(AS FURTHER REVISED BY HTD ON 26.11.02)
DATED 2002
CREDIT FACILITY AGREEMENT
(1) TORCH OFFSHORE INC
(2) GLOBAL MARINE SYSTEMS LIMITED
RELATING TO THE VESSEL "WAVE ALERT"
TO BE RENAMED "MIDNIGHT WRANGLER"
Hill Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx
Xxxx'x Xxxxx
Xxxxxx XX0X 0XX
INDEX
CLAUSE PAGE
1 DEFINITIONS 1
2 LENDER'S COMMITMENTS 5
3 USE OF PROCEEDS 6
4 AVAILABILITY 6
5 INTEREST 6
6 REPAYMENT AND PREPAYMENT 7
7 TAXES 7
8 ILLEGALITY AND CHANGES IN CIRCUMSTANCES 8
9 REPRESENTATIONS AND WARRANTIES 8
10 CONDITIONS PRECEDENT 10
11 COVENANTS OF THE BORROWER 12
12 EVENTS OF DEFAULT 13
13 PAYMENT 15
14 COSTS 16
15 BENEFIT OF THIS AGREEMENT 16
16 INDEMNITY 16
17 FURTHER ASSURANCE 17
18 PROVISIONS PROHIBITED BY LAW 17
19 RIGHTS OF LENDER 17
20 NOTICES 18
21 GOVERNING LAW 18
22 JURISDICTION 18
23 COUNTERPARTS 19
24 UNDERTAKINGS OF THE LENDER 19
THIS FACILITY AGREEMENT is made the day Two Thousand and
Two
BETWEEN:-
(1)
TORCH OFFSHORE INC. a corporation duly incorporated under the laws of
the State of Delaware, United States of America whose principal place
of business is situate at Xxxxx 000, 000, Xxxxxxx Xxxxxx, Xxxxxx 70056,
Louisiana, United States of America, their successors and permitted
assigns (the "Borrower"); and
(2) GLOBAL MARINE SYSTEMS LIMITED a company incorporated under the laws of
England and Wales whose registered office is at East Saxon House, 00
Xxxx Xxxxxx, Xxxxxxxxxx XX0 0XX their successors and permitted assigns
(the "Lender").
WHEREAS:-
(A) Pursuant to the MoA (as hereinafter defined) the Borrower has agreed to
purchase the Vessel from the Lender.
(B) The Lender has agreed to make available to the Borrower a credit
facility of up to Nine Million, Seven Hundred and Thirty One Thousand,
Four Hundred and Seventeen United States Dollars (US$9,731,417) subject
to the terms and conditions contained in this Agreement (the
"Facility").
(C) The Facility is provided for the purpose of assisting the Borrower in
the purchase of the Vessel from the Lender pursuant to the MoA.
(D) This Facility is to be secured by a Mortgage over the Vessel together
with an Assignment of the Insurances of the Vessel.
NOW IT IS AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement the expressions "Environmental Claim", "Environmental
Incident", "Insurances" and "Total Loss" shall have the meanings
ascribed to them in the Mortgage and the following expressions shall
have the following meanings:-
"AGREEMENT" means this agreement as originally executed or as it may
from time to time be supplemented, amended, novated and/or varied.
"AVAILABILITY DATE" means the Business Day on which title to the Vessel
passes to the Borrower pursuant to the documents to be delivered under
the
MoA and the Facility is also made available to the Borrower in
accordance with and subject to the terms of Clauses 4 and 10 hereof;
"BUSINESS DAY" means a day on which banks are open for business and for
dealings in foreign currency deposits in New Orleans, New York and
London.
"CONDITIONS PRECEDENT" means any or all of the conditions in Clause 10.
"DEED OF GENERAL ASSIGNMENT" means the Deed of General Assignment of
all the Insurances of the Vessel to be executed by the Borrower in
favour of the Lender substantially in the form set out in Appendix "A"
(or such other form as the Lender may require or agree to in writing).
"DEFAULT RATE" means one per cent (1%) above LIBOR with a minimum of
seven per cent (7%) per annum.
"DELIVERY" means delivery of the Vessel by the Lender (as seller) to
the Borrower (as buyer) pursuant to the MOA;
"DOLLARS" and "$" means the lawful currency of the United States of
America;
"ENCUMBRANCE" means any mortgage, pledge, lien, charge, assignment by
way of security, hypothecation or any other security arrangement
whatsoever.
"EVENT OF DEFAULT" means any of the events or circumstances set out in
Clause 12.
"FACILITY" means the facility of up to Nine Million, Seven Hundred and
Thirty Xxx Xxxxxxxx, Xxxx Xxxxxxx xxx Xxxxxxxxx Xxxxxx Xxxxxx Dollars
(US$9,731,417) or, where the context so admits, the principal amount
thereof from time to time outstanding;
"FACILITY PERIOD" means the period from the Availability Date to the
fifth anniversary thereof or the date upon which the Outstanding
Indebtedness has been paid in full (whichever is the earlier);
"INTEREST RATE" means the rate of seven per cent (7%) per annum;
"ISM CODE" means the International Safety Management Code for the Safe
Operation of Ships and for Pollution Prevention adopted by the
International Maritime Organisation on 4th November 1993 incorporated
as Chapter IX of the International Convention for Safety of Life at Sea
1974 as amended.
"LIBOR" means the rate per annum of the British Bankers' Association
Interest Settlement Rate for deposits in Dollars (rounded upwards to
the nearest one-sixteenth of one per cent (1/16%) if a split rate is
shown) which appears on the relevant page of the Reuters Service (or if
such page or service
2
ceases to be available, such other page or service as the case may be)
for the purpose of displaying an average British Bankers' Association
Interest Settlement Rate for one month deposits in Dollars at or about
11.00 a.m. on the first Business Day following an Event of Default
under this Agreement.
"MoA" means the Memorandum of Agreement between the Lender and the
Borrower dated November 2002 together with any and all subsequent
addenda in respect of the sale by the Lender to and the purchase by the
Borrower of the Vessel.
"MORTGAGE" means the First Preferred Vanuatu Mortgage to be executed by
the Borrower over the Vessel in favour of the Lender substantially in
the form set out in Appendix "B" (or in such other form as the Lender
may require or agree in writing).
"OUTSTANDING INDEBTEDNESS" means the aggregate of the Facility, accrued
interest thereon and any other monies or costs whatsoever payable to
the Lender from time to time under this Agreement and the Security
Documents.
"PAYMENT DATE" means a date on which an instalment of the Facility
becomes due and payable by the Borrower pursuant to the terms of Clause
6.
"PERMITTED ENCUMBRANCE" means:
(a) any Encumbrance constituted by, or granted pursuant to, a
Security Document;
(b) any Seller's Lien;
(c) any lien for salvage or general average;
(d) any lien for Master's, officers' or crew's wages outstanding
in the ordinary course of business;
(e) any lien for Master's disbursements incurred and outstanding
in the ordinary course of business;
(f) any Encumbrance arising in the ordinary course of business by
statute or by operation of law in respect of obligations which
are overdue (inclusive of any grace period) or which are being
contested in good faith by appropriate proceedings, if and so
long as any such proceedings or the continued existence of
such Encumbrance do not involve any likelihood of the sale,
forfeiture or loss of the Vessel or any interest therein;
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(g) (subject to clause 6.1(N) of the Mortgage) any repairer's or
outfitter's possessory lien;
(h) any other Encumbrance which the Borrower and Lender agree in
writing shall be a Permitted Encumbrance.
"PURCHASE DOCUMENTS" means the MoA and all the contracts, agreements,
bills of sale and other documents provided therein, whereby the
Borrower has contracted to purchase and will acquire title to the
Vessel.
"POTENTIAL EVENT OF DEFAULT" means any event which with the giving of
notice, lapse of time or any combination thereof would constitute an
Event of Default.
"PURCHASE PRICE" means the price at which the Lender has agreed to sell
and the Borrower has agreed to buy the Vessel as set out in the MoA.
"RECEIVING BANK" means The Royal Bank of Scotland, Corporate Banking
Office, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0 or such other bank as may
from time to time be notified by the Lender to the Borrower.
"SECURITY DOCUMENTS" means this Agreement, the Deed of General
Assignment, the Mortgage and, where the context permits, any other
securities, guarantees or undertakings whatsoever which the Borrower
has agreed to procure and/or which may be executed at any time in
respect of the Facility.
"SELLER'S LIEN" means any Encumbrance created, or permitted to arise or
subsist, by the Lender prior to Delivery or which arises as out of or
as a result of:
(a) any act or omission of the Lender; or
(b) any claim against or affecting the Lender; or
(c) the ownership, operation, maintenance, repair, modification,
chartering or use of the Vessel by the Lender prior to
Delivery.
"SUBSIDIARY" has the meaning ascribed to it under the Companies Xxx
0000 and the word "Subsidiaries" shall be construed accordingly.
"TANGIBLE NET WORTH" at any time means the aggregate at such time of:-
(i) the amounts paid up, or credited as paid up, on the issued
share capital of the Borrower;
(ii) any credit balance on the profit and loss account of the
Borrower; and
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(iii) any amount standing to the credit of any other capital and
revenue reserves of the Borrower including any share premium
account and capital redemption reserve;
less the aggregate at such time of:-
(i) any debit balance on the profit and loss account of the
Borrower;
(ii) all amounts attributable to goodwill and other intangible
assets;
(iii) any surplus on any revaluation of property or assets after
31st December 2001 (being the date as at or to which the
latest audited financial statements of the Borrower have been
prepared); and
(iv) any reserves attributable to interests of minority
shareholders in any Subsidiary.
(and so that no amount shall be included or excluded more than once);
"VESSEL" means the vessel known as "WAVE ALERT" to be renamed "MIDNIGHT
WRANGLER" once purchased from the Lender pursuant to the MoA and
registered under the Vanuatu Flag in the port of Vila in the ownership
of the Borrower.
1.2 Where the context so admits words importing the singular number only
shall include the plural and words importing persons shall include
references to any individual company, body corporate, association,
partnership, firm, joint venture, trust and Governmental Entity. Clause
headings are inserted for convenience or reference only and shall be
ignored in construing this Agreement. References to Clauses and
Appendices are to clauses of and appendices to this Agreement save as
may be otherwise expressly provided. Month means calendar month.
References to each of the parties hereto shall be deemed to be
references to or to include, as appropriate, their respective
successors and permitted assigns and references to any document are to
be construed as references to such document as amended, varied or
supplemented from time to time. Further references to any law are
references to that law as amended, consolidated, supplemented or
replaced from time to time and references to law include references to
any constitutional provision, treaty, decree, convention, statute, act,
regulation, rule, ordinance, subordinate legislation, rule of common
law and of equity and judgment.
2. THE LENDER'S COMMITMENT
2.1 In reliance upon each of the representations and warranties set forth
in Clause 9 and subject always to the terms, covenants and conditions
of this
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Agreement being complied with, the Lender will make the Facility
available to the Borrower on and with effect from the Availability
Date.
3. USE OF PROCEEDS
3.1 The purpose of the Facility is to assist the Borrower with the
financing by it of the balance of the Purchase Price of the Vessel as
specified in the MOA.
3.2 Simultaneously with Delivery, the Facility (being an amount equal to
the balance of the Purchase Price) shall be advanced, and deemed hereby
to be advanced, by the Lender to the Borrower. The proceeds of the
Facility shall be applied in or towards discharge of the Borrower's
obligations to pay the Purchase Price under the MOA.
4. AVAILABILITY
4.1 The availability of the Facility on the Availability Date shall be
subject to compliance by the Borrower with the following conditions:-
(A) no event having occurred which is an Event of Default or
Potential Event of Default;
(B) the representations and warranties contained in Clause 9 being
true and correct on the Availability Date; and
(C) fulfillment to the satisfaction of the Lender of all the
Conditions Precedent.
4.2 The availability of the Facility is subject to fulfillment to the
Lender's satisfaction of all Conditions Precedent and no Event of
Default or potential Event of Default having occurred. Thus, if any
such relevant condition has not been fulfilled or any such event has
occurred the Facility shall not be available. Notwithstanding the
foregoing the Lender may in its absolute discretion and by notice in
writing waive compliance with any Conditions Precedent or the
occurrence of an Event of Default or Potential Event of Default prior
to the Facility becoming available provided always that the Borrower
hereby covenants in those circumstances to comply with or procure the
compliance with such condition or, as the case may be, to remedy such
default within any period specified in such notice or subsequently
notified in writing to the Borrower and failure to do so shall be
deemed to constitute the occurrence of an Event of Default.
5. INTEREST
5.1 Save as otherwise provided herein, the Borrower shall pay to the Lender
interest at the Interest Rate on the Facility or the relevant amount
thereof outstanding from time to time and in the amounts for the
relevant month
6
specified in Appendix C hereto on each Repayment Date as provided in
Clause 6.1 hereof.
5.2 In the event of any default by the Borrower in the payment on the due
date of any sum payable pursuant to the terms of this Agreement, the
Borrower will pay to the Lender interest on the sum overdue at the
Default Rate thereon from the date of such default up to the date of
actual payment (as well after as before judgment). Such interest shall
be payable on demand.
5.3 Interest accruing under Clause 5.2 shall accrue on a daily basis and a
three hundred and sixty five day year.
6. PAYMENT AND PREPAYMENT
6.1 Save as otherwise provided herein, the Facility, together with interest
at the Interest Rate shall be paid down by the Borrower to the Lender
over the Facility Period by fifty eight consecutive Monthly instalments
of One Hundred and Eighty One Thousand One Hundred and Seventy Five
Dollars (US$181,750), the first such instalment being payable on the
day following one Month after the Availability Date and each subsequent
instalment on the same day of each Month thereafter, followed by one
final instalment of One Million One Hundred and Eighty One Thousand One
Hundred and Seventy Five Dollars (US$1,181,750) payable on the same day
in the last Month of the Facility Period. If any payment is due on a
day that is not a Business Day then the due date in respect thereof
shall be extended to the next succeeding Business Day, unless such
Business Day falls in the next Month, in which event such due date
shall be the immediately preceding Business Day. The Borrower will pay
to the Lender with the final instalment all other sums then outstanding
or payable hereunder.
6.2 Following the Availability Date the Borrower may prepay the whole of
the Facility, but not part thereof upon giving to the Lender not less
than 30 (thirty) Business Days or such shorter period as the Lender may
agree prior written notice. Once such notice of prepayment is given it
shall be irrevocable and shall bind the Borrower to prepay the whole of
the Facility then outstanding.
6.3 If any part of the principal amount of the Outstanding Indebtedness is
discharged by set-off pursuant to Clause 24.3, such amount set off
shall be appropriated to reduce the remaining instalments (or such part
thereof) in order of maturity.
7. TAXES
7.1 Subject to Clause 24.3 all payments (whether of principal interest or
otherwise) to be made by the Borrower to the Lender hereunder or under
the Security Documents shall be made free and clear and without
set-off, counterclaim, deduction of any taxes, levies, imposts, duties,
charges, fees,
7
deductions, withholdings, restrictions or conditions of any nature. If
at any time any applicable law requires the Borrower to make any such
deduction or withholding from any such payment, the sum due from the
Borrower in respect of such payment shall be increased to the extent
necessary to ensure that, after the making of such deduction or
withholding, the Lender receives a net sum equal to the sum which it
would have received had no such deduction or withholding been required
to be made.
7.2 All fees and expenses payable by the Borrower pursuant to this
Agreement and/or the Security Documents shall be paid together with
Value Added Tax or any similar tax (if applicable).
8. ILLEGALITY AND CHANGE IN CIRCUMSTANCES
8.1 If any change in applicable law or any interpretation of it makes it
(or makes it apparent that it is) unlawful or impossible for the
Borrower to perform its obligations under this Agreement or the
Security Documents:-
(A) the Lender shall be discharged from all obligations to make
available or maintain the Facility; and
(B) the Borrower shall forthwith on demand pay to the Lender the
amount of the Outstanding Indebtedness.
8.2 If any change in applicable law or any interpretation of it makes it
(or makes it apparent that it is) unlawful or impossible for the Lender
to perform its obligations under this Agreement and the Facility has
not been advanced, the Lender shall be discharged from its obligation
to make available or maintain the Facility and the Borrower shall be
entitled to cancel the MOA in accordance with additional clause 18 of
the MOA.]
9. REPRESENTATIONS AND WARRANTIES
9.1 The Borrower hereby represents and warrants to the Lender with the
intent that each representation warranty and undertaking shall continue
in full force and effect so long as there is any Outstanding
Indebtedness and that each such representation, warranty and
undertaking shall be true and accurate as at the date of this Agreement
and at the Availability Date and (except in the case of paragraph (H)
below) each Repayment Date:-
(A) That it is duly incorporated and validly existing and in good
standing under the laws of the State of Delaware, United
States of America.
(B) That it has power to purchase the Vessel pursuant to the MoA,
to own it and enter into this Agreement and the Security
Documents (and in particular the Borrower has power to enter
into a Mortgage as security for the Outstanding Indebtedness)
and the Borrower has taken all necessary corporate or other
action to authorise the purchase of the Vessel by it and the
borrowing on the terms and conditions of this Agreement and
the Security Documents and the Borrower has taken all
8
necessary corporate or other action to authorise the execution
and delivery of each of this Agreement and the Security
Documents and their performance according to their respective
terms.
(C) That it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement
or any of the Security Documents (apart from the Mortgage)
that any of them be filed, recorded or enrolled with any
governmental authority or agency of or in any country where
the Borrower carries on business or the Vessel is registered
or that any of them be stamped with any stamp or similar
transaction tax in any such country.
(D) That all consents, licences, approvals or authorisations of or
declarations to governmental authorities and agencies required
to make this Agreement and the Security Documents legal,
valid, enforceable or admissible in evidence have been
obtained or made and are in full force and effect.
(E) That the execution and delivery of this Agreement and the
Security Documents and their performance according to their
respective terms will not violate:-
(i) the constitutional documents of the Borrower;
(ii) any applicable law or regulation or order or decree
of any governmental authority or agency; or
(iii) any mortgage, deed or agreement which is binding upon
the Borrower or its assets.
(F) That the Borrower has not been declared in breach of or in
default under any mortgage, or credit facilty which is binding
upon it or any of its assets and (subject to compliance by the
Lender with its obligation to deliver the Vessel to the
Borrower free of Encumbrances in accordance with the MOA)
there are no arrangements in place in respect of the Vessel
which will take priority to the Lender's position as mortgagee
under the Mortgage.
(G) That no material litigation or administrative proceeding of or
before any court or governmental authority or agency is
pending or (to the Borrower's knowledge) threatened, (save
those lawsuits disclosed in the Borrower's 10Q report to the
US Securities and Exchange Commission dated 30 September 2002,
but, for the avoidance of doubt, when this warranty is
repeated any material change to the position of
9
the litigation disclosed in such report shall be notified to
the Lender) the result of which would or might be to have a
material adverse effect on any of the Borrower's business,
assets or financial condition such as to prejudicially affect
its ability to comply with its obligations under any of this
Agreement or the Security Documents (as the case may be).
(H) That the Borrower will upon delivery to it by the Lender be
the sole unencumbered (save only for the Mortgage contemplated
hereby and subject as aforesaid in paragraph (F) above) lawful
owner of the Vessel which will be duly registered and
documented in its name under the Vanuatu Flag.
(I) That upon execution and delivery to the Lender (and, in the
case of the Mortgage only, registration with the appropriate
governmental authority of the Republic of Vanuatu), this
Agreement and the Security Documents will constitute valid and
binding obligations of the Borrower (so far as it is a party
to them).
(J) That all factual information furnished by the Borrower
relating to the business and affairs of the Borrower in
connection with this Agreement and the Security Documents was
true and correct in all material respects and that there are
no other material facts or considerations the omission of
which would render any such information misleading.
(K) That no Event of Default or Potential Event of Default has
occurred or is continuing.
10. CONDITIONS PRECEDENT
10.1 The Lender shall be under no obligation to make the Facility available
to the Borrower (except as provided by Clause 4) until it has received
each of the following documents in a form and manner acceptable in all
respects to the Lender or the Lender's legal advisers (unless and to
the extent that receipt of any such document shall have been waived in
writing by the Lender):-
(A) certified true copies of the constitutional documents of the
Borrower and evidence of its good standing;
(B) resolutions in original of the Directors of the Borrower
approving the entering into of the MoA (and the purchase of
the Vessel), this Agreement and the Security Documents and the
execution, delivery and performance thereof insofar as they
relate to it and authorising some person or persons by power
of attorney to execute any and all documents necessary for the
Borrower to purchase the Vessel and for the Borrower to
execute and deliver this Agreement and the Security Documents
to the Lender;
10
(C) originals of the powers of attorney executed in pursuance of
the above-mentioned board resolutions referred to in Clause
10.1(B) above, duly notarised and legalised;
(D) a copy of the protocol of delivery and acceptance for the
Vessel duly signed by the Borrower and the Lender;
(E) such evidence as the Lender may require:-
(i) that (subject to compliance by the Lender with its
obligation under the MOA to deliver the Vessel to the
Borrower free of Encumbrances) the Vessel is free
from all encumbrances and liens and charters upon
delivery of the Vessel by the Lender to the Borrower
and further no charter or employment agreements have
been entered into which will take priority to the
Mortgage;
(ii) that the Vessel will upon being purchased by the
Borrower be registered under the Vanuatu Flag in the
name of the Borrower;
(iii) that the Vessel is insured in accordance with the
provisions of the Mortgage (including there having
been effected in the Lender's name mortgagees'
interest insurance and mortgagees interest insurance
additional perils (pollution cover)) and the Deed of
Assignment;
(iv) that following the Availability Date there shall be
delivered to the Lender letters of undertaking from
Hull and Machinery, War Risks and Protection and
Indemnity Underwriters' Associations or Brokers in
respect of the Insurances taken out on the Vessel in
such form as shall be satisfactory to the Lender;
(F) the Security Documents all duly executed by the Borrower or
the other parties thereto including all notices collateral
thereto (if any) all in a form satisfactory to the Lender and
evidence that the Mortgage and any other documents which are
required to be registered in the Republic of Vanuatu and/or
any company registries or elsewhere will be or are so
registered within the relevant time limits prescribed;
(G) confirmation from Xxxxx & Co that they will act as agents for
service of process in England of the Borrower;
(H) such legal opinions from a Vanuatu lawyer appointed by the
Lender on the registration of the Vessel and the Mortgage;
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11. COVENANTS OF THE BORROWER
11.1 So long as any part of the Outstanding Indebtedness remains
undischarged the Borrower covenants and undertakes for the benefit of
the Lender:-
(A) To perform and observe the covenants and obligations imposed
upon it hereunder and under the Security Documents.
(B) Within three (3) Business Days after it acquires knowledge of
the occurrence of a Potential Event of Default or any other
event which is or would with the passage of time or the giving
of notice, be an Event of Default, to give notice to the
Lender thereof and specify the steps it intends to take to
remedy such situation.
(C) To duly pay and discharge all taxes, assessments and
governmental charges upon it or against its property prior to
the date on which penalties are attached thereto, unless and
to the extent only that the same shall be contested in good
faith and by appropriate legal proceedings.
(D) To place on board the Vessel the Certificate of Registration
thereof and a copy of the Mortgage over it as promptly as
practicable following recordation thereof.
(E) To maintain valid adequate and sufficient Insurances on the
Vessel and to provide the Lender as soon as possible after the
Availability Date with copies of the policies relating to the
Insurances.
(F) To arrange that the Vessel's classification be maintained at
all times throughout the Facility Period and that such
classification shall be renewed within the relevant time limit
and no recommendation shall become overdue.
(G) To ensure and arrange that the persons responsible for the
operation of the Vessel obtain certification for themselves
and the Vessel as and when required by the ISM Code and
maintain such certification so that they are not withdrawn or
cancelled.
(H) Not to sell or further mortgage or encumber the Vessel (apart
from the Mortgage) without the prior written consent of the
Lender.
(I) That it will not without the prior written consent of the
Lender:-
(i) create, incur, assume or allow to exist any
Encumbrance on the Vessel or income arising therefrom
or any part of its property or assets except for any
Permitted Encumbrance or any charter on the Vessel,
which does not contravene the provisions of Clause
6(M) of the Mortgage;
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(ii) borrow any further monies in relation to the Vessel
other than contemplated hereby;
(iii) appoint any manager to the Vessel;
(J) To supply to the Lender within one hundred and eighty (180)
days of the end of each of its fiscal or financial years a
copy of the Borrower's annual financial statement or accounts
for the relevant year and within sixty (60) days of the end of
each half year its interim financial statements and accounts
for that period;
(K) To supply the Lender from time to time with all such
information regarding its business, assets and regarding the
Vessel (including its movements and employment) as the Lender
may reasonably request;
(L) To ensure that
its Tangible Net Worth does not fall below US$60,000,000;
(M) To supply such information as the Lender may from time to time
reasonably request with regard to the Insurances so as to
enable the Lender to ensure the Borrower is complying with its
obligations in respect thereof.
12. EVENTS OF DEFAULT
12.1 If any of the following Events of Default occur, then the Lender shall
be discharged from all obligations to make or maintain the Facility and
the Lender may by written notice to the Borrower declare the
Outstanding Indebtedness to be immediately payable whereupon the same
shall become so due and payable and all monies thereafter received
shall be applied in the manner set out in Clauses 13.2.
12.2 The Event of Default are:
(A) If the Borrower does not pay any sum of money payable under
this Agreement or the Security Documents on its due date
(which for this purpose means a Payment Date, or in respect of
moneys payable on demand means, unless otherwise specifically
provided, within five (5) Business Days from such demand) or
defaults in the due payment of any sum which has become due
and payable hereunder or under the Security Documents.
(B) The occurrence of any Event of Default specified in the
Mortgage.
(C) If the Borrower or any other party to any of the Security
Documents (except the Lender) defaults in the due performance
and observance of
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any of the terms, covenants and conditions on its part
contained in this Agreement or the Security Documents (other
than relating to payments which shall be governed by
sub-clause (A) above or the covenants given in Clause 11 (E),
(F), (G), (H) and (L) which result in an immediate default)
and such default continues unremedied for a period of twenty
eight (28) days after the Lender has given to the Borrower a
written notice of such default.
(D) If any representation or warranty made by the Borrower, or any
other party to any of the Security Documents (except the
Lender) in this Agreement or the Security Documents or any
notice, certificate or statement delivered or made pursuant
hereto or thereto proves to have been incorrect, inaccurate or
misleading in any material respect and which has or is likely
to have material consequences.
(E) If the Borrower or any party to the Security Documents (except
the Lender) shall be unable to pay or shall admit its, their
or his inability to pay its their or his lawful debts as they
mature.
(F) If the Borrower shall convene a meeting of or propose to enter
into any arrangement with its creditors generally.
(G) If a distress or other execution is levied or sued out upon or
against any material part of the property of the Borrower and
is not discharged within five (5) Business Days.
(H) If the Borrower suspends its operations or transfers or
disposes of all or (without the prior written consent of the
Lender such consent not to be unreasonably withheld) a
substantial part of its assets.
(I) If a petition is filed at (and is not discharged, withdrawn or
stayed within 60 days) or an order or judgment is made or
given by any Court or an effective resolution is passed for
the liquidation, winding-up or re-organisation of the Borrower
(otherwise than for reconstruction while solvent) or for the
appointment of a receiver, administrator, trustee, conservator
or liquidator of the Borrower or of all or a substantial part
of its undertaking or assets, or anything analogous (including
Chapter 11 proceedings in the United States) to any of the
foregoing events or occasions occurs in any applicable
jurisdiction to which the Borrower (or its assets) may be
subject from time to time.
(J) If any Governmental consent required by law for the validity,
enforceability or performance in accordance with its terms of
this Agreement or the Security Documents is not obtained or is
withdrawn or ceases to be in full force and effect for any
reason.
14
(K) If the Borrower ceases to be a corporation registered in the
State of Delaware and in good standing.
(L) If there is a material adverse change in the financial
situation of the Borrower, affecting its ability to meet its
repayment obligations hereunder, because of, inter alia, the
Borrower having to repay prematurely any loan or monies
borrowed by the Borrower or any security given by the Borrower
becoming enforceable.
(M) If the Borrower, or any other company owned by it defaults
under any other loan facility advanced to it at the date
hereof or which at any time in the future is advanced to it,
which default will affect its ability to meet its repayment
obligations hereunder.
13. PAYMENT
13.1 The Lender will maintain an account showing the amount of the Facility
from time to time outstanding and other charges and expenses and all
payments in respect thereof made by the Borrower from time to time
pursuant to the terms of this Agreement.
13.2 From and after the occurrence of an Event of Default or a Potential
Event of Default all monies whatsoever received by or on behalf of the
Lender under and pursuant to one or more of the Security Documents
(including all sums payable in the event of a Total Loss) or otherwise
howsoever in connection with the Outstanding Indebtedness may be
applied, in the following manner in such order as the Lender considers
appropriate:-
(A) in or towards satisfaction of all sums due hereunder and under
the Security Documents other than payment instalments and
default interest on the Facility (including, without
limitation, the costs incurred by the Lender in enforcing its
security);
(B) in or towards satisfaction of default interest accrued on the
Facility;
(C) in or towards satisfaction of the Facility (whether or not
then due and payable);
(D) the remainder, if any, in payment to the Borrower, or such
other person as may for the time being be entitled thereto.
13.3 If any sum payable under this Agreement or the Security Documents shall
become due on a day which is not a Business Day, the due date in
respect thereof shall be extended to the next succeeding Business Day,
unless such Business Day falls in the next Month in which event such
due date shall be the immediately preceding Business Day.
15
13.4 Subject as provided in this Agreement all payments or default interest
or other sums which may fall to be made under this Agreement shall be
made to the Lender's account at the Receiving Bank (Account No.
GLMASY-USDC, swift no RBOSB2L) (or such other account as the Lender
shall from time to time notify to the Borrower) not later than 15.00
hours New York time on the due date in Dollars.
14. COSTS
14.1 The Borrower will pay all the costs, fees and expenses of the Lender,
and also the fees and disbursements of the Lender's lawyers,
accountants, surveyors, or other experts for any advice or services
which the Lender may deem it necessary or expedient to obtain in
connection with the carrying out of this Agreement or the Security
Documents (which for the avoidance of doubt shall include all notary
fees, registration fees, costs and expenses relating to the
registration of the ship under the Vanuatu Flag, the creation of the
Mortgage and any legal opinion thereon, but shall not include the
Lender's own costs in preparing this Agreement and the Security
Documents, or attending at Delivery) and the maintenance or enforcement
of the security thereby given, shall pay all stamp and other duties and
taxes (if any) (including Value Added Tax) to which this Agreement or
the Security Documents may be subject and indemnify the Lender for and
against all costs, expenses and liabilities with respect to or
resulting from any delay in paying or omission to pay any such duties
or taxes.
15. BENEFIT OF AGREEMENT
15.1 This Agreement shall be binding upon the Borrower and its successors
and assigns and shall inure to the benefit of the Lender and its
successors and assigns, but the Borrower may not assign or transfer any
of its rights, benefits or obligations hereunder or under the Security
Documents, save with the prior written consent of the Lender. The
Lender shall be entitled to assign all its rights and benefits
hereunder without the consent of the Borrower, provided that such
assignment is not to any of the Borrower's banks (which the Borrower
has notified the Lender prior to the date hereof) or to other
institutions prohibited by the United States of America at the time of
such assignment.
16. INDEMNITY
16.1 The Borrower hereby indemnifies and agrees to indemnify the Lender and
to hold the Lender harmless against any and all costs, expenses or
liabilities as certified by the Lender which the Lender may reasonably
sustain or incur directly or indirectly as a consequence of or in
connection with or arising out of:-
16
(A) any default in paying down the Facility (or any part thereof)
or in payment of any interest at the Default Rate accrued
thereon or any other amount payable pursuant to the terms of
one or more of the Security Documents;
(B) all costs incurred by the Lender in acquiring any other
currency other than Dollars, if the Borrower meets any
obligations hereunder in any other currency or if any sums are
received by the Lender hereunder or pursuant hereto in any
other currency than Dollars.
16.2 The Borrower shall also indemnify the Lender on demand against all
costs, expenses, liabilities and losses sustained or incurred as a
result of or in connection with any Environmental Claim being made
against the Lender or arising from any Environmental Incident.
17. FURTHER ASSURANCE
17.1 The Borrower hereby agrees that at any time and from time to time, upon
the written request of the Lender, the Borrower will promptly and duly
execute and deliver and/or procure the execution and delivery of any
and all such further legal documents as may be reasonably required by
the Lender for the purpose of obtaining for the Lender the full
benefits of this Agreement and/or the other Security Documents and of
the rights and powers herein and therein granted.
18. PROVISIONS PROHIBITED BY LAW
18.1 Any provision contained herein and/or in the other Security Documents
prohibited by or unlawful or unenforceable under any applicable law
shall, to the extent required by such law, be ineffective without
modifying the remaining provisions of this Agreement or the other
Security Documents, as the case may be. Where however the provisions of
any such applicable law may be waived, they are hereby waived by the
parties hereto to the full extent permitted by such law with the intent
that this Agreement or the other Security Documents as the case may be,
shall be valid, binding and enforceable in accordance with their
respective terms.
19. RIGHTS OF THE LENDER
19.1 Except as otherwise provided, time is of the essence in this Agreement
and in the Security Documents.
19.2 The Lender's rights and powers under this Agreement or any of the
Security Documents shall not be waived or construed to be waived
because of:
(A) any failure or delay on the part of the Lender in exercising
the right;
17
(B) any course of dealing between the Lender and Borrower; or
(C) any single or partial exercise of the right;
19.3 The rights and remedies in this Agreement and in the other Security
Documents expressly provided are cumulative and not exclusive of any
rights or remedies which any or all of the parties would otherwise
have.
19.4 This Agreement and the other Security Documents may only be amended by
an agreement in writing by all the parties to the documents in
question.
20. NOTICES
20.1 Any notice, approval, consent, demand, or request to be given or made
pursuant to this Agreement shall be in writing but may be given by
letter or telex or facsimile transmission and shall be sent in the case
of the Lender to its office at East Saxon House, 27 Duke Street,
Chelmsford, Essex, CM1 1HT, England (Attention: Xxxxx Xxxxxx) (Fax:
00000 000 000) with a copy to Director of Legal Services at the above
address (Fax: 00000 000 000) and in the case of the Borrower to the
offices of
Torch Offshore Inc, 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx
00000, Xxxxxxxxx, Xxxxxx Xxxxxx of America (Attention: Xxxxxx Xxxxxx)
(Fax: + 000 000 0000).
20.2 Either the Lender or the Borrower may change the details contained in
Clause 20.1 by giving fourteen days (14) notice to the other.
20.3 Any such notice, approval, demand or request shall be deemed to have
been received in the case of a telex or facsimile transmissions at the
time of despatch if sent on a Business day during the usual working
hours in the country of receipt and in the case of a letter (whether
served personally or by post) when actually delivered.
20.4 All certificates, instruments and other documents to be delivered under
or supplied in connection with this Agreement or any of the Security
Documents shall be in the English language or shall be accompanied by a
certified English translation upon which the Lender shall be entitled
to rely.
21. GOVERNING LAW
21.1 This Agreement shall be governed by and construed in accordance with
English Law.
22. JURISDICTION
22.1 For the benefit of the Lender, the parties agree that any action
arising out of or in connection with this Agreement or the Security
Documents may be brought in the High Court of Justice in England and
that Court shall have jurisdiction.
18
The Lender and the Borrower irrevocably submit to the jurisdiction of
that Court. Notwithstanding the foregoing, the submissions to such
jurisdiction shall not (and shall not be construed so as to) limit the
rights of the Lender to take proceedings against the Borrower in the
courts of any other competent jurisdiction. The parties further agree
that only the courts of England and Wales and not those of any other
state shall have jurisdiction to determine any claim, which the
Borrower may have against the Lender arising out of or in connection
with this Agreement.
22.2 The Borrower agrees for the benefit of the Lender that any legal action
or proceeding arising out of or in connection with this Agreement or
the Security Documents shall be sufficiently served upon it if sent to
the offices of Xxxxx & Co (marked for the attention of Xxxxx Xxxxxx)
for the time being which at the date of this Agreement are situated at
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX0 0XX whom the Borrower
hereby irrevocably appoints as its agent for the purpose of accepting
service on its behalf.
23. COUNTERPARTS
23.1 This Agreement may be executed in any number of counterparts and all
such counterparts taken together shall be deemed to constitute one and
the same document.
24. UNDERTAKINGS OF THE LENDER
24.1 Without prejudice to the obligation and warranty of the Lender under
and in accordance with the MoA to deliver the Vessel to the Borrower
free of all charters, encumbrances, mortgages and maritime liens or any
other debts or claims whatsoever, which obligation shall be paramount,
if in breach of such warranty there is created or arises or subsists
any Seller's Lien affecting the Vessel or any part thereof the Lender
will forthwith procure the release of that Seller's Lien, or arrange
for the necessary security to be given in respect of the Seller's Lien
in question so that it does not in any way xxxxxx the Vessel or its
operation.
24.2 If the Lender fails within three (3) Business Days after having
received notice from the Borrower to procure the release of any
Seller's Lien (or provide sufficient security to the claimant, so the
Seller's Lien is secure to the claimant's satisfaction) and/or the
Vessel at any time has a writ or libel filed against it or is arrested,
attached, levied upon pursuant to any legal process or is detained in
exercise or purported exercise of any lien or claim or whatsoever
nature, in each such case arising out of the existence of any such
Seller's Lien, the Borrower shall:-
(A) be entitled to act as the agent for the Lender to procure the
release of that Seller's Lien and/or release of the Vessel
from such arrest, detention, attachment or levy or, as the
case may be, the discharge of
19
the writ or libel and the discharge of all liabilities in
connection with such process, claim, lien or other action; and
(B) be entitled to be indemnified by the Lender against all direct
losses (but for the avoidance of doubt not any indirect losses
or consequential losses, including loss of revenue, loss of
bargain and loss of opportunity) and expenses reasonably and
properly so incurred by it.
24.3 Up until such time as the Lender notifies the Borrower of any
assignment of its rights under this Agreement and / or the Security
Documents, the Borrower shall be entitled to set off against the
Outstanding Indebtedness any amount in respect of which the Lender is
obliged to indemnify the Borrower under clause 24.2(B). After such
notification the Borrower shall not be entitled to exercise such right
of set-off and will only be able to rely on the indemnity contained in
Clause 24.2.
IN WITNESS whereof the parties hereto have executed this Agreement the day and
year first before written.
SIGNED by )
for and on behalf of )
TORCH OFFSHORE INC )
in the presence of:- )
SIGNED by )
for and on behalf of )
GLOBAL MARINE SYSTEMS )
LIMITED )
in the presence of:- )
20
APPENDIX "A"
DEED OF ASSIGNMENT OF INSURANCES
21
APPENDIX "B"
MORTGAGE
22
APPENDIX "C"
SCHEDULE OF PAYMENTS OF PRINCIPAL AND INTEREST
"MIDNIGHT WRANGLER"
PAYMENT INTEREST PRINCIPAL OUTSTANDING DEBT
INSTALMENT NO MONTH ($) ($) ($) ($)
------------- ----- ------- -------- --------- ----------------
9,731,417
1 April-03 181,175 56,767 124,408 9,607,009
2 May-03 181,175 56,041 125,134 9,481,874
3 June-03 181,175 55,311 125,864 9,356,010
4 July-03 181,175 54,577 126,598 9,229,412
5 August-03 181,175 53,838 127,337 9,102,075
6 September-03 181,175 53,095 128,080 8,973,996
7 October-03 181,175 52,348 128,827 8,845,169
8 November-03 181,175 51,597 129,578 8,715,591
9 December-03 181,175 50,841 130,334 8,585,257
10 January-04 181,175 50,081 131,094 8,454,163
11 February-04 181,175 49,316 131,859 8,322,304
12 March-04 181,175 48,547 132,628 8,189,675
13 April-04 181,175 47,773 133,402 8,056,273
14 May-04 181,175 46,995 134,180 7,922,093
15 June-04 181,175 46,212 134,963 7,787,131
16 July-04 181,175 45,425 135,750 7,651,380
17 August-04 181,175 44,633 136,542 7,514,839
18 September-04 181,175 43,837 137,338 7,377,500
19 October-04 181,175 43,035 138,140 7,239,360
20 November-04 181,175 42,230 138,945 7,100,415
21 December-04 181,175 41,419 139,756 6,960,659
22 January-05 181,175 40,604 140,571 6,820,088
23 February-05 181,175 39,784 141,391 6,678,697
24 March-05 181,175 38,959 142,216 6,536,481
25 April-05 181,175 38,129 143,046 6,393,435
26 May-05 181,175 37,295 143,880 6,249,555
27 June-05 181,175 36,456 144,719 6,104,836
28 July-05 181,175 35,612 145,563 5,959,273
29 August-05 181,175 34,762 146,413 5,812,860
30 September-05 181,175 33,908 147,267 5,665,594
31 October-05 181,175 33,049 148,126 5,517,468
32 November-05 181,175 32,185 148,990 5,368,478
33 December-05 181,175 31,316 149,859 5,218,619
34 January-06 181,175 30,442 150,733 5,067,886
35 February-06 181,175 29,563 151,612 4,916,274
36 March-06 181,175 28,678 152,497 4,763,777
37 April-06 181,175 27,789 153,386 4,610,391
38 May-06 181,175 26,894 154,281 4,456,110
39 June-06 181,175 25,994 155,181 4,300,929
40 July-06 181,175 25,089 156,086 4,144,842
41 August-06 181,175 24,178 156,997 3,987,846
42 September-06 181,175 23,262 157,913 3,829,933
43 October-06 181,175 22,341 158,834 3,671,099
23
44 November-06 181,175 21,415 159,760 3,511,339
45 December-06 181,175 20,483 160,692 3,350,647
46 January-07 181,175 19,545 161,630 3,189,017
47 February-07 181,175 18,603 162,572 3,026,445
48 March-07 181,175 17,654 163,521 2,862,924
49 April-07 181,175 16,700 164,475 2,698,450
50 May-07 181,175 15,741 165,434 2,533,016
51 June-07 181,175 14,776 166,399 2,366,616
52 July-07 181,175 13,805 167,370 2,199,247
53 August-07 181,175 12,829 168,346 2,030,901
54 September-07 181,175 11,847 169,328 1,861,573
55 October-07 181,175 10,859 170,316 1,691,257
56 November-07 181,175 9,866 171,309 1,519,947
57 December-07 181,175 8,866 172,309 1,347,639
58 January-08 181,175 7,861 173,314 1,174,325
59 February-08 1,181,175 6,850 1,174,325 0
---------- --------- ---------
TOTALS 11,689,325 1,957,907 9,731,417
========== ========= =========
24
