deposit or credit balance at any time on any
account of the Borrower with the Bank, no such deposit or balance
shall be repayable or capable of being assigned, mortgaged,
charged or otherwise disposed of or dealt with by the Borrower
during the Facility Period except in accordance with the Security
Documents, but the Bank may from time to time permit the
withdrawal of all or any part of any such deposit or balance
without affecting the continued application of this Clause.
12.4 Application The Borrower irrevocably authorises the Bank to apply
all sums which the Bank may receive:-
12.4.1 pursuant to a sale or other disposition of the Vessel or
any right, title or interest in the Vessel; or
12.4.2 by way of payment to the Bank of any sum in respect of the
Building Contract, Refund Guarantee, Insurances, Earnings,
Charter Rights or Requisition Compensation; or
12.4.3 otherwise arising under or in connection with any of the
Security Documents
Page 40
in or towards satisfaction, or by way of retention on account, of
the Indebtedness, in such manner as the Bank may in its discretion
determine.
13 Assignment and Sub-Participation
13.1 Right to assign The Bank may assign or transfer all or any of its
rights under or pursuant to the Security Documents to any other
branch of the Bank or to any other bank or financial institution,
and may grant sub-participations in all or any part of the Loan
and in the case of any assignment or transfer to another bank or
financial institution after consultation with the Borrower, the
Bank taking into consideration any reasonable objection of the
Borrower to such proposed assignment or transfer.
13.2 Borrower's co-operation The Borrower will co-operate fully with
the Bank in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such
documents as the Bank may require in connection therewith; and
irrevocably authorises the Bank to disclose to any proposed
assignee, transferee or sub-participant (whether before or after
any assignment, transfer or sub-participation and whether or not
any assignment, transfer or sub-participation shall take place)
all information relating to the Security Parties, the Loan or the
Security Documents which the Bank may in its discretion consider
necessary or desirable.
13.3 Rights of assignee Any assignee, transferee or sub-participant of
the Bank shall (unless limited by the express terms of the
assignment, transfer or sub-participation) take the full benefit
of every provision of the Security Documents benefiting the Bank.
14 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
14.1 Payments All amounts payable by the Borrower under or pursuant to
any of the Security Documents shall be paid to such accounts at
such banks as the Bank may from time to time direct to the
Borrower, and (unless payable in any other Currency of Account)
shall be paid in Dollars in same day funds (or such funds as are
required by the authorities in the United States of America for
settlement of international payments for immediate value).
Payments shall be deemed to have been received by the Bank on the
date on which the Bank receives authenticated advice of receipt,
unless that advice is received by the Bank on a day other than a
Business Day or at a time of day (whether on a Business Day or
not) when the Bank in its discretion considers that it is
impossible or impracticable for the Bank to utilise the amount
received for value that same day, in which event the payment in
question shall be deemed to have been received by the Bank on the
Business Day next following the date of receipt of advice by the
Bank.
14.2 No deductions or withholdings All payments (whether of principal
or interest or otherwise) to be made by the Borrower pursuant to
the Security Documents shall, subject only to Clause 14.3, be made
free and clear of and without deduction for or on account of any
Taxes or other deductions, withholdings, restrictions, conditions
or counterclaims of any nature.
14.3 Grossing-up If at any time any law requires (or is interpreted to
require) the Borrower to make any deduction or withholding from
any payment, or to change the rate or manner in which any required
deduction or withholding is made, the Borrower will promptly
notify the Bank and, simultaneously with making that payment, will
pay to the Bank whatever additional amount (after taking into
account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is
necessary to ensure that, after making the deduction or
withholding, the Bank receives a net sum equal to the sum which it
would have received had no deduction or withholding been made.
14.4 Evidence of deductions If at any time the Borrower is required by
law to make any deduction or withholding from any payment to be
made by it pursuant to any of the Security Documents, the Borrower
will pay the amount required to be deducted or withheld to the
relevant authority within the time allowed under the applicable
law and will, no later than thirty days after making that payment,
deliver to the Bank an original receipt issued by the relevant
authority, or other evidence acceptable to the Bank, evidencing
the payment to that authority of all amounts required to be
deducted or withheld.
Page 41
14.5 Rebate If the Borrower makes any deduction or withholding from any
payment under or pursuant to any of the Security Documents, and
the Bank subsequently receives a refund or allowance from any tax
authority which the Bank identifies as being referable to that
deduction or withholding, the Bank shall, as soon as reasonably
practicable, pay to the Borrower an amount equal to the amount of
the refund or allowance received, if and to the extent that it may
do so without prejudicing its right to retain that refund or
allowance and without putting itself in any worse financial
position than that in which it would have been had the deduction
or withholding not been required to have been made. Nothing in
this Clause shall be interpreted as imposing any obligation on the
Bank to apply for any refund or allowance nor as restricting in
any way the manner in which the Bank organises its tax affairs,
nor as imposing on the Bank any obligation to disclose to the
Borrower any information regarding its tax affairs or tax
computations.
14.6 Adjustment of due dates If any payment or transfer of funds to be
made under any of the Security Documents, other than a payment of
interest on the Loan shall be due on a day which is not a Business
Day, that payment shall be made on the next succeeding Business
Day (unless the next succeeding Business Day falls in the next
calendar month in which event the payment shall be made on the
next preceding Business Day). Any such variation of time shall be
taken into account in computing any interest in respect of that
payment.
14.7 Change in law If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any
law, or in compliance with any request or requirement from any
central bank or any fiscal, monetary or other authority:-
14.7.1 the Bank (or the holding company of the Bank) shall be
subject to any Tax with respect to payments of all or any
part of the Indebtedness; or
14.7.2 the basis of Taxation of payments to the Bank in respect of
all or any part of the Indebtedness shall be changed; or
14.7.3 any reserve requirements shall be imposed, modified or
deemed applicable against assets held by or deposits in or
for the account of or loans by any branch of the Bank; or
14.7.4 the manner in which the Bank allocates capital resources to
its obligations under this Agreement or any ratio (whether
cash, capital adequacy, liquidity or otherwise) which the
Bank is required or requested to maintain shall be
affected; or
14.7.5 there is imposed on the Bank (or on the holding company of
the Bank) any other condition in relation to the
Indebtedness or the Security Documents;
and the result of any of the above shall be to increase the cost
to the Bank (or to the holding company of the Bank) of the Bank
making or maintaining the Loan or to cause the Bank to suffer (in
its opinion) a material reduction in the rate of return on its
overall capital below the level which it reasonably anticipated at
the date of this Agreement and which it would have been able to
achieve but for its entering into this Agreement and/or performing
its obligations under this Agreement the Borrower shall from time
to time pay to the Bank on demand the amount which shall
compensate the Bank (or the holding company of the Bank) for such
additional cost or reduced return. A certificate signed by an
authorised signatory of the Bank setting out the amount of that
payment and the basis of its calculation shall be submitted to the
Borrower and shall be conclusive evidence of such amount save for
manifest error or on any question of law.
Page 42
14.8 Illegality and impracticality Notwithstanding anything contained
in the Security Documents, the obligation of the Bank to advance
or maintain the Loan shall terminate in the event that a change in
any law or in the interpretation of any law by any authority
charged with its administration shall make it unlawful or, in the
opinion of the Bank, impracticable for the Bank to advance or
maintain the Loan. In that event the Bank shall, by written notice
to the Borrower, declare its obligations to be immediately
terminated. If all or any part of the Loan shall have been
advanced by the Bank to the Borrower, the Indebtedness (including
all accrued interest) shall be prepaid within thirty days from the
date of such notice. Clause 5.4 shall apply to that prepayment if
it is made on a day other than the last day of an Interest Period
in respect of the whole of the Loan.
14.9 Changes in market circumstances If at any time the Bank determines
(which determination shall be final and conclusive and binding on
the Borrower) that, by reason of changes affecting the London
Interbank market, adequate and fair means do not exist for
ascertaining the rate of interest on the Loan pursuant to this
Agreement:-
14.9.1 the Bank shall give notice to the Borrower of the
occurrence of such event; and
14.9.2 the Bank shall as soon as reasonably practicable certify to
the Borrower in writing the effective cost to the Bank of
maintaining the Loan for such further period as shall be
selected by the Bank and the rate of interest payable by
the Borrower for that period; or, if that is not acceptable
to the Borrower,
14.9.3 the Bank will negotiate with the Borrower in good faith
with a view to modifying this Agreement to provide a
substitute basis for the Loan which is financially a
substantial equivalent to the basis provided for in this
Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 14.9.1, the Borrower and the Bank fail to agree in writing
on a substitute basis for the Loan, the Borrower will immediately
prepay the Indebtedness. Clause 5.4 shall apply to that prepayment
if it is made on a day other than the last day of an Interest
Period in respect of the whole of the Loan.
14.10 Non-availability of currency If the Bank is for any reason unable
to obtain Dollars in the London Interbank market and is, as a
result, or as a result of any other contingency affecting the
London Interbank market, unable to advance or maintain the Loan in
Dollars, the Bank shall give notice to the Borrower and the Bank's
obligations to make the Loan available shall immediately cease. In
that event, if all or any part of the Loan shall have been
advanced by the Bank to the Borrower, the Bank will negotiate with
the Borrower in good faith with a view to establishing a mutually
acceptable basis for funding the Loan from an alternative source.
If the Bank and the Borrower have failed to agree in writing on a
basis for funding the Loan from an alternative source by 11.00
a.m. on the second Business Day prior to the end of the then
current Interest Period, the Borrower will (without prejudice to
its other obligations under or pursuant to this Agreement,
including, without limitation, its obligation to pay interest on
the Loan, arising on the expiry of the then current Interest
Period) prepay the Indebtedness to the Bank on the expiry of the
then current Interest Period.
Page 43
15 Communications
15.1 Method Any Communication may be given, delivered, made or served
(as the case may be) under or in relation to this Agreement by
letter, telex or fax and shall be in the English language and sent
addressed:-
15.1.1 in the case of the Bank to the Bank at its address at the
head of this Agreement (fax no: + 00 00 0000 0000) marked
for the attention of: Ship Finance Department; and
15.1.2 in the case of the Borrower to the Communications Address;
or to such other address, telex or fax number as the Bank or the
Borrower may designate for itself by written notice to the other.
15.2 Timing A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by, the
Borrower:-
15.2.1 in the case of a telex when answered back;
15.2.2 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication
to have been transmitted to the correct fax number;
15.2.3 if delivered to an officer of the Borrower or left at the
Communications Address at the time of delivery or leaving;
or
15.2.4 if sent by registered post on receipt at the Communication
Address.
A Communication shall only be deemed to have been duly given,
delivered, made or served to or on, and received by, the Bank on
actual receipt of the whole of that Communication by the Bank.
15.3 Indemnity The Borrower shall indemnify the Bank against any cost,
claim, liability, loss or expense (including legal fees and any
Value Added Tax or any similar or replacement tax (if applicable))
which the Bank may sustain or incur as a consequence of any
Communication sent by or on behalf of the Borrower by fax not
being received by its intended recipient, or being received
incomplete, or by reason of any Communication purportedly having
been sent by or on behalf of the Borrower having been sent
fraudulently.
Page 44
16 General Indemnities
16.1 Currency In the event of the Bank receiving or recovering any
amount payable under any of the Security Documents in a currency
other than the Currency of Account, and if the amount received or
recovered is insufficient when converted into the Currency of
Account at the date of receipt to satisfy in full the amount due,
the Borrower shall, on the Bank's written demand, pay to the Bank
such further amount in the Currency of Account as is sufficient to
satisfy in full the amount due and that further amount shall be
due to the Bank as a separate debt under this Agreement.
16.2 Costs and expenses The Borrower will, within fourteen days of the
Bank's written demand, reimburse the Bank for all costs and
expenses (including Value Added Tax or any similar or replacement
tax if applicable) of and incidental to:-
16.2.1 the negotiation, preparation, execution and registration of
the Security Documents (whether or not any of the Security
Documents are actually executed or registered and whether
or not all or any part of the Loan is advanced) including,
for the avoidance of doubt costs and disbursements incurred
in connection with the technical report, the insurance
report, the survey report and legal opinions pursuant to
Clauses 3.1.12, 3.3.4, 3.3.6 and 3.3.10 respectively
PROVIDED THAT the first such seventy five thousand Pounds
((pound)75,000) of such costs and expenses as conclusively
certified by the Bank (save in the case of manifest error)
shall be for the Bank's account;
16.2.2 any amendments, addenda or supplements to any of the
Security Documents (whether or not completed);
16.2.3 any other documents which may at any time be required by
the Bank to give effect to any of the Security Documents or
which the Bank is entitled to call for or obtain pursuant
to any of the Security Documents (including, without
limitation, all premiums and other sums from time to time
payable by the Bank in relation to the Mortgagees'
Insurances); and
16.2.4 the exercise of the rights, powers, discretions and
remedies of the Bank under or pursuant to the Security
Documents.
16.3 Events of Default The Borrower shall indemnify the Bank from time
to time on demand against all losses and costs incurred or
sustained by the Bank as a consequence of any Event of Default,
including (without limitation) any Break Costs.
16.4 Funding costs The Borrower shall indemnify the Bank from time to
time on demand against all losses and costs incurred or sustained
by the Bank if, for any reason, any Drawing is not advanced to the
Borrower after the relevant Drawdown Notice has been given to the
Bank, or is advanced on a date other than that requested in the
Drawdown Notice (unless, in either case, as a result of any
default by the Bank), including (without limitation) any Break
Costs.
16.5 Protection and enforcement The Borrower shall indemnify the Bank
from time to time on demand against all losses, costs and
liabilities which the Bank may from time to time sustain, incur or
become liable for in or about the protection, maintenance or
enforcement of the rights conferred on the Bank by the Security
Documents or in or about the exercise or purported exercise by the
Bank of any of the rights, powers, discretions or remedies vested
in it under or arising out of the Security Documents, including
(without limitation) any losses, costs and liabilities which the
Bank may from time to time sustain, incur or become liable for by
reason of the Bank being mortgagee of the Vessel and/or a lender
to the Borrower, or by reason of the Bank being deemed by any
court or authority to be an operator or controller, or in any way
concerned in the operation or control, of the Vessel.
Page 45
16.6 Liabilities of Bank The Borrower will from time to time reimburse
the Bank on demand for all sums which the Bank may pay or become
actually or contingently liable for on account of the Borrower or
in connection with the Vessel (whether alone or jointly or jointly
and severally with any other person) including (without
limitation) all sums which the Bank may pay or guarantees which it
may give in respect of the Insurances, any expenses incurred by
the Bank in connection with the maintenance or repair of the
Vessel or in discharging any lien, bond or other claim relating in
any way to the Vessel, and any sums which the Bank may pay or
guarantees which it may give to procure the release of the Vessel
from arrest or detention.
16.7 Taxes The Borrower shall pay all Taxes to which all or any part of
the Indebtedness or any of the Security Documents may be at any
time subject and shall indemnify the Bank on demand against all
liabilities, costs, claims and expenses resulting from any
omission to pay or delay in paying any such Taxes.
17 Miscellaneous
17.1 Waivers No failure or delay on the part of the Bank in exercising
any right, power, discretion or remedy under or pursuant to any of
the Security Documents, nor any actual or alleged course of
dealing between the Bank and the Borrower, shall operate as a
waiver of, or acquiescence in, any default on the part of any
Security Party, unless expressly agreed to do so in writing by the
Bank, nor shall any single or partial exercise by the Bank of any
right, power, discretion or remedy preclude any other or further
exercise of that right, power, discretion or remedy, or the
exercise by the Bank of any other right, power, discretion or
remedy.
17.2 No oral variations No variation or amendment of any of the
Security Documents shall be valid unless in writing and signed on
behalf of the Bank.
17.3 Severability If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not
be affected or impaired in any way.
17.4 Successors etc. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees
and assignees, and shall inure to the benefit of the Bank and its
successors, transferees and assignees. The Borrower may not assign
nor transfer any of its rights under or pursuant to any of the
Security Documents without the prior written consent of the Bank.
17.5 Further assurance If any provision of the Security Documents shall
be invalid or unenforceable in whole or in part by reason of any
present or future law or any decision of any court, or if the
documents at any time held by the Bank are considered by the Bank
for any reason insufficient to carry out the terms of this
Agreement, then from time to time the Borrower will promptly, on
demand by the Bank, execute or procure the execution of such
further documents as in the opinion of the Bank are necessary to
provide adequate security for the repayment of the Indebtedness.
Page 46
17.6 Other arrangements The Bank may, without prejudice to its rights
under or pursuant to the Security Documents, at any time and from
time to time, on such terms and conditions as it may in its
discretion determine, and without notice to the Borrower, grant
time or other indulgence to, or compound with, any other person
liable (actually or contingently) to the Bank in respect of all or
any part of the Indebtedness, and may release or renew negotiable
instruments and take and release securities and hold funds on
realisation or suspense account without affecting the liabilities
of the Borrower or the rights of the Bank under or pursuant to the
Security Documents.
17.7 Advisers The Borrower irrevocably authorises the Bank, at any time
and from time to time during the Facility Period, to consult
insurance advisers on any matters relating to the Insurances,
including, without limitation, the collection of insurance claims,
and from time to time to consult or retain advisers or consultants
to monitor or advise on any other claims relating to the Vessel.
The Borrower will provide such advisers and consultants with all
information and documents which they may from time to time require
and will reimburse the Bank on demand for all costs and expenses
incurred by the Bank in connection with the consultation or
retention of such advisers or consultants.
17.8 Delegation The Bank may at any time and from time to time delegate
to any person any of its rights, powers, discretions and remedies
pursuant to the Security Documents on such terms as it may
consider appropriate (including the power to sub-delegate).
17.9 Rights etc. cumulative Every right, power, discretion and remedy
conferred on the Bank under or pursuant to the Security Documents
shall be cumulative and in addition to every other right, power,
discretion or remedy to which it may at any time be entitled by
law or in equity. The Bank may exercise each of its rights,
powers, discretions and remedies as often and in such order as it
deems appropriate. The exercise or the beginning of the exercise
of any right, power, discretion or remedy shall not be interpreted
as a waiver of the right to exercise that or any other right,
power, discretion or remedy either simultaneously or subsequently.
17.10 No enquiry The Bank shall not be concerned to enquire into the
powers of the Security Parties or of any person purporting to act
on behalf of any of the Security Parties, even if any of the
Security Parties or any such person shall have acted in excess of
their powers or if their actions shall have been irregular,
defective or informal, whether or not the Bank had notice thereof.
17.11 Continuing security The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall
have been repaid in full and the Bank shall be under no further
actual or contingent liability to any third party in relation to
the Vessel, the Insurances, Earnings, Charter Rights or
Requisition Compensation or any other matter referred to in the
Security Documents.
17.12 Security cumulative The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Bank for or in respect of all or any part of
the Indebtedness, and shall not merge with or prejudice or be
prejudiced by any such security or any other contractual or legal
rights of the Bank, nor affected by any irregularity, defect or
informality, or by any release, exchange or variation of any such
security. Section 93 of the Law of Property Xxx 0000 and all
provisions which the Bank considers analogous thereto under the
law of any other relevant jurisdiction shall not apply to the
security constituted by the Security Documents.
Page 47
17.13 Re-instatement If the Bank takes any steps to exercise any of its
rights, powers, remedies or discretions pursuant to the Security
Documents and the result shall be adverse to the Bank, the
Borrower and the Bank shall be restored to their former positions
as if no such steps had been taken.
17.14 No liability Neither the Bank nor any agent or employee of the
Bank, nor any receiver and/or manager appointed by the Bank, shall
be liable for any losses which may be incurred in or about the
exercise of any of the rights, powers, discretions or remedies of
the Bank under or pursuant to the Security Documents nor liable as
mortgagee in possession for any loss on realisation or for any
neglect or default of any nature for which a mortgagee in
possession might otherwise be liable.
17.15 Rescission of payments etc. Any discharge, release or reassignment
by the Bank of any of the security constituted by, or any of the
obligations of any Security Party contained in, any of the
Security Documents shall be (and be deemed always to have been)
void if any act (including, without limitation, any payment) as a
result of which such discharge, release or reassignment was given
or made is subsequently wholly or partially rescinded or avoided
by operation of any law.
17.16 Subsequent Encumbrances If, the Bank receives notice of any
subsequent Encumbrance affecting the Vessel, the Building
Contract, the Refund Guarantee or all or any part of the
Insurances, Earnings, Charter Rights or Requisition Compensation
or the Accounts, the Bank may open a new account in its books for
the Borrower. If the Bank does not open a new account, then
(unless the Bank gives written notice to the contrary to the
Borrower) as from the time of receipt by the Bank of notice of
such subsequent Encumbrance, all payments made to the Bank shall
be treated as having been credited to a new account of the
Borrower and not as having been applied in reduction of the
Indebtedness.
17.17 Releases If the Bank shall at any time in its discretion release
any party from all or any part of any of the Security Documents,
the liability of any other party to the Security Documents shall
not be varied or diminished.
17.18 Discretions Unless otherwise expressly indicated, where the Bank
is stated in the Security Documents to have a discretion and/or
where the opinion of the Bank is referred to and/or where the
consent, agreement or approval of the Bank is required for any
course of action, or where anything is required to be acceptable
to the Bank, the Bank shall have a sole, absolute and unfettered
discretion and/or may give or withhold its consent, agreement or
approval at its sole, absolute and unfettered discretion.
17.19 Certificates Any certificate or statement signed by an authorised
signatory of the Bank purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for
manifest error or on any question of law, be conclusive evidence
as against the Borrower of that amount.
17.20 Survival of representations and warranties The representations and
warranties on the part of the Borrower contained in this Agreement
shall survive the execution of this Agreement and the advance of
the Loan.
17.21 Counterparts This Agreement may be executed in any number of
counterparts each of which shall be original but which shall
together constitute the same instrument.
17.22 Contracts (Rights of Third Parties) Xxx 0000 No term of the
Agreement is enforceable by a person who is not a party to it.
17.23 Alternative Arrangements
17.23.1 If the Borrower wishes to enter into other arrangements
in respect of the operation the Vessel, the Bank shall,
if so requested in writing by the Borrower, discuss in
good faith for a period of up to 60 days the possible
restructuring of the security arrangements contemplated
by this Agreement so as to permit such arrangements but
such restructuring may only be implemented if the Bank
approves it in writing (such approval not to be
unreasonably withheld) and such supplemental
documentation entered into and conditions precedent
fulfilled as the Bank may in its absolute discretion
require.
If any such restructuring is approved in principle by
the Bank, the Bank shall co-operate in good faith with
the Borrower in the implementation of such restructuring
within such period as may be agreed at the relevant
time.
Page 48
18 Law and Jurisdiction
18.1 Governing law This Agreement shall in all respects be governed by
and interpreted in accordance with English law.
18.2 Jurisdiction For the exclusive benefit of the Bank, the parties to
this Agreement irrevocably agree that the courts of England are to
have jurisdiction to settle any disputes which may arise out of or
in connection with this Agreement and that any Proceedings may be
brought in those courts.
18.3 Alternative jurisdictions Nothing contained in this Clause shall
limit the right of the Bank to commence any Proceedings against
the Borrower in any other court of competent jurisdiction nor
shall the commencement of any Proceedings against the Borrower in
one or more jurisdictions preclude the commencement of any
Proceedings in any other jurisdiction, whether concurrently or
not.
18.4 Waiver of objections The Borrower irrevocably waives any objection
which it may now or in the future have to the laying of the venue
of any Proceedings in any court referred to in this Clause, and
any claim that those Proceedings have been brought in an
inconvenient or inappropriate forum, and irrevocably agrees that a
judgment in any Proceedings commenced in any such court shall be
conclusive and binding on it and may be enforced in the courts of
any other jurisdiction.
18.5 Service of process Without prejudice to the right of the Bank to
use any other method of service permitted by law, the Borrower
irrevocably agrees that any writ, notice, judgment or other legal
process shall be sufficiently served on it if addressed to it and
left at or sent by post to the Address for Service, and in that
event shall be conclusively deemed to have been served at the time
of leaving or, if sent by registered post, on receipt at the
Address for Service.
IN WITNESS of which the parties to this Agreement have executed this
Agreement the day and year first before written.
Page 49
Schedule 1
Annuity and Interest Rates
Page 50
Schedule 2
Calculation of the Mandatory Cost
(a) The Mandatory Cost for the Loan for each Interest Period is the rate
determined by the Bank in accordance with the following formulae:
(i) where the Loan is denominated in Sterling:
BY + S(Y-Z) + F x 0.01 % per annum = Mandatory Cost
----------------------
100- (B+S)
(ii) where the loan is denominated in any other Permitted Currency:
F x 0.01 % per annum = Mandatory Cost
--------
300
where on the day of application of the formula:
B is the percentage of the Bank's eligible liabilities (in excess of
any stated minimum) which the Bank of England requires the Bank to
hold on a non-interest-bearing deposit account in accordance with
its cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the Bank to
leading banks in the London Interbank market at or about 11.00
a.m. on that day for the Interest Period in question;
S is the percentage of the Bank's eligible liabilities which the
Bank of England requires the Bank to place as a special deposit;
Z is the interest rate per annum allowed by the Bank of England on
special deposits; and
F is the charge payable by the Bank to the Financial Services
Authority under paragraph 2.02 or 2.03 (as appropriate) of the
Fees Regulations or the equivalent provisions in any replacement
regulations (with, for this purpose, the figure for the minimum
amount in paragraph 2.02b or such equivalent provision deemed to
be zero), expressed in pounds per (pound)1 million of the fee base
of the Bank.
Page 51
(b) For the purpose of this Schedule :
(i) "eligible liabilities" and "special deposits" have the meanings
given to them at the time of application of the formula by the
Bank of England;
(ii) "fee base" has the meaning given to it in the Fees Regulations;
(iii) "Fees Regulations" means:-
(A) up to and including 31 March 2002, the Banking Supervision
(Fees) Regulations 2001; and
(B) after that date any regulations governing the payment of
fees for banking supervision;
(c) In the application of the formula B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
BY is calculated as 0.5. x 15.
(d) (i) The formula is applied on the first day of each Interest Period.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
(e) If a change in circumstances has rendered, or will render, the formula
inappropriate, the Bank shall notify the Borrower of the manner in which
the Mandatory Cost will subsequently be calculated. The manner of
calculation so notified by the Bank shall, in the absence of manifest
error, be binding on the Borrower.
SIGNED by )
duly authorised for and on behalf )
of GOLAR LNG 2215 CORPORATION )
SIGNED by )
duly authorised for and on behalf )
of LLOYDS TSB BANK PLC )
Page 52
APPENDIX A
To: Lloyds TSB Bank plc
From: Golar LNG 2215 Corporation
[Date]
Dear Sirs,
Drawdown Notice
We refer to the Loan Agreement dated 2001 made between ourselves and
yourselves ("the Agreement").
Words and phrases defined in the Agreement have the same meaning when
used in this Drawdown Notice.
Pursuant to Clause 2.3 of the Agreement, we irrevocably request that you
advance a Drawing of [ ] to us on 200 , which is a Business Day, by paying the
amount of the Drawing to the Builder [in accordance with instructions given to
you by the Builder].
We warrant that the representations and warranties contained in Clause 4
of the Agreement are true and correct at the date of this Drawdown Notice and
will be true and correct on 200 ; that no Event of Default nor Potential Event
of Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Drawing requested
in this Drawdown Notice.
[We select the period of [ ] months as the first Interest Period.]
Yours faithfully
.......................
For and on behalf of
Golar LNG 2215 Corporation
Page 53
