exv10w7






Exhibit 10.7




	 	 	 
	 

	 	NOK 1,005,000,000
	 
	 	 
	 

	 	FACILITY AGREEMENT
	 
	 	 
	 

	 	DEEP OCEAN ASA
	 

	 	as Borrower
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	THE BANKS AND FINANCIAL INSTITUTIONS
	 

	 	LISTED IN SCHEDULE 3
	 

	 	as Original Lenders
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	SPAREBANK 1 SR-BANK
	 

	 	as Agent
	 
	 	 
	 

	 	dated 5 June 2007











 









 





INDEX




	 	 	 	 	 	 	 
	CLAUSE	 	SUBJECT	 	PAGE
	1.	 	PURPOSE
	 	 	3	 
	 	 	 
	 	 	 	 
	2.	 	DEFINITIONS
	 	 	3	 
	 	 	 
	 	 	 	 
	3.	 	REPRESENTATIONS AND WARRANTIES
	 	 	16	 
	 	 	 
	 	 	 	 
	4.	 	CONDITIONS PRECEDENT
	 	 	19	 
	 	 	 
	 	 	 	 
	5.	 	THE FACILITIES
	 	 	19	 
	 	 	 
	 	 	 	 
	6.	 	UTILISATION
	 	 	20	 
	 	 	 
	 	 	 	 
	7.	 	GUARANTEES
	 	 	22	 
	 	 	 
	 	 	 	 
	8.	 	CURRENCY
	 	 	23	 
	 	 	 
	 	 	 	 
	9.	 	INTEREST AND GUARANTEE COMMISSION
	 	 	24	 
	 	 	 
	 	 	 	 
	10.	 	REDUCTION AND REPAYMENT
	 	 	25	 
	 	 	 
	 	 	 	 
	11.	 	PREPAYMENT
	 	 	26	 
	 	 	 
	 	 	 	 
	12.	 	PAYMENTS
	 	 	27	 
	 	 	 
	 	 	 	 
	13.	 	SECURITY
	 	 	28	 
	 	 	 
	 	 	 	 
	14.	 	CHANGES IN CIRCUMSTANCES
	 	 	28	 
	 	 	 
	 	 	 	 
	15.	 	UNDERTAKINGS
	 	 	29	 
	 	 	 
	 	 	 	 
	16.	 	EVENTS OF DEFAULT
	 	 	35	 
	 	 	 
	 	 	 	 
	17.	 	INDEMNITIES
	 	 	37	 
	 	 	 
	 	 	 	 
	18.	 	AGENCY
	 	 	38	 
	 	 	 
	 	 	 	 
	19.	 	FEES AND EXPENSES
	 	 	40	 
	 	 	 
	 	 	 	 
	20.	 	MISCELLANEOUS
	 	 	40	 
	 	 	 
	 	 	 	 
	21.	 	TRANSFER
	 	 	41	 
	 	 	 
	 	 	 	 
	22.	 	AMENDMENTS AND WAIVERS
	 	 	42	 
	 	 	 
	 	 	 	 
	23.	 	NOTICES
	 	 	43	 
	 	 	 
	 	 	 	 
	24.	 	LAW AND JURISDICTION
	 	 	43	 






SCHEDULES




	 	 	 
	1.	 	Utilisation Request

	2	 	Interest Period Notice

	3.	 	Lenders and Commitments

	4.	 	Condition Precedent Documents

	5.	 	Compliance Certificates

	6.	 	Transfer Certificate

	7.	 	Calculation of Effective Interest







 









 






THIS FACILITY AGREEMENT dated 5 June 2007 is made between;





	1.	 	DEEP OCEAN ASA, registration no. 980 722 805, of Stoltenberggata 1, NO-5527 Haugesund, Norway
as Borrower;
	 
	2.	 	THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 3 as Original Lenders;
	 
	3.	 	SPAREBANK 1 SR-BANK, registration no. 937 895 321, acting through its offices at Sørhauggaten
150, P. O. Box 453, NO-5501 Haugesund, Norway as Agent.





NOW IT IS HEREBY AGREED AS FOLLOWS:




1. PURPOSE




1.1 Purpose




This Agreement sets out the terms and conditions upon and subject to which the Lenders have agreed
according to their several obligations to make available to the Borrower (i) a multicurrency cash
pool system with a credit allowance of up to NOK 200,000,000, or the equivalent thereof in Optional
Currencies, (ii) a multicurrency credit facility in the amount of up to NOK 230,000,000, or the
equivalent thereof in Optional Currencies, (iii) a guarantee facility in the amount of up to NOK
270,000,000, or the equivalent thereof in Optional Currencies and (iv) term loans in the amount of
NOK 155,000,000 and NOK 150,000,000 respectively, or the equivalent thereof in Optional Currencies,
for general corporate purposes of the Group.



2. DEFINITIONS




2.1 Definitions




In this Agreement, the following words and expressions shall have the meaning set opposite them
below:



	 	 	 
	“Acceptance Date”

	 	means 21 June 2007, being the date of acceptance of the Offer Letter.
	 
	 	 
	“Accounting
Principles”

	 	means Norwegian GAAP, IFRS and all other International Accounting
Standards and Interpretations issued by International Accounting Standards
Board (or any predecessor or successor thereto) in force from time to
time.
	 
	 	 
	“Additional Term
Loan”

	 	means a multicurrency term loan in the amount of NOK 150,000,000, or the
equivalent thereof in Optional Currencies, advanced to the Borrower for
the purpose of part financing the acquisition of CTC Marine Projects.
	 
	 	 
	“Agent”

	 	means Sparebank 1 SR-Bank, registration no. 937 895 321, acting through
its offices at Sørhauggaten 150, P. O. Box 453, NO-5501 Haugesund, Norway
as agent on behalf of the Lenders, and any successor of it appointed
pursuant to clause 18.
	 
	 	 
	“Agreement”

	 	means this facility agreement, as amended at any time.
	 
	 	 
	“Availability
Period”

	 	means the period commencing on the date hereof and expiring on the
respective Maturity Dates of the Facilities.
	 
	 	 
	“Banking Day”

	 	means a day (i) upon which banks and financial institutions are open for
transactions contemplated by this Agreement and additionally in relation
to payments hereunder the place for provision of funds or due payment and
(ii) upon which the Trans-European Automated Real-Time Gross Settlement






 









 







	 	 	 
	 

	 	Express Transfer System (TARGET) or any successor thereto is operating
credits or transfer instructions in respect of payments in EUR.
	 
	 	 
	“Book Assets”

	 	means on consolidated basis the Borrower’s book value of all assets, as
determined by the Accounting Principles.
	 
	 	 
	“Book Equity”

	 	means on consolidated basis the Borrower’s book value of equity, as
determined by the Accounting Principles.
	 
	 	 
	“Book Equity Ratio”

	 	means Book Equity divided by Book Assets.
	 
	 	 
	“Borrower”

	 	means Deep Ocean ASA, registration no. 980 722 805, of Stoltenberggata 1,
NO-5527 Haugesund, Norway.
	 
	 	 
	“Charges over Inventory”

	 	means:


(i)      in respect of the Borrower, a first priority charge over its inventory
dated on or about the date hereof in the amount of NOK 1,750,000,000,
entered into between the Borrower and the Agent and registered with the
Registry of Moveable Property (Løsøreregisteret); and

	 
	 	 
	 

	 	(ii)     in respect of any other Group Company, a first priority charge over
its inventory, entered or to be entered into between such Group Company
and the Agent in agreed form, registered or to be registered with the
Registry of Moveable Property (Løsøreregisteret);
and “Charge over Inventory” means any of them.

	 
	 	 
	“Charges over  Machinery and
Plant”

	 	means:


(i)      in respect of the Borrower, a first priority charge over its machinery
and plant dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between the Borrower and the Agent and
registered with the Registry of Moveable Property (Løsøreregisteret);

	 
	 	 
	 

	 	(ii)      in respect of DO Bergen, a first priority charge over its machinery
and plant dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between DO Bergen and the Agent and registered
with the Registry of Moveable Property (Løsøreregisteret); and

	 
	 	 
	 

	 	(iii)     in respect of any other Group Company, a first priority charge over
its machinery and plant, entered or to be entered into between such Group
Company and the Agent in agreed form, registered or to be registered with
the Registry of Moveable Property (Løsøreregisteret)
 
and “Charge over Machinery and Plant” means any of them.

	 
	 	 
	“Classification
Society”

	 	means Det norske Veritas or such other classification society acceptable
to the Lenders.
	 
	 	 
	“Commitment”

	 	means the sum of NOK 1,005,000,000, and in relation to each Lender the
amount of the Commitment which each Lender agrees to advance to the
Borrower as its several liability as set opposite its name in Schedule 3.






 









 






	 	 	 
	“Compliance
Certificate”

	 	means a document, substantially in the form of Schedule 5 hereto, to be
issued by the Borrower demonstrating compliance with the financial
covenants as described in clause 15.1.14.
	 
	 	 
	“Cash Pool Credit”

	 	means a multicurrency cash pool credit in the amount of NOK 200,000,000
made available to the Borrower through the Cash Pool System.
	 
	 	 
	“Cash Pool System”

	 	means a multicurrency cash pool system in the name of the Borrower with
the Agent, established through the Cash Pool System Agreement.
	 
	 	 
	“Cash Pool System
Agreement”

	 	means a multicurrency cash pool system agreement dated on or about the
date hereof, entered into between (i) the Borrower as borrower, (ii) the
Group Companies (less the Borrower) as co-borrowers and (iii) the Agent as
bank, pursuant to which the cash pool system is established with the Agent
and the Cash Pool Credit is made available to the Borrower.
	 
	 	 
	“Credit Facility”

	 	means a reducing multicurrency credit facility in the amount of up to NOK
230,000,000, or the equivalent thereof in Optional Currencies.
	 
	 	 
	“CTC Marine
Projects”

	 	means CTC Marine Projects Ltd., company no. 02835294, of Coniscliffe
House, Coniscliffe Road, Darlington, County Durham DL3 7EE, UK.
	 
	 	 
	“Currencies”

	 	means NOK and the Optional Currencies, and “Currency” means any of them.
	 
	 	 
	“Current Assets”

	 	means on consolidated basis the Borrower’s current assets, as determined
by the Accounting Principles.
	 
	 	 
	“Current
Liabilities”

	 	means on consolidated basis the Borrower’s current liabilities, as
determined by the Accounting Principles, excluding the next 12 months
instalments on any long-term loans.
	 
	 	 
	“Declarations of
Pledge”

	 	means in respect of DO Bergen, a declaration of pledge dated on or about
the date hereof in respect of the Charge over Machinery and Plant executed
by DO Bergen.
	 
	 	 
	“Deep Endeavour”

	 	means M/V “Deep Endeavour”, IMO no. [ ], registered in the name of the
Borrower in the Ship Registry.
	 
	 	 
	“Deep Ocean de
Mexico”

	 	means Deep Ocean de Mexico S.A., of [ ].
	 
	 	 
	“DeepOcean
Management”

	 	means DeepOcean Management AS, registration no. 987 538 880, of
Stoltenberggata 1, NO-5527 Haugesund, Norway.
	 
	 	 
	“Deep Ocean
Shipping”

	 	means Deep Ocean Shipping AS, registration no. 979 456 107, of
Stoltenberggata 1, NO-5527 Haugesund, Norway.
	 
	 	 
	“Disposal”

	 	means a sale, lease, license, transfer, loan or other disposal by a person
of any material asset, undertaking or business (whether by a voluntary or
involuntary single transaction or series of transactions).
	 
	 	 
	“Disposal Proceeds”

	 	means the consideration receivable by any Group Company (including any
amount receivable in repayment of inter-company debt) for any Disposal 






 









 








	 	 	 
	 

	 	made by any Group Company after
deducting: 
(i)      any reasonable expenses which are incurred by any Group Company with
respect to that Disposal to persons who are not Group Companies; and

	 
	 	 
	 

	 	(ii)     any Taxes incurred and required to be paid by the seller in
connection with that Disposal (as reasonably determined by the seller, on
the basis of existing rates and taking account of any available credit,
deduction or allowance).

	 
	 	 
	“DO Bergen”

	 	means DO Bergen AS, registration no. 948 230 798, of Stoltenberggata 1,
NO-5527 Haugesund, Norway.
	 
	 	 
	“Drawing”

	 	means a part (or, if requested and available, all) of a Facility advanced
by the Lenders to the Borrower in accordance with clause 5.
	 
	 	 
	“Earnings”

	 	means all moneys whatsoever from time to time due or payable to the
Borrower arising out of any use or operation of the Vessels including (but
without limiting the generality of the foregoing) all freight, hire and
passage moneys, income arising under pooling arrangements, compensation
payable to the Borrower in the event of requisition of the Vessels for
hire, remuneration for salvage and towage services, demurrage and
detention moneys and damages for breach (or payments for variation or
termination) of a charterparty or other contract for the employment of the
Vessels.
	 
	 	 
	“EBITDA”

	 	means on consolidated basis the Borrower’s earnings before interest,
taxes, depreciation, amortisation and any gain or loss from sale of assets
or other extraordinary gains or losses.
	 
	 	 
	“Equivalent Amount”

	 	means at any date specified herein the equivalent amount in the relevant
Optional Currency or Optional Currencies of an amount in NOK or vice versa
as converted at the Exchange Rate.
	 
	 	 
	“Exchange Rate”

	 	means the exchange rate between NOK and the relevant Optional Currency to
be ruling in the relevant foreign exchange market at or about 11 a.m.
(London time) on a particular day.
	 
	 	 
	“Excluded Insurance
Proceeds”

	 	means any proceeds of an insurance claim which the Borrower notifies the
Agent are, or are to be, applied:
	 
	 	 
	 

	 	(i)      to meet a third party claim;

	 
	 	 
	 

	 	(ii)    to cover operating losses in respect of which the relevant insurance
claim was made; or

	 
	 	 
	 

	 	(iii)    to the replacement, reinstatement and/or repair of the assets or
otherwise in amelioration of the loss in respect of which the relevant
insurance claim was made, 

	 
	 	 
	 

	 	in each case as soon as possible (but in any event within 90 days, or such
longer period as the Majority Lenders may agree) after receipt.

	 
	 	 
	“Expiry Date”

	 	means, in relation to a Guarantee, the last day of its Term.






 









 








	 	 	 
	“EUR”

	 	means the legal currency of the countries which are members of the
European Monetary Union (EMU).
	 
	 	 
	“EURIBOR”

	 	means Euro Interbank Offered Rate, the rate at which EUR interbank term
deposits within the Euro zone are offered by one prime bank to another
prime bank at 11 a.m. central European time, presently quoted on Telerate
Reuters Screen Page “EURIBOR 01” (or such other Screen Page or service as
may replace Reuters Screen Page “EURIBOR 01”), on the Quotation Date in
respect of each Interest Period or if no such rate is available, the
arithmetic mean of the rate per annum at which the Agent is able to
acquire EUR in the Euro interbank market.
	 
	 	 
	“Event of Default”

	 	means any of the events or circumstances described in clause 16.
	 
	 	 
	“Facilities”

	 	means each of:
	 
	 	 
	 

	 	(i)      the Cash Pool Credit;

	 
	 	 
	 

	 	(ii)     the Credit Facility;

	 
	 	 
	 

	 	(iii)     the Guarantee Facility;

	 
	 	 
	 

	 	(iv)     the Term Loan; and

	 
	 	 
	 

	 	(v)      the Additional Term Loan;
 
and “Facility” means any of them.

	 
	 	 
	“Factoring
Agreements”

	 	means:


(i)      in respect of the Borrower, a first priority factoring agreement dated
on or about the date hereof in the amount of NOK 1,750,000,000, entered
into between the Borrower and the Agent and registered with the Registry
of Moveable Property (Løsøreregisteret);

	 
	 	 
	 

	 	(ii)     in respect of DO Bergen, a first priority factoring agreement dated
on or about the date hereof in the amount of NOK 1,750,000,000, entered
into between DO Bergen and the Agent and registered with the Registry of
Moveable Property (Løsøreregisteret); and

	 
	 	 
	 

	 	(iii)    in respect of any other Group Company, a first factoring agreement,
entered or to be entered into between such Group Company and the Agent in
agreed form, registered or to be registered with the Registry of Moveable
Property (Løsøreregisteret)
and “Factoring Agreement” means any of them.

	 
	 	 
	“Finance Documents”

	 	means this Agreement, the Guarantees, the Cash Pool System Agreement and
the Security Documents.
	 
	 	 
	“Financial
Indebtedness”

	 	means any obligation for payment or repayment of money including leasing
obligations whether as principal or as surety and whether present or
future, actual or contingent and financial obligations related to vessels
chartered in by the Borrower.






 









 







	 	 	 
	“GBP”

	 	means the lawful currency of the United Kingdom.
	 
	 	 
	“Group”

	 	means the Borrower and its subsidiaries.
	 
	 	 
	“Group Companies”

	 	means :
	 
	 	 
	 

	 	(i)      CTC Marine Norway;

	 
	 	 
	 

	 	(ii)     CTC Marine Projects;

	 
	 	 
	 

	 	(iii)     Deep Ocean de Mexico;

	 
	 	 
	 

	 	(iv)     Deep Ocean Management;

	 
	 	 
	 

	 	(v)      Deep Ocean Shipping;

	 
	 	 
	 

	 	(vi)     DO Bergen;

	 
	 	 
	 

	 	(vii)     all other Subsidiaries of the Borrower or a Group Company.

	 
	 	 
	“Guarantee”

	 	means a bank guarantee in a form requested by the Borrower and reasonably
acceptable to the Agent, issued by the Agent in favour of a beneficiary
requested by the Borrower.
	 
	 	 
	“Guarantee
Commission”

	 	means 0.15 per cent per annum.
	 
	 	 
	“Guarantee Facility”

	 	means a guarantee facility in the amount of up to NOK 270,000,000, or the
equivalent thereof in Optional Currencies.
	 
	 	 
	“Insurance Proceeds”

	 	means the proceeds of any insurance claim received by any Group Company
except for Excluded Insurance Proceeds and after deducting any reasonable
expenses in relation to that claim which are incurred by any Group Company
to persons who are not Group Companies.
	 
	 	 
	“Insurances”

	 	means in relation to the Vessels, their Earnings or otherwise in relation
to them all policies and contracts of insurances, including all entries in
protection and indemnity or war risk associations, which are from time to
time taken out or entered into, and (where the context permits) all
benefits thereof, including all claims of money or of any nature and
returns of premium.
	 
	 	 
	“Interest Payment
Date”

	 	means the last Banking Day of each Interest Period.
	 
	 	 
	“Interest Period”

	 	means each period for the calculation of interest as described in clause 9.
	 
	 	 
	“Interest Period
Notice”

	 	means a notice in form and substance of Schedule 2 hereto.
	 
	 	 
	“Investment Plan”

	 	means an investment plan presented by the Borrower to the Agent in May
2007.
	 
	 	 
	“ISM Code”

	 	means the International Safety Management Code for the Safe Operation of
Ships and for Pollution Prevention.






 









 







	 	 	 
	“ISPS Code”

	 	means the International Ship and Port Facility Security (ISPS) Code as
adopted by the International Maritime Organization’s (IMO) Diplomatic
Conference of December 2002.
	 
	 	 
	“Lenders”

	 	means:
	 
	 	 
	 

	 	(i)      any Original Lender; and

	 
	 	 
	 

	 	(ii)    any bank, financial institution, trust, fund or other entity, which
has become a party hereto in accordance with Clause 18.1,



	 
	 	 
	 

	 	which, in each case, has not ceased to be a party hereto in accordance
with the terms of this Agreement.
	 
	 	 
	“Leverage Ratio”

	 	means Net Interest Bearing Debt divided by EBITDA.
	 
	 	 
	“LIBOR”

	 	means for any Interest Period:
	 
	 	 
	 

	 	(iii)    the rate per annum equal to the offered quotation for deposits in
GBP or USD ascertained by the Agent to be the rate established by the
British Bankers’ Association and appearing on the Reuters page LIBOR 01,
published or reported by Reuters through its monitor service or any
equivalent successor to such service at or about 11:00 hours a.m. (London
time) on the applicable Quotation Date; or

	 
	 	 
	 

	 	(iv)    if no such rate is available, the rate per annum at which the Lenders
are able to acquire the relevant currency for the relevant Interest Period
in the London Interbank Euro-currency Market at about 11:00 hours a.m.
(London time) on the applicable Quotation Date, as conclusively certified
by the Agent to the Borrower.

	 
	 	 
	“Majority Lenders”

	 	means Lenders whose aggregate Commitments or participation in the
Facilities (as the case may be depending on whether utilisation has taken
place) exceed 66.67% of the total Commitment under this Agreement.
	 
	 	 
	“Management
Agreement”

	 	means any management agreement entered or to be entered into between the
Manager and the Borrower for the technical and commercial management of
the Vessels.
	 
	 	 
	“Margin”

	 	means 0.75 per cent per annum.
	 
	 	 
	“Market Value”

	 	means the fair market value of a Vessel in NOK, determined annually, as
the arithmetic average of independent valuations of the Vessel obtained
from two independent and well reputed shipbrokers, appointed by the Agent
at the Borrower’s cost. Such valuations to be made with or without
physical inspection of the Vessel (as the Agent may require), on the basis
of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing buyer and seller, on an “as is where
is” basis, free of any existing charter or other contract of employment
and/or pool arrangements.
	 
	 	 
	“Maximum Credit
Facility Amount”

	 	means the amount of the Commitment in respect of the Credit Facility,
subject to any reductions effected in accordance with clause 10.1 and/or
11.2.
	 
	 	 
	“Maturity Date”

	 	means:






 









 






	 	 	 
	 

	 	(i)      in respect of the Cash Pool Credit, the date falling 3 years from the
Acceptance Date;

	 
	 	 
	 

	 	(ii)     in respect of the Credit Facility, the date falling 5 years from the
Acceptance Date;

	 
	 	 
	 

	 	(iii)     in respect of the Guarantee Facility, the date falling 5 years from
the Acceptance Date;

	 
	 	 
	 

	 	(iv)     in respect of the Term Loan, 1 January 2016;

	 
	 	 
	 

	 	(v)      in respect of the Additional Term Loan, 18 January 2012.

	 
	 	 
	“Mortgages”

	 	means:
	 
	 	 
	 

	 	(i)      in respect of Deep Endeavour, a first priority mortgage dated on or
about the date hereof in the amount of NOK 1,750,000,000, and deed of
covenants collateral thereto, over Deep Endeavour by the Borrower in
favour of the Agent and registered in the Ship Registry; and

	 
	 	 
	 

	 	(ii)     in respect of any other Vessels financed under a Facility, a first
priority mortgage in the amount of NOK 1,750,000,000, and deed of
covenants collateral thereto if relevant, over such Vessel executed or to
be executed by the Borrower in favour of the Agent, in agreed form and
registered in the Ship Registry on delivery of the Vessel;
 
and “Mortgage” means any of them.

	 
	 	 
	“Net Interest
Bearing Debt”

	 	means on consolidated basis the Borrower’s aggregate amount of interest
bearing debt, including financial lease obligations, less any unencumbered
cash and bank deposits at the disposal of the Borrower.
	 
	 	 
	“NIBOR”

	 	means the rate offered for comparable deposits in NOK for a period equal
to the Interest Period on the Quotation Date in respect of the relevant
Interest Period, (i) appearing on the Reuters Screen Page NIBP (or such
other Screen Page or service as may replace the Reuters Screen Page NIBP),
or (ii) should it not be possible to determine NIBOR by such method, then
NIBOR shall be the weighted arithmetic mean (rounded to four decimals) of
the rate offered to each Lender for deposits in NOK in the interbank swap
market.
	 
	 	 
	“NOK”

	 	means the lawful currency of Norway.
	 
	 	 
	“Offer Letter”

	 	means a firm offer letter in respect of the Facilities issued on the 21
June 2007 by the Agent and accepted by the Borrower on the same date.
	 
	 	 
	“Optional
Currencies”

	 	means EUR, GBP and USD.
	 
	 	 
	“Original Financial
Statements”

	 	means in relation to the Borrower its consolidated audited financial
statements for the year ended 2006.
	 
	 	 
	“Original Lenders”

	 	means the banks and financial institutions listed in Schedule 3.
	 






 









 








	 	 	 
	“Original NOK
Amount”

	 	means :
	 
	 	 
	 
	 	 
	 

	 	(i)     NOK
200,000,000 in respect of the Cash Pool Credit or such amount
specified in a Utilisation Request in respect of the relevant
Drawings under the Cash Pool Credit;

	 
	 	 
	 

	 	(ii)     NOK 230,000,000 in respect of the Credit Facility, or such amount
specified in a Utilisation Request in respect of the relevant Drawings
under the Credit Facility;

	 
	 	 
	 

	 	(iii)    NOK 270,000,000 in respect of the Guarantee Facility or such amount
specified in a Utilisation Request in respect of the relevant Guarantees
under the Guarantee Facility;

	 
	 	 
	 

	 	(iv)    NOK 155,000,000 in respect of the Term Loan; and

	 
	 	 
	 

	 	(v)     NOK 150,000,000 in respect of the Additional Term Loan.

	 
	 	 
	“Outstanding
Indebtedness”

	 	means the aggregate of all sums of money at any time and from time to time
owing to the Lenders under or pursuant to the Finance Documents.
	 
	 	 
	“Permitted
Disposals”

	 	means any sale, lease, licence, transfer or other disposal which, except
in the case of paragraph (ii), is on arms’ length terms:
	 
	 	 
	 

	 	(i)      of trading stock or cash made by any Group Company in the ordinary
course of trading of the disposing entity;

	 
	 	 
	 

	 	(ii)     of any asset by a Group Company (the “Disposing Company”) to another
Group Company (the “Acquiring Company”), but if the Disposing Company had
created a Security Interest over the asset, the Acquiring Company must
create an equivalent Security Interest over that asset;

	 
	 	 
	 

	 	(iii)    of assets (other than shares and businesses) in exchange for other
assets comparable or superior as to type, value or quality;

	 
	 	 
	 

	 	(iv)    of obsolete or redundant vehicles, plant and equipment; and

	 
	 	 
	 

	 	(v)      arising as a result of any Permitted Security Interest.

	 
	 	 
	“Permitted
Financial
Indebtedness”

	 	means Financial Indebtedness:


(i)     arising under this Agreement;



(ii)     arising under any contract of employment for a vessel chartered in
with a duration of less than three (3) years, or under any performance
guarantee issued by the Borrower as security for the obligations of any
Group Company under any contract of employment for a vessel chartered in
with a duration of less than three (3) years;

	 
	 	 
	 

	 	(iii)    arising under any Swap Agreement on non-speculative basis;

	 
	 	 
	 

	 	(iv)    arising under any agreement entered into by a Subsidiary of the
Borrower provided that:

	 
	 	 
	 

	 	(a) no Event of Default or Potential Event of Default is continuing or






 









 








	 	 	 
	 

	 	would result from incurring such Financial Indebtedness; and

	 
	 	 
	 

	 	  (b) the Agent is notified in writing of such Financial Indebtedness in advance;

	 
	 	 
	 

	 	(v) arising under any agreement entered into by the Borrower provided that:

	 
	 	 
	 

	 	 (a) such Financial Indebtedness is the result of liability arising under
any parent guarantees provided by the Borrower on behalf of any
Subsidiaries, provided that (i) the sole activity of such Subsidiary is to
provide services within the Group’s core area of business as a subsea
service provider and (ii) such Financial Indebtedness relates solely to
such Subsidiary’s activity within the Group’s core area of business as a
subsea service provider; or

	 
	 	 
	 

	 	 (b) the total amount of chartered vessels does not exceed 20 and any new
charterparty liability does not increase the average duration and total
economic charterparty liability by more than 5% compared to average
duration and total economic charterparty liability as per 31 December
2008;

	 
	 	 
	 

	 	 (c) no Event of Default or Potential Event of Default is continuing or
would result from incurring such Financial Indebtedness; and

	 
	 	 
	 

	 	 (d) the Agent is notified in writing of such Financial Indebtedness in
advance.

	 
	 	 
	“Permitted Security
Interest”

	 	means:


(i)      any Security Interest created pursuant to the Security Documents;

	 
	 	 
	 

	 	(ii)     any netting or set-off arrangement entered into by any Group Company
in the ordinary course of its banking arrangements for the purpose of
netting debit and credit balances; and

	 
	 	 
	 

	 	(iii)    any lien arising by operation of law and in the ordinary course of
trading and not as a result of any default or omission of any Group
Company.

	 
	 	 
	“Permitted
Transaction”

	 	means:


(i)      any disposal required, Financial Indebtedness incurred, guarantee,
indemnity or Security Interest created, or other transaction arising under
the Finance Documents;

	 
	 	 
	 

	 	(ii)     the solvent liquidation or reorganisation of any Group Company (other
than an Obligor), so long as any payments or assets distributed as a
result of such liquidation or reorganisation are distributed to another
Group Company;

	 
	 	 
	 

	 	(iii)    transactions (other than (i) any sale, licence, transfer or other
disposal, and (ii) the granting or creation of any Security Interest or
the incurring or permitting to subsist of Financial Indebtedness)
conducted in the ordinary course of trading on arm’s length terms.







 











 







	 	 	 
	“Pledges of Shares”

	 	means:
	 
	 	 
	 

	 	(i)   a first priority pledge of the Borrower’s shares in CTC Marine
Projects dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between the Borrower and the Agent;

	 
	 	 
	 

	 	(ii)  a first priority pledge of the Borrower’s shares in Deep Ocean de
Mexico dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between the Borrower and the Agent;

	 
	 	 
	 

	 	(iii) a first priority pledge of the Borrower’s shares in DeepOcean
Management dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between the Borrower and the Agent;

	 
	 	 
	 

	 	(iv) a first priority pledge of the Borrower’s shares in Deep Ocean
Shipping dated on or about the date hereof in the amount of NOK
1,750,000,000, entered into between the Borrower and the Agent;

	 
	 	 
	 

	 	(v)  a first priority pledge of the Borrower’s shares in DO Bergen dated
on or about the date hereof in the amount of NOK 1,750,000,000, entered
into between the Borrower and the Agent; and

	 
	 	 
	 

	 	(vi) first priority pledges of the Borrower’s shares in any other Group
Company, entered or to be entered into between the Borrower and the Agent
in agreed form;

	 
	 	 
	 

	 	and “Pledge of Shares” means any of them.
	 
	 	 
	“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.
	 
	 	 
	“Proportionate
Share”

	 	means at any time the portion which a Lender’s Commitment (whether
advanced or not) bears to the aggregate Commitment of all the Lenders
(whether advanced or not).
	 
	 	 
	“Quotation Date”

	 	means in relation to an Interest Period:
	 
	 	 
	 

	 	(i)   the day which is two Banking Days prior to the first day of such
Interest Period, or, if different, the day on which quotations would
ordinarily be given in the Norwegian, European or London interbank market
(as relevant) for deposits in a Currency for delivery on the first day of
that period, or

	 
	 	 
	 

	 	(ii)   if on that date the relevant banks and financial institutions are
not open for international business, the next preceding day on which
banks in the interbank market, or such other place for provision of funds
hereunder, are open for international business.

	 
	 	 
	“Renewal Request”

	 	means a written notice delivered to the Agent in accordance with clause
6.5.5 (Renewal of a Guarantee).
	 
	 	 
	“Repayment Date”

	 	means a date on which a repayment instalment is required to be made
pursuant to clause 10.






 









 








	 	 	 
	“Security Documents”

	 	means the security documents set out in clause 13 and any other document
that may have been or shall from time to time hereafter be executed as
security for the Borrower’s obligations under or pursuant to this
Agreement.
	 
	 	 
	“Security Interest”

	 	means any mortgage, pledge, lien, charge, assignment by way of security,
finance lease, sale-and-repurchase or sale- and-leaseback arrangement,
sale of receivables on a recourse basis or security interest or any other
agreement or arrangement having the effect of conferring security, except
for liens arising solely by operation of law and/or in the ordinary
course of business.
	 
	 	 
	“Security Period”

	 	means the period commencing on the date of this Agreement and ending on
the day the Outstanding Indebtedness has been paid in full to the
Lenders.
	 
	 	 
	“Ship Registry”

	 	means the Ship Registry of the Isle of Man, or such other ship registry
as the Lenders may approve.
	 
	 	 
	“Subsidiary”

	 	means in relation to a company (the “Parent Company”) any company or
corporation:
	 
	 	 
	 

	 	(i)   of which more than one half of the issued share capital is
beneficially owned, directly or indirectly, by the Parent Company; or

	 
	 	 
	 

	 	(ii)  which is controlled, directly or indirectly, by the Parent Company;
or

	 
	 	 
	 

	 	(iii)  which is a Subsidiary of another Subsidiary of the Parent Company,
and for these purposes, a company or corporation shall be treated as
being controlled by the Parent Company if the Parent Company is able to
direct its affairs and/or to control the composition of its board of
directors or equivalent body.

	 
	 	 
	“Swap Agreement”

	 	means any master agreement, ISDA or otherwise, and any swap transaction
made pursuant to such master agreement, entered or to be entered into
between the Borrower and the Swap Bank.
	 
	 	 
	“Swap Bank”

	 	means the Agent in its capacity as swap arranger.
	 
	 	 
	“Taxes”

	 	means any taxes, levies, duties, charges, fees deductions and
withholdings levied or imposed by any governmental or other taxing
authority whatsoever.
	 
	 	 
	“Term”

	 	means each period determined under this Agreement for which the Agent is
under a liability under a Guarantee.
	 
	 	 
	“Term Loan”

	 	means a multicurrency term loan in the amount of NOK 155,000,000, or the
equivalent thereof in Optional Currencies, advanced to the Borrower for
the purpose of part financing the Deep Endeavour.
	 
	 	 
	“Total Loss”

	 	means:
	 
	 	 
	 

	 	(i)   an actual, constructive, compromised or agreed total loss of a
Vessel; or

	 
	 	 
	 

	 	(ii)   any expropriation, confiscation, requisition or acquisition of a
Vessel, whether for full consideration, a consideration less than its
proper







 









 








	 	 	 
	 

	 	value, a nominal consideration or without any consideration, which
is effected by any government or official authority or by any person or
persons claiming to be or to represent a government of official
authority, excluding a requisition for hire for a fixed period against
payment of market hire, not exceeding one year without any right to
extension; or

	 
	 	 
	 

	 	(iii)   any condemnation of a Vessel by any tribunal or by any person or
persons claiming to be a tribunal.

	 
	 	 
	“Total Loss Date”

	 	means:
	 
	 	 
	 

	 	(i)   in the case of an actual loss of a Vessel, the date on which it
occurred or, if that is unknown, the date when the Vessel was last heard
of;

	 
	 	 
	 

	 	(ii)  in the case of a constructive, compromised, agreed or arranged total
loss of a Vessel, the earliest of: (i) the date on which a notice of
abandonment is given to the insurers and (ii) the date any compromise,
arrangement or agreement is made with the Vessel’s insurers in which the
insurers agree to treat the Vessel as a total loss; and

	 
	 	 
	 

	 	(iii)  in the case of any other type of total loss, on the date (or the
most likely date) on which it appears to the Agent that the event
constituting the total loss occurred.

	 
	 	 
	“Transaction
Documents”

	 	means the Investment Plan.
	 
	 	 
	“USD”

	 	means the lawful currency of the United States of America.
	 
	 	 
	“Utilisation”

	 	means a Drawing or a Guarantee.
	 
	 	 
	“Utilisation Date”

	 	means, in respect of any Utilisation, the date, being a Banking Day,
specified in a Utilisation Request on which the Borrower has requested
the relevant Drawing to be disbursed or the relevant Guarantee to be
issued.
	 
	 	 
	“Utilisation
Request”

	 	means a notice substantially in the relevant form set out in Schedule 1.
	 
	 	 
	“Vessels”

	 	means Deep Endeavour and any other vessels owned by the Borrower and
financed, in full or in part, under the Facilities.
	 
	 	 
	“Working Capital
Ratio”

	 	means Current Assets divided by Current Liabilities.






2.2 Clause headings




Clause headings and table of contents are inserted for convenience of reference only and shall be
ignored in the interpretation of this Agreement.



2.3 References




In this Agreement, unless the context otherwise requires:




	(i)	 	references to clauses are to be construed as references to clauses of this Agreement;




 









 






	(ii)	 	references to (or to any specified provision of) this Agreement or any other document shall
be construed as references to (or to that specified provision of) this Agreement or that
document as from time to time amended, varied or supplemented;
	 
	(iii)	 	words importing the plural shall include the singular and vice versa;
	 
	(iv)	 	references to a Borrower providing “cash cover” for a Guarantee or the Guarantee Facility
means the Borrower paying an amount in the currency of the Guarantee to an interest-bearing
account in the name of the Borrower and the following conditions being met:






	 	(a)	 	the account is with the Agent (if the cash cover is to be provided for all
the Lenders) or with a Lender (if the cash cover is to be provided for that Lender);
	 
	 	(b)	 	until no amount is or may be outstanding under the Guarantee, withdrawals
from the account may only be made to pay the Agent amounts due and payable to it
under this Agreement in respect of the Guarantee; and
	 
	 	(c)	 	the Borrower has executed a security document over that account, in form
and substance satisfactory to the Agent or the Lender with which that account is
held, creating a first ranking security interest over that account; and






	(v)	 	references to a Borrower “repaying” or “prepaying” the Guarantee Facility means:






	 	(a)	 	that Borrower providing cash cover for the Guarantee;
	 
	 	(b)	 	the maximum amount payable under the Guarantee being reduced or cancelled
in accordance with its terms; or
	 
	 	(c)	 	the Agent being satisfied that it has no further liability under the
Guarantee,






	 	 	and the amount by which the Guarantee is repaid or prepaid under paragraphs (vi) (a) and
(vi) (b) above is the amount of the relevant cash cover or reduction.





3. REPRESENTATIONS AND WARRANTIES




The Borrower represents and warrants to the Agent and the Lenders that:



3.1 Corporate Status




It is a limited liability company duly incorporated, validly existing and registered under the laws
of Norway.



3.2 Corporate power




It has full power and authority to execute each of the Finance Documents, to comply with the
provisions thereof and to perform its obligations thereunder and all necessary corporate,
shareholder and other action has been taken by it to approve and authorize the execution of the
Finance Documents, the compliance with the provisions thereof and the performance of its
obligations thereunder.



3.3 No conflict




The execution of the Finance Documents and the compliance with the provisions thereof and the
performance of its obligations thereunder do not and will not;




	(i)	 	contravene or violate any provision of any applicable law, statute, rule or regulation in
force at the date of this Agreement or any order, judgment, decree or permit to which it is
subject (including the Council Directive 2001/97/EC of the European Parliament and of the
Council of




 









 






		 	4 December 2001 amending Council Directive 91/308/EEC of the Council of the
European Community implemented to combat “money laundering”); or
	 
	(ii)	 	conflict with, or result in any breach of the terms of, or constitute a default under any
agreement or other instrument to which it is a party or by which it is bound; or
	 
	(iii)	 	contravene or conflict with any of its constitutional or corporate documents.





3.4 No litigation




No action, suit, or proceeding, litigation or dispute is taking place, pending, or, to its
knowledge, threatened against it which could have a material adverse effect on its business, assets
or financial condition or the business, assets or financial condition of any Group Company.



3.5 Legal validity and enforceability




Each of the Finance Documents and the Transaction Documents will when executed by the respective
parties thereto constitute legal, valid and binding obligations of the respective party,
enforceable in accordance with its terms, and save as provided for herein or therein, including
nominal fees relating to registration and enforcement of any of the Security Documents, subject
always to mandatory Norwegian law and any other applicable laws respectively, and except for the
registration of the Mortgages with the Ship Registry and for the registration of the Factoring
Agreement, the Charges over Inventory and the Charges over Machinery and Plant with Register of
Movable Property, no registration, filing, payment of tax or fees or other formalities are
necessary or desirable to render any of the Finance Documents valid and enforceable against the
parties thereto, and for the Security Documents to constitute valid and enforceable Security
Interest with the priority as contemplated therein or herein.



3.6 Authorisation




All consents, licenses, approvals and authorisations required in connection with;





	(i)	 	the execution, validity or enforceability of the Finance Documents;
	 
	(ii)	 	the compliance with the provisions hereof and thereof;
	 
	(iii)	 	the performance of the obligations hereunder and thereunder; and
	 
	(iv)	 	the transactions contemplated hereby and thereby,





have been obtained or effected and are in full force and effect and there are no circumstances
which indicate that any of the same are likely to be revoked in whole or in part.



3.7 Information




All financial and other information furnished by it to the Agent in connection with the negotiation
and preparation of the Finance Documents was to its best knowledge, true and accurate when given
and there were and are no other facts or matters the omission of which would have made or make any
such information false or misleading in any material respect.



3.8 Financial Indebtedness




Neither it, nor of any Group Company, is in breach of or in default under any agreement or other
instrument relating to Financial Indebtedness to which it is a party or by which it is bound (nor
would it be with the giving of notice or lapse of time or both).



3.9 No default





	(i)	 	No Event of Default or Potential Event of Default has occurred and is continuing;




 









 






	(ii)	 	No other event has occurred which (with the giving of notice, lapse of time, determination of
materiality or the fulfilment of any other applicable condition, or any combination of the
foregoing), might constitute an event of default under any document which is binding on the
Borrower or any of its assets, and which may result in a material adverse effect on its
business or condition or a material adverse effect on its ability to perform its obligations
under the Finance Documents (as the case may be); and
	 
	(iii)	 	No material amendments or waivers have been made under any of the Transaction Documents, and
no event of default has occurred or is threatening thereunder.





3.10 No security




None of its assets or the assets of any Group Company of are affected by any Security Interest,
save as previously disclosed to the Agent, and neither it, nor of any Group Company, is a party to,
nor is it or any Group Company or any of their assets bound by any order, agreement or instrument
under which they are, or in certain events may be, required to create, assume or permit to arise
any Security Interest, save for the Security Interest created under the Security Documents and any
other Security Interest previously disclosed to the Agent.



3.11 Winding up




No corporate action, legal proceeding or other procedure or step described in clause 16.1.5 is
currently pending or, to its knowledge, threatened in relation to it or any Group Company, and none
of the circumstances described in clause 16.1.5 applies to it or any Group Company.



3.12 No immunity




Neither it, nor any Group Company, nor any of their assets, are entitled to immunity from suit,
execution, attachment or other legal process, and its entry into of the Finance Documents
constitutes, and the exercise of its rights and performance of and compliance with its obligations
under Finance Documents will constitute, private and commercial acts done and performed for private
and commercial purposes.



3.13 Material adverse change




No material adverse change has occurred in its or any Group Company’s business, assets, operation
or financial condition.



3.14 Pari passu ranking




Its payment obligations under the Finance Documents rank at least pari passu with the claims of all
its other unsecured and unsubordinated creditors, except for obligations mandatory preferred by law
applying to companies generally.



3.15 No deduction of tax




It is not required under the law of its jurisdiction of incorporation to make any deduction for or
on account of Taxes from any payment it may make under any Finance Document.



3.16 Taxation





	(i)	 	Neither, it nor any Group Company, is materially overdue in the filing of any Tax returns.
	 
	(ii)	 	No claims or investigations are being, or are reasonably likely to be, made or conducted
against it or any Group Company with respect to Taxes.
	 
	(iii)	 	It is resident for Tax purposes only in the jurisdiction of its incorporation.





3.17 Original Financial Statements





	(i)	 	Its Original Financial Statements were prepared in accordance with the Accounting Principles
consistently applied, unless expressly disclosed to the Agent in writing to the contrary.




 









 







	(ii)	 	Its un-audited Original Financial Statements fairly represent its financial condition and
results of operations, unless expressly disclosed to the Agent in writing to the contrary.
	 
	(iii)	 	There has been no material adverse change in its assets, business or financial condition
since the date of the Original Financial Statements, other than those which the Lenders have
been informed of.
	 
	(iv)	 	Its most recent financial statements delivered pursuant to clause 15.1.4:






	 	a.	 	have been prepared in accordance with the Accounting Principles as
applied to the Original Financial Statements; and
	 
	 	b.	 	give a true and fair view of (if audited) or fairly represent (if
un-audited) its consolidated (if appropriate) financial condition as at the end of,
and results of operations, consolidated (if appropriate), for, the period to which
they relate.






	(v)	 	Since the date the most recent financial statements delivered pursuant to Clause 15.1.4 there
has been no material adverse change in its business, assets, operation or financial condition.





3.18 Repetition of representations and warranties




The representations and warranties set out in clause 3 shall be deemed to be repeated on each
Utilisation Date and on each Interest Payment Date until the Outstanding Indebtedness has been paid
in full, with respect to the facts and circumstances existing at each Interest Payment Date, as if
made at each Interest Payment Date, unless otherwise notified to the Agent in writing, and if not
permitted under this Agreement waived by the Agent prior to such date.



4. CONDITIONS PRECEDENT




4.1 General




The several obligations of the Lenders to make their respective Commitment available hereunder (or
any part thereof) is subject to the condition that no Event of Default or Potential Event of
Default has occurred and that the Agent has received all documents and evidence set out in Schedule
4 which shall be approved and satisfactory to the Agent and the Lenders.



5. THE FACILITIES




5.1 Facilities




The Lenders, relying upon the representations and warranties in clause 3 and upon satisfaction of
the conditions set out in clause 4, agree to make available the Facilities on a several basis with
the respective percentages of the Commitment as listed in Schedule 3 hereto.



5.2 Obligations of the Lenders




The obligations of the Lenders under this Agreement are several, and neither the Agent nor any
Lender shall be responsible for the obligations of any other Lender under this Agreement and the
failure of any Lender to perform such obligations shall not relieve the other Lenders of any of
their respective obligations or liabilities under this Agreement.



5.3 Notification to the Lenders of receipt of the Utilisation Request




Upon receipt of the Utilisation Request, the Agent shall promptly notify each Lender thereof and of
the Utilisation Date whereupon each Lender shall on the Utilisation Date make available its
Commitment to the Agent by remitting the same to the account notified by the Agent.



 









 





5.4 Cancellation of commitment




Any part of a Facility which is not utilised within the relevant Availability Period may be
cancelled by the Lenders.



6. UTILISATION




6.1 Utilisation of the Cash Pool Credit




6.1.1 Disbursement of Drawings




Subject to the terms and conditions of this Agreement and to the Cash Pool System Agreement and to
clause 6.1.2 (Purpose, and use of proceeds), the Cash Pool Credit will be disbursed by the Agent to
the Borrower in multiple Drawings as set out in the Cash Pool System Agreement.



6.1.2 Purpose, and use of proceeds




The purpose of the Cash Pool Credit is (i) to replace existing cash pool credit provided by the
Agent to the Borrower and (ii) to provide additional credit related to the Group’s ordinary course
of business.



6.2 Utilisation of the Credit Facility




6.2.1 Disbursement of Drawings




Subject to the terms and conditions of this Agreement, to clause 6.2.2 (Purpose, and use of
proceeds) and to the Lenders’ unconditional approval, the Credit Facility will be disbursed by the
Agent to the Borrower in several Drawings each in an amount of minimum NOK 25,000,000, or the
equivalent thereof in Optional Currencies, in accordance with the particulars contained in
Utilisations Notices following receipt by the Agent of such Utilisation Requests duly signed by the
Borrower no later than 12:00 noon (Norwegian time) on the third (3) Banking Day before the relevant
Utilisation Date.



6.2.2 Purpose, and use of proceeds




The Credit Facility shall be utilised to part finance investments in accordance with the Investment
Plan.



6.3 Utilisation of the Term Loan




The Term Loan was disbursed by the Agent to the Borrower on the 1 December 2006.



6.4 Utilisation of the Additional Term Loan




The Additional Term Loan was disbursed by the Agent to the Borrower on the 18 December 2006.



6.5 Utilisation of the Guarantee Facility




6.5.1 Purpose of the Guarantee Facility




The purpose of the Guarantee Facility is (i) to replace existing guarantee facilities provided by
the Agent to the Borrower and (ii) to provide additional guarantees related to the Borrower’s
ordinary course of business, and may be utilised only by way of Guarantees.



6.5.2 Delivery of a Utilisation Request for a Guarantee




The Borrower may request a Guarantee to be issued by delivery to the Agent of a duly completed
Utilisation Request no later than 12:00 noon (Norwegian time) on the third (3) Banking Day before
the relevant Utilisation Date.



6.5.3 Completion of a Utilisation Request for a Guarantee




Each Utilisation Request for a Guarantee is irrevocable and will not be regarded as having been
duly completed unless:



 









 






	(i)	 	the proposed Utilisation Date is a Banking Day within the Availability Period applicable to
the Guarantee Facility;
	 
	(ii)	 	the Expiry Date of the Guarantee falls on or before the Maturity Date in relation to the
Guarantee Facility;
	 
	(iii)	 	the delivery instructions for the Guarantee are specified;
	 
	(iv)	 	the identity of the beneficiary of the Guarantee is a counterparty under a contract entered
into by a Group Company, and the issuance of a Guarantee is a requirement under such contract;
	 
	(v)	 	the amount of the proposed Guarantee must be in an amount which is not more than the
Guarantee Facility; and
	 
	(vi)	 	the currency of the Guarantee is a Currency.





6.5.4 Issue of a Guarantee





	(i)	 	If the conditions set out in this Agreement have been met, the Agent shall issue the
Guarantee on the Utilisation Date, relying upon the representations and warranties in clause 3
and subject to satisfaction of the conditions set out in clause 4.
	 
	(ii)	 	Subject to clause 3 (Conditions Precedent), the Agent will only be obliged to comply with
paragraph (i) if on the date of the Utilisation Request or Renewal Request and on the proposed
Utilisation Date:






	 	a.	 	no Event of Default or Potential Event of Default is continuing or would
result from the proposed Utilisation; and
	 
	 	b.	 	all the representations and warranties in Clause 4 (Representations and
warranties) are true.





6.5.5 Renewal of a Guarantee





	(i)	 	The Borrower may request that any Guarantee issued on behalf of it be renewed by delivery to
the Agent of a Renewal Request in substantially similar form to a Utilisation Request for a
Guarantee no later than 12:00 noon (Norwegian time) on the third (3) Banking Day before the
Expiry Date of the Guarantee.
	 
	(ii)	 	The Issuing Bank shall treat any Renewal Request in the same way as a Utilisation Request for
a Guarantee.
	 
	(iii)	 	The terms of each renewed Guarantee shall be the same as those of the relevant Guarantee
immediately prior to its renewal, except that:






	 	a.	 	its amount may be less than the amount of the Guarantee immediately prior
to its renewal; and
	 
	 	b.	 	its Term shall start on the date which was the Expiry Date of the Guarantee
immediately prior to its renewal, and shall end on the proposed Expiry Date specified
in the Renewal Request.






	(iv)	 	If the conditions set out in this Agreement have been met, the Agent shall amend and re-issue
any Guarantee pursuant to a Renewal Request.




 









 












7. GUARANTEES




7.1 Immediately payable




If a Guarantee or any amount outstanding under a Guarantee is expressed to be immediately payable,
the Borrower shall repay or prepay that amount immediately.



7.2 Claims under a Guarantee





	(i)	 	The Borrower irrevocably and unconditionally authorises the Agent to pay any claim made or
purported to be made under a Guarantee and which appears on its face to be in order (in this
clause 7, a “claim”).
	 
	(ii)	 	The Borrower shall immediately on demand pay to the Agent an amount equal to the amount of
any claim.
	 
	(iii)	 	The Borrower acknowledges that the Agent:






	 	a.	 	is not obliged to carry out any investigation or seek any confirmation from
any other person before paying a claim; and
	 
	 	b.	 	deals in documents only and will not be concerned with the legality of a
claim or any underlying transaction or any available set-off, counterclaim or other
defence of any person.






	(iv)	 	The obligations of the Borrower under this clause will not be affected by:






	 	a.	 	the sufficiency, accuracy or genuineness of any claim or any other
document; or
	 
	 	b.	 	any incapacity of, or limitation on the powers of, any person signing a
claim or other document.





7.3 Indemnities





	(i)	 	The Borrower shall immediately on demand indemnify the Agent against any cost, loss or
liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or
wilful misconduct) in acting as the issuing bank under any Guarantee requested by the
Borrower.
	 
	(ii)	 	Each Lender shall (according to its Proportionate Share of the relevant Guarantee)
immediately on demand indemnify the Agent against any cost, loss or liability incurred by the
Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) in
acting as the issuing bank under any Guarantee (unless the Agent has been reimbursed by the
Borrower pursuant to a Finance Document).
	 
	(iii)	 	If any Lender is not permitted (by its constitutional documents or any applicable law) to
comply with paragraph (ii) above, then that Lender will not be obliged to comply with
paragraph (ii) and shall instead be deemed to have taken, on the date the Guarantee is issued
(or if later, on the date the Lender’s participation in the Guarantee is transferred or
assigned to the Lender in accordance with the terms of this Agreement), an undivided interest
and participation in the Guarantee in an amount equal to its Proportionate Share of that
Guarantee. On receipt of demand from the Agent, that Lender shall pay to the Agent (for the
account of the Agent) an amount equal to its Proportionate Share of the amount demanded.
	 
	(iv)	 	The Borrower shall immediately on demand reimburse any Lender for any payment it makes to the
Agent under this clause 7.3 in respect of that Guarantee.




 









 






	(v)	 	The obligations of each Lender under this clause are continuing obligations and will extend
to the ultimate balance of sums payable by that Lender in respect of any Guarantee, regardless
of any intermediate payment or discharge in whole or in part.
	 
	(vi)	 	The obligations of any Lender or the Borrower under this clause will not be affected by any
act, omission, matter or thing which, but for this clause, would reduce, release or prejudice
any of its obligations under this clause (without limitation and whether or not known to it or
any other person) including:






	 	a.	 	any time, waiver or consent granted to, or composition with, the Borrower,
any beneficiary under a Guarantee or any other person;
	 
	 	b.	 	the release of the Borrower or any other person under the terms of any
composition or arrangement with any creditor or any Group Company;
	 
	 	c.	 	the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or security
over assets of, the Borrower, any beneficiary under a Guarantee or other person or
any non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any security;
	 
	 	d.	 	any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of the Borrower, any beneficiary under
a Guarantee or any other person;
	 
	 	e.	 	any amendment (however fundamental) or replacement of a Finance Document,
any Guarantee or any other document or security;
	 
	 	f.	 	any unenforceability, illegality or invalidity of any obligation of any
person under any Finance Document, any Guarantee or any other document or security;
or
	 
	 	g.	 	any insolvency or similar proceedings.





7.4 Revaluation of Guarantees





	(i)	 	If required by the currency composition of the Group’s cash flow, the Borrower may request
that one or more of the Guarantees are denominated in an Optional Currency. If any Guarantees
are denominated in an Optional Currency, the Agent shall at six monthly intervals after the
date of the Guarantee recalculate the Original NOK Amount of each Guarantee by notionally
converting into NOK the outstanding amount of that Guarantee on the basis of the Exchange Rate
on the date of calculation.
	 
	(ii)	 	The Borrower shall, if requested by the Agent within fifteen (15) days of any calculation
under paragraph (i) above, within three (3) Banking Days provide cash cover sufficient to
cover any outstanding Guarantees, or parts thereof, to prevent the Original NOK Amount of the
Utilisations under the Guarantee Facility exceeding the aggregate Guarantee Facility
Commitments following any adjustment to the Original NOK Amount under paragraph (i) of this
clause 7.4.





7.5 Rights of contribution




The Borrower will not be entitled to any right of contribution or indemnity from any of the Agent
or the Lenders in respect of any payment it may make under this clause 7.



8. CURRENCY




 









 








8.1 Request for an Optional Currency




If required by the currency composition of the Group’s cash flow, the Borrower may, by giving
written notice to the Agent not less than three (3) Banking Days before any Utilisation Date or
Interest Payment Date, request that a Facility or a part thereof is made available in NOK and/or
one or more of the Optional Currencies.



8.2 Non-availability




If the requested Optional Currency is not (as determined by the Agent) readily available in respect
of the amount and/or the Interest Period chosen by the Borrower, the Agent shall promptly inform
the Borrower of such non availability, and the Facility, or the relevant part thereof, shall be
disbursed in NOK or continue to be denominated in NOK.



8.3 Disagio




Whenever a Facility, or a part thereof, is denominated in an Optional Currency, the Equivalent
Amount of such Facility, or the relevant part thereof, shall be determined on each Repayment Date
and the Facility shall be adjusted as follows;




	(i)	 	if on any Repayment Date, or when reasonably requested by the Agent, the Equivalent Amount of
the Facility, or a part thereof, nominated in an Optional Currency exceeds 105% of the
Original NOK Amount of such Facility, or a part thereof, reduced by any prepayments and/or
repayments and/or reductions made prior to or to be made on such date, the Borrower shall on
such Repayment Date pay any total excess amount in the relevant Optional Currency to the
Agent, said payment to be made on demand by the Agent;
	 
	(ii)	 	if on any Repayment Date the Equivalent Amount of the Facility, or a part thereof, nominated
in an Optional Currency is less than the Original NOK Amount of the Facility reduced by any
repayments and/or prepayments and/or reductions made prior to or to be made on such date, the
difference between the Original NOK Amount and the Equivalent Amount of the Facility shall not
be applied to reduce forthcoming repayment instalments falling due and shall not be advanced
to the Borrower by the Agent, provided however, that if there is any difference when the last
repayment instalment is due such difference shall be applied against payment of such repayment
instalment and/or the balloon payment.





8.4 Interest Payment – Optional Currency




Whenever a Facility, or a part thereof, is denominated in an Optional Currency, interest shall be
paid in that Optional Currency.



9. INTEREST AND GUARANTEE COMMISSION




9.1 Interest Period




Each Interest Period shall have a duration of one (1), three (3), six (6) or twelve (12) months, or
such other duration as mutually agreed between the Borrower and the Lenders at least three (3)
Banking Days prior to the commencement thereof. The Borrower may not choose more than three (3) one
(1) month’s Interest Periods in any twelve months cycle.



9.2 First Interest Period




The first Interest Period of a Drawing shall be selected in the Utilisation Request and shall
commence on the Utilisation Date of such Drawing and each subsequent Interest Period shall commence
at last day of the immediately preceding Interest Period.



The first Interest Period of each subsequent Drawing (other than the first Drawing) under the
Credit Facility shall be selected in the Utilisation Request, shall commence on the Utilisation
Date of such Drawing and shall have such duration as to expire on the last day of the current
Interest Period of the



 









 





first Drawing under the Credit Facility. From then on the Drawings shall be
consolidated and treated as one Drawing.



9.3 Interest Period Notice




The Borrower shall serve the Interest Period Notice to the Agent not later than 12:00 noon
(Norwegian time) three (3) Banking Days prior to the beginning of each Interest Period specifying
the duration of the next Interest Period.



9.4 No selection of Interest Period




If the Borrower fails to specify the duration of an Interest Period, such Interest Period shall
have duration of six (6) months.



9.5 Separate Interest Period




If any Interest Period would overrun the due date of payment of the next repayment instalment,
there shall be a separate Interest Period in respect of that repayment instalment expiring on the
due date for payment of such repayment instalment and the interest rate relating to that repayment
instalment shall be separately fixed.



9.6 Semi-annual payment of interest




If the Borrower chooses and the Lenders agree to an Interest Period which exceeds six (6) months,
the Borrower shall pay accrued interest every six (6) months on the relevant Interest Payment Date.



9.7 Payment of interest




As from the Utilisation Date of a Drawing, such Drawing shall carry interest at (i) NIBOR in
respect of amounts in NOK, LIBOR in respect of amounts in GBP and USD and EURIBOR in respect of
amounts in EUR plus (ii) the Margin for each Interest Period, and the Borrower shall pay such
interest on each Interest Payment Date, and in relation to any amount prepaid, on the date of such
prepayment as set out in clause 11.



9.8 Payment of Guarantee Commission




As from the Utilisation Date of a Guarantee, the Borrower shall pay Guarantee Commission on the
amount of the Guarantee every 30 March, 30 June, 31 September and 31 December, calculated for the
actual number of days elapsed and payable quarterly in arrears first time on the first such date as
above mentioned falling after the relevant Utilisation Date.



9.9 Calculation of interest




The interest shall be calculated on the actual number of days elapsed on the basis of a (i) 360 day
year in respect of amounts in NOK, USD and EUR and (ii) 365 day year in respect of amounts in GBP.
Effective interest rate pursuant to the Norwegian Financial Agreement Act 1999 has been calculated
by the Agent as set out in Schedule 7 hereto.



9.10 Default interest




In the event of any payment hereunder not being received on the due date therefore, interest is
payable by the Borrower from the due date until that payment is received, at a rate to be
determined by the Agent to be the aggregate sum of a default funding charge of three (3) per cent
per annum, the Margin and the costs the Lenders will incur in financing the Facilities for such
periods as the Lenders shall determine, such interest being payable by the Borrower upon the
Agent’s written demand.



10. REDUCTION AND REPAYMENT




10.1 Scheduled reductions of the Credit Facility




The Maximum Credit Loan Amount shall be reduced by ten (10) consecutive semi annual reductions, the
first nine (9) in the amount of NOK 10,000,000 and final in the amount of NOK 140,000,000.



 









 





The first such scheduled reduction to become effective on the 1 December 2007. The scheduled
reductions shall be effective regardless of any Drawing having been made.



If, as a result of a scheduled reduction under this clause 10.1 becoming effective, the amount of
principal outstanding under the Credit Facility exceeds the Maximum Credit Facility Amount, any
such amount in excess of the Maximum Credit Facility Amount shall be repaid by the Borrower on the
date of the relevant scheduled reduction. Furthermore, if for any reason whatsoever any amount of
principal outstanding under the Credit Facility exceeds the Maximum Credit Facility Amount, the
Borrower shall repay such amount in excess of the Maximum Credit Facility Amount promptly upon
becoming aware thereof or being notified thereof by the Agent.



Any Outstanding Indebtedness under the Credit Facility is due and payable on the Maturity Date of
the Credit Facility.



10.2 Repayment of the Term Loan




The Borrower shall repay the Term Loan by sixteen (16) consecutive semi annual repayment
instalments each in the amount of NOK 5,166,677. An additional balloon payment of NOK 72,333,328
and the Outstanding Indebtedness under the Term Loan is due and payable together with the last
repayment instalment of the Term Loan on the Maturity Date of the Term Loan.



The first repayment instalment was paid on the 1 June 2007.



10.3 Repayment of the Additional Term Loan




The Borrower shall repay the Additional Term Loan by ten (10) consecutive semi annual repayment
instalments each in the amount of NOK 15,000,000. The Outstanding Indebtedness under the Additional
Term Loan is due and payable together with the last repayment instalment of the Additional Term
Loan on the Maturity Date of the Additional Term Loan.



The first repayment instalment was paid on the 18 June 2007.



11. PREPAYMENT




11.1 Voluntary prepayment




The Borrower shall be entitled to prepay a Facility, in whole or in multiples of NOK 10,000,000, by
giving to the Agent (unless otherwise approved by the Lenders) not less than five (5) Banking Days
written irrevocable notice of such prepayment at any time, and without penalty if made on an
Interest Payment Date.



11.2 Voluntary cancellation




The Borrower may upon five (5) days prior written notice to the Agent cancel the Maximum Credit
Facility Amount in whole or in multiples of NOK 10,000,000, at any time and without penalty if made
on an Interest Payment Date.



11.3 Mandatory prepayment





	(i)	 	In the event that a Vessel shall suffer a Total Loss, the Borrower shall immediately upon
receipt of the insurance proceeds, and latest within 90 days, utilize the insurance proceeds
towards prepaying the Outstanding Indebtedness under the Facility used to part finance such
Vessel.
	 
	(ii)	 	In the event that the Borrower sells the Vessel, the Borrower shall utilize the sales
proceeds towards prepaying the Outstanding Indebtedness under the Facility used to part
finance such Vessel upon the date of completion of such sale.




 









 






	(iii)	 	The Borrower shall prepay the Facilities in the following amounts promptly upon receipt by
it and in the order contemplated by clause 11.4 (Application of partial prepayment):






	 	a.	 	the amount of Disposal Proceeds; and
	 
	 	b.	 	the amount of Insurance Proceeds.





11.4 Application of partial prepayment




Any amount prepaid pursuant to clause 11.1 shall be applied against the Facility expressed by the
Borrower to be prepaid in inverse order of maturity (balloon payments included),.



Any amounts prepaid pursuant to clause 11.3 shall be applied pro rata towards prepayment of the
Facilities, in inverse order of maturity (balloon payments included).



Any prepaid amount may not be drawn again.



12. PAYMENTS




12.1 Method of payments




All payments to be made by the Borrower under the Finance Documents shall be made in full for
account of the Agent and shall be made without any set-off or counterclaim and free and clear of
any Taxes whatsoever in a Currency on the date on which the relevant payment is due in funds with
same day value.



12.2 Place and account of payment




All payments made by the Borrower hereunder shall be remitted to the Agent’s account with such bank
as the Agent shall nominate from time to time.



12.3 Payment on non-Banking Day




When any payment under any of the Finance Documents would otherwise be due on a day which is not a
Banking Day, the due date for payment shall be extended to the next following Banking Day unless
such Banking Day falls in the next calendar month in which case such payment shall be made on the
immediately preceding Banking Day.



12.4 Grossing up




If at any time any applicable law, regulation or regulatory requirement requires the Borrower to
make any deduction or withholding in respect of Taxes from any payment due under or pursuant to any
of the Finance Documents, 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 Taxes, the Lenders
receive on the due date for such payment a net sum equal to the sum which the Lenders would have
received had no such Taxes been required to be made and the Borrower shall indemnify the Lenders
and the Agent against any losses or costs incurred by them by reason of any failure of the Borrower
to make any such deduction or withholding or by reason of any increased payment not being made on
the due date for such payment.



12.5 Lenders’ right to set-off




Following the occurrence of an Event of Default, the Agent and each of the Lenders individually
shall, to the extent permitted by relevant law or otherwise, have a separate right of set-off in
respect of any credit balance, in any currency, on any account the Borrower might have with the
Agent and each of the Lenders individually (branches included) against any sum due to the Agent and
the Lenders hereunder, provided however, that any amount recovered will be applied in accordance
with clause 18.8 of this Agreement.



 









 





13. SECURITY




13.1 Securities




The Outstanding Indebtedness under the Facilities shall throughout the Security Period be secured
by:




	(i)	 	the Mortgages;
	 
	(ii)	 	the Charges over Inventory;
	 
	(iii)	 	the Charges of Machinery and Plant;
	 
	(iv)	 	the Factoring Agreements;
	 
	(v)	 	the Pledges of Shares;
	 
	(vi)	 	the Declaration of Pledge.





13.2 Swap Agreements




Any Outstanding Indebtedness under any Swap Agreement shall throughout the Security Period be
secured by the Security Documents on subordinated basis.



13.3 Further security




The Borrower shall, to the extent permitted under relevant mandatory law, provide such security as
in the opinion of the Agent is reasonable over all assets acquired and financed, in whole or in
part, by way of a utilisation under this Agreement, including but not limited to first priority
mortgages and/or charges over any vessels or other equipment bought and first priority pledges over
the shares in any companies acquired.



14. CHANGES IN CIRCUMSTANCES




14.1 Illegality




If any change in, or introduction of, any law, regulation or regulatory requirement or any change
in the interpretation or application thereof renders it unlawful or contrary to any such law,
regulation or regulatory requirement of any Lender to advance, maintain or fund its Commitment,
such Lender (not being the Agent) shall promptly inform the Agent thereof, whereupon the Agent
shall promptly give notice thereof to the Borrower, whereupon such Lender’s obligations under this
Agreement shall forthwith terminate and (if an advance has been advanced) the Borrower shall prepay
such Lender’s contribution within expiry of the current Interest Period unless such payment
extension is in breach with law or regulatory requirement, together with accrued interest thereon
to the date of prepayment and all other sums payable by the Borrower to such Lender under this
Agreement. Under such circumstances,
the Borrower, the Agent and such Lender shall negotiate in good faith with a view to agreeing a
change of terms on a mutually acceptable and legally valid basis.



14.2 Increased cost





	(a)	 	If by reason of (a) changes in any existing law, rule or regulation, or (b) the adoption of
any new law, rule or regulation, or (c) any change in the interpretation or administration of
(a) or (b) above by any governmental authority, or (d) compliance with any directive or
request (including Basel rules) from any governmental authority (whether or not having the
force of law);






	 	(i)	 	a Lender incurs a cost as a result of it having entered into this Agreement
and/or performing the obligations hereunder; or
	 
	 	(ii)	 	there is an increase in the cost to a Lender of maintaining or funding its
portion of a Facility; or




 









 






	 	(iii)	 	a Lender becomes liable for any new taxes (other than on net income)
calculated by reference to a Facility;






	 	 	the Lender shall give the Agent notice which in turn shall give the Borrower notice within
a reasonable time of the Lender’s intention to claim compensation under this clause 14.2
and the Lender shall specify the form and amount of such compensation. Such Lender’s
determination of the amount of compensation to be made under this clause 14.2 shall,
absent manifest error, be conclusive. The Borrower shall be entitled to prepay the
Facilities, or a portion thereof, in accordance with clause 11.1 at any time following
receipt of notice from such Lender as aforesaid on giving not less than fifteen (15)
Banking Days’ irrevocable written notice. In such event the Borrower shall nevertheless
compensate such Lender for such requested indemnification for the period up to and
including the date of prepayment.
	 
	(b)	 	If any Lender is required to comply with any capital allocation requirements which would
result in any increased costs for such Lender pursuant to clause (a) above, then any such cost
or liability shall be payable by the Borrower to such Lender.





14.3 Market disruption




If the Lenders, by reason of circumstances affecting the European, London and/or Norwegian
interbank markets are unable to obtain the Currencies and accordingly are not able to continue the
Facilities or a portion thereof, the Agent shall give notice of such determination to the Borrower
and until such notice is withdrawn the obligations of the Lenders to advance or continue the
Facilities shall be suspended. The Lenders shall use all reasonable endeavour to fund the
Facilities from such other sources as may be available to them, and in such event the rate of
interest payable on such amount shall be the aggregate of the Margin and such rate as the Lenders
may from time to time certify as being the cost to them to fund the Facilities.



14.4 Force majeure




The Lenders and the Agent shall not be liable for any failure to perform the whole or any part of
this Agreement resulting directly or indirectly from action or inaction or purported action of any
government or governmental or local authority, or any strike, lockout, boycott and blockade
effected by or upon the Lenders or their employees.



15. UNDERTAKINGS




15.1 Positive Undertakings




The Borrower undertakes with the Agent and the Lenders that from the date of this Agreement and so
long as any moneys and other obligations are owing under any of the Finance Documents, it shall:



15.1.1 Notification of default




Promptly inform the Agent of any occurrence of which it becomes aware which might adversely affect
its ability to perform its obligations under any of the Finance Documents and, without limiting the
generality of the foregoing, will inform the Agent of any Event of Default or Potential Event of
Default and the steps, if any, being taking to remedy it, forthwith upon becoming aware thereof and
any dispute (including alleged off-hire) or non payment of hire.



15.1.2 Authorisation




Promptly:




	(i)	 	obtain, comply with and do all that is necessary to maintain in full force and effect; and
	 
	(ii)	 	supply certified copies to the Agent of,




 









 












any authorisation required under any law or regulation of its jurisdiction of incorporation to
enable it to perform its obligations under the Finance Documents, to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance
Document and to conduct its business, trade and ordinary business.



15.1.3 Financial statement




Submit to the Agent as soon as they are available;




	(i)	 	within 120 days after the close of each financial year, two (2) copies of its consolidated
annual audited financial statements, prepared in accordance with the Accounting Principles;
	 
	(ii)	 	within the end of each financial year, its yearly cash flow projections, for the next year,
specifying major assumptions;
	 
	(iii)	 	within 60 days from the end of quarter, its consolidated un-audited quarterly financial
statements including profit and loss statements and balance sheet, prepared in accordance with
the Accounting Principles;
	 
	(iv)	 	such financial and other information as the Agent may reasonably require; and
	 
	(v)	 	a Compliance Certificate in terms and form of Schedule 5 confirming compliance with the
covenants set out in clause 15.1.14, upon the presentation of its quarterly financial
statements.





15.1.4 Insurance





	(i)	 	Insure and procure to keep the Vessels insured satisfactory to the Lenders under the
Norwegian Marine Insurance Plan or equivalent conditions to be approved by the Lenders, such
approval not to be unreasonably withheld, at its expense against;






	 	(a)	 	Hull & Machinery (at least 80% of Market value of the Vessels), plus
Freight Interest and Hull Interest and any other usual marine risks,
	 
	 	(b)	 	War risks,
	 
	 	(c)	 	Loss of Hire,
	 
	 	(d)	 	full protection and indemnity cover with an association approved by the
Lenders and to strictly comply with all P&I-rules in the from time to time latest
version of the association,
	 
	 	(e)	 	such other insurances as the Lenders may reasonably require,






	(ii)	 	procure that the insurances described in (i) (a) and (b) above in respect of a Vessel shall
each be for at least 120% of the Facility, or relevant part thereof, under which such Vessel
is financed or for an amount equal to the Market Value of such Vessel (whichever is the
higher);
	 
	(iii)	 	pay for (i) Mortgagee’s Interest Insurance (MII) taken out by the Agent in respect of a
Vessel amounting to 110% of the Facility, or part thereof, under which such Vessel is financed
and (ii) Mortgagee’s Additional Perils Insurance (MAPI) in respect of such Vessel, if so
requested by any of the Lenders;
	 
	(iv)	 	procure that the Agent is noted as first priority mortgagee in the insurance contracts,
together with the confirmation from the underwriters to the Agent thereof that the Notices of
Assignment of Insurances and the loss payable clause are noted in the insurance contracts and
that standard letters of undertaking, are executed by the insurers/insurance brokers;





 









 







	(v)	 	not later than five (5) days prior to the expiry date of the relevant Insurances, deliver to
the Agent copies of all cover notes, policies and certificates of entry from the insurance
broker(s) through whom the Insurances have been placed, evidencing that all Insurances
referred to under (i) above, have been renewed and taken out with insurance values as required
under (ii) above, that such Insurances are in full force and effect and that the Agent’s
interest therein (as first loss payees) have been noted by the insurers;
	 
	(vi)	 	not employ the Vessels or cause the Vessels to be employed otherwise than in conformity with
the terms of the instruments of insurance aforesaid (including any warranties expressed or
implied therein) without first obtaining the consent to such employment of the insurers and
complying with such requirements as to extra premium or otherwise as the insurers may
prescribe;
	 
	(vii)	 	procure that the insurers of the Vessels do not cancel any of the Insurances for reason of
non payment of premiums for other vessels covered under a fleet policy together with the
Vessels and procure that the insurers shall undertake to issue a separate policy in respect of
the Vessels if and when so requested by the Agent;
	 
	(viii)	 	not make any change to the insurances as described under (i) above, without the prior
written consent of the Lenders; and
	 
	(ix)	 	shall provide the Agent with an insurance opinion at any time if so requested by the Agent.





15.1.5 Class, flag and management





	(i)	 	Procure that the Vessels remain classed with the Classification Society free of all overdue
recommendations or requirements which are affecting the Vessels’ class and promptly perform
all requirements or recommendations of the Classification Society which would result in the
withdrawal of class if not performed;
	 
	(ii)	 	Keep the Vessels registered in the Ship Registry;
	 
	(iii)	 	Keep the Vessels managed by the Manager.





15.1.6 Damage to a Vessel




Promptly notify the Agent in writing (in case of urgency by fax) of;




	(i)	 	any accident to a Vessel involving repairs where the cost is likely to exceed 5% of the
insurance value of the Vessel;
	 
	(ii)	 	any occurrence or event in consequence whereof a Vessel has become or is likely to become a
Total Loss; and
	 
	(iii)	 	an arrest of a Vessel or the exercise or purported exercise of any lien on a Vessel.





15.1.7 Laws and regulations




At all times ensure compliance with all international conventions and regulations applicable to the
Vessels, any other vessels chartered and the Group’s business, including SOLAS conventions and
environmental laws. Consequently it shall ensure compliance with the ISM Code and the ISPS Code and
shall ascertain that the Manager and any other company performing management services on its
behalf, complies with said conventions and regulations.



15.1.8 Accounts




Keep all its and the Group’s accounts with the Agent, and procure that the Earnings are paid to
such accounts with the Agent or such other account nominated by the Agent.



 









 





15.1.9 Information – miscellaneous




Supply to the Agent promptly upon becoming aware of the them, relevant details of any litigation,
arbitration or administrative proceedings which are current or, to its knowledge, threatened or
pending against it or any Group Company and which might, if adversely determined, be reasonably
expected to have a material adverse effect on its ability to perform its material obligations under
the Finance Documents, and further details of any such matters previously disclosed to the Agent,
if the likelihood of an adverse determination has increased, as the Agent may reasonably request.



15.1.10 Tax filing and payment of Taxes




File or cause to be filed all tax returns required to be filed in all jurisdictions in which it and
any Group Company is situated or carries on business or is otherwise subject to taxation and pay
all taxes shown to be due and payable on such returns or any assessment made against it and any
Group Company (other than those being contested in good faith where such payment may be lawfully
withheld) and adequate reserves have been made for such payments should it be found to be payable.



15.1.11 Business of the Borrower




Maintain its and the Group’s business as carried out at the date hereof and not undertake any other
business, and any business undertaken with an affiliate company or between Group Companies shall be
made on arm’s length basis.



15.1.12 Fair Market Value, inspection and inspection reports





	(i)	 	Undertakes to let the Agent on behalf of the Lenders arrange for the Market Value of the
Vessels to be determined semi-annually at the Borrower’s cost, and otherwise at the cost of,
and when requested by, the Lenders;
	 
	(ii)	 	Procure that the Agent’s surveyor at the Borrower’s cost, is permitted to inspect the
condition of the Vessels twice a year provided always that such arrangement shall not
interfere with the operation of the Vessels and subject to satisfactory indemnities approved
by the P&I insurers; and
	 
	(iii)	 	If such reports are made or issued, promptly supply the Agent with any inspection reports
made or issued in respect of the Vessels.





15.1.13 Repairs, alterations etc.




It shall procure that the Vessels are not brought to any yard for repairs where the costs of such
repairs might exceed USD 250,000, or permit any major change or structural alteration to be made to
the Vessels without the prior written consent of the Agent, such consent not to be unreasonably
withheld. The Borrower shall not, and shall procure that any charterers shall not, remove any
material equipment unless replaced immediately with equivalent equipment.



15.1.14 Financial covenants




Maintain, on a 12 month rolling, consolidated basis;




	(i)	 	A Book Equity Ratio that is higher than 35%;
	 
	(ii)	 	A Leverage Ratio that is lower than 4:1 until 31 December 2008 and lower than 3:1 thereafter;
and
	 
	(iii)	 	A Working Capital Ratio that is higher than 1.1.





15.1.15 Further assurance





	(i)	 	Promptly do (or cause to be done) all such acts or execute (or cause to be executed) all such
documents (including assignments, transfers, mortgages, charges, notices and instructions) as




 









 






	 	 	the Agent may reasonably specify (and in such form as the Agent may reasonably require in
favour of the Agent or its nominee(s)):






	 	a.	 	to perfect the Security Interest created or intended to be created under or
evidenced by the Security Documents (which may include the executing of a mortgage,
charge, assignment or other Security Interest over all or any of the assets which
are, or are intended to be, the subject of the Security Interest created by the
Security Documents), or for the exercise of any rights, powers and remedies of the
Agent or the Lenders provided by or pursuant to the Finance Documents or by law;
and/or
	 
	 	b.	 	to facilitate the realisation of the assets which are, or are intended to
be, the subject of the Security Interest created under the Security Documents.






	(ii)	 	Take all such action as is available to it (including making all filings and registrations)
as may be necessary for the purpose of the creation, perfection, protection or maintenance of
any Security Interest conferred or intended to be conferred on the Agent and/or the Lenders by
or pursuant to the Finance Documents.





15.1.16 Syndications




Provide (and procure that each Group Company provides) reasonable assistance to the Agent and the
Lenders in the syndication of the Facilities (including, without limitation, by making management
personnel available for the purpose of making presentations to, or meeting, potential lending
institutions) and will comply with all reasonable requests for information presented by the Agent
from potential syndicate members prior to completion of syndication.



15.1.17 “Know your customer” checks




Supply, or procure the supply of, any and all such documentation and other evidence as is
reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself
or, in the case of the event of syndication, on behalf of any prospective new Lender) pursuant to
any “know your customer” or similar identification procedures imposed by any law or regulation in
place at any time in circumstances where the necessary information is not already available to it,
in order for the Agent, such Lender or, in the case of the event of syndication, any prospective
new Lender to carry out and be satisfied with the results of all necessary “know your customer” or
other checks in relation to any relevant person pursuant to the transactions contemplated in the
Finance Documents.



15.2 Negative undertakings




The Borrower further undertakes that without the prior written consent of the Lenders, such consent
not to be unreasonably withheld, it shall:



15.2.1 Merger




Not enter into any amalgamation, demerger, merger or corporate reconstruction, nor any acquisition
of any other company or other corporate entity, other than a Permitted Transaction.



15.2.2 Acquisitions and/or capital expenditure




Not make or enter into any acquisitions and/or capital expenditure and/or any new investments,
including the acquisition of a company or any shares or securities in a company a business or
undertaking, or incorporation of a company, which, in the opinion of the Lenders would materially
change its position as a subsea service company.



15.2.3 Negative pledge





	(i)	 	Not create or permit to subsist any Security Interest over any of its assets.
	 
	(ii)	 	Not;




 









 












	 	(a)	 	sell, transfer or otherwise dispose of any of its assets on terms whereby
they are or may be leased to or re-acquired by another Group Company;
	 
	 	(b)	 	sell, transfer or otherwise dispose of any of its receivables on recourse
terms;
	 
	 	(c)	 	enter into any arrangement under which money or the benefit of a bank or
other account may be applied, set-off or made subject to a combination of accounts;
or
	 
	 	(d)	 	enter into any other preferential arrangement having a similar effect,






	 	 	in circumstances where the arrangement or transaction is entered into primarily as a
method of raising Financial Indebtedness or of financing the acquisition of an asset.
	 
	(iii)	 	Paragraphs (i) and (ii) above do not apply to any Permitted Security Interest.





15.2.4 Disposals





	(i)	 	Not enter into a single transaction or a series of transactions (whether related or not) and
whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of a material
asset.
	 
	(ii)	 	Not sell, transfer or otherwise dispose of a Vessel unless the Facility, or relevant part
thereof, under which such Vessel is financed, is repaid as set out in clause 11.2 (ii); and
	 
	(iii)	 	Paragraph (i) above does not apply to any sale, lease, transfer or other disposal which is:






	 	(a)	 	a Permitted Disposal; or
	 
	 	(b)	 	a Permitted Transaction.





15.2.5 Dividends




Not pay any dividends, nor distribute any of its present or future assets, rights or revenues nor
make any financial distribution or loans to its shareholders or any third parties in excess of 50%
of its annual result for the previous financial year, as determined by the Accounting Principles.



15.2.6 Amendments to the Transaction Documents




Not amend, vary, novate, supplement, supersede, waive or terminate any material term of a
Transaction Document or any other document delivered to the Agent pursuant to clause 4, which would
adversely affect the rights of the Lenders under the Finance Documents.



15.2.7 Employment




Not enter into any charterparty or other contract for the employment of the Vessels, including any
pool participation agreement.



15.2.8 Financial Indebtedness




Not, and shall procure that no Group Company shall not, obtain any new loans, nor incur or allow to
remain outstanding (or provide guarantees for) any Financial Indebtedness nor issue any guarantees,
undertake any other financial commitments or obligations including any financial derivatives and
the chartering of vessels, other than Permitted Financial Indebtedness.



15.2.9 Terms related to other Financial Indebtedness




Not enter into, and procure that no Group Company enters into, any agreement for any kind of
Financial Indebtedness which contain terms that are, in the opinion of the Lenders, more stringent
than the terms provided in this Agreement.



 









 





15.2.10 Changes




Not change:




	(i)	 	the end of its fiscal year;
	 
	(ii)	 	its nature of business;
	 
	(iii)	 	its legal name;
	 
	(iv)	 	its type of organization; or
	 
	(v)	 	its jurisdiction.





16. EVENTS OF DEFAULT




16.1 Event of Default




There shall be an Event of Default if;



16.1.1 No payment




Any sum payable under or pursuant to any of the Finance Documents is not paid when due or if due to
administrative error is not paid within three (3) Banking Days.



16.1.2 Misrepresentation




Any representation, warranty or statement made or deemed to be made by the Borrower or a Group
Company in any of the Finance Documents or any other document delivered by or on behalf of the
Borrower or a Group Company under or in connection with any of the Finance Documents is or proves
to have been incorrect or misleading in any material respect when made or deemed to be made.



16.1.3 Breach of obligation




The Borrower or a Group Company commits any breach of or omits to observe any of its obligations or
undertakings under or pursuant to any of the Finance Documents (other than the sub-clauses of this
clause 16) and such breach (if remediable in the sole discretion of the Lenders) has not been
remedied within fifteen (15) days except for breaches of clauses 15.1.4 and 15.1.5 which shall be
remedied immediately.



16.1.4 Cross default





	(i)	 	Any Financial Indebtedness of the Borrower or a Group Company is not paid when due nor within
any originally applicable grace period;
	 
	(ii)	 	Any Financial Indebtedness of the Borrower or a Group Company is declared to be or otherwise
becomes due and payable prior to its specified maturity as a result of an event of default
(however described);
	 
	(iii)	 	Any commitment for any Financial Indebtedness of the Borrower or a Group Company is
cancelled or suspended by a creditor of such company as a result of an event of default
(however described);
	 
	(iv)	 	Any creditor of the Borrower or a Group Company becomes entitled to declare any Financial
Indebtedness of such company due and payable prior to its specified maturity as a result of an
event of default (however described).




 









 











16.1.5 Insolvency





	(i)	 	The Borrower or a Group Company is unable or admits inability to pay its debts as they fall
due, suspends making payments on any of its debts or, by reason of actual or anticipated
financial difficulties, commences negotiations with one or more of its creditors with a view
to rescheduling any of its indebtedness.
	 
	(ii)	 	A moratorium is declared in respect of any indebtedness of the Borrower or a Group Company.
	 
	(iii)	 	The Borrower or a Group Company proposes or enters into a composition or other arrangement
for the benefit of its creditors generally or is found bankrupt or insolvent, or any order is
made by any competent court or resolution passed by the Borrower or a Group Company for its
winding up or dissolution.





16.1.6 Unlawful





	(i)	 	It is or becomes unlawful for the Borrower or a Group Company to perform any of its
respective obligations contained under the Finance Documents, or any Security Interest created
or expressed to be created or evidenced by the Security Documents ceases to be effective;
	 
	(ii)	 	Any obligation of the Borrower or a Group Company under any Finance Document are not or cease
to be legal, valid, binding or enforceable and the cessation individually or cumulatively
materially and adversely affects the interests of the Lenders under the Finance Documents;
	 
	(iii)	 	Any Finance Document ceases to be in full force and effect or any Security Document ceases
to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other
than the Agent or a Lender) to be ineffective.





16.1.7 Material adverse change




There occurs in the reasonable opinion of the Lenders a material adverse change in the financial
condition of the Borrower or a Group Company which is likely to have an effect on the ability of
the Borrower or such Group Company to perform its respective obligations under any of the Finance
Documents.



16.1.8 Permits




Any of the consents, licenses, approvals or authorizations referred to in clause 3.6 is modified in
a manner unacceptable to the Lenders or is not granted or is revoked or terminated or expires and
is not renewed or otherwise ceases to be in full force and effect.



16.1.9 Liens




A maritime or other lien, arrest, distress or similar charge is levied upon, or against a Vessel,
or any other part of the assets of the Borrower and is not discharged within 15 days after the
Borrower became aware of the same.



16.1.10 Transaction Documents




Any of the Transaction Documents are waived, cancelled, terminated or materially amended without
the prior written consent of the Lenders.



16.2 Acceleration




The Agent may, and shall upon instruction from the Majority Lenders, at any time after the
occurrence of an Event of Default, which remains un-remedied and un-waived, take all or any of the
following actions;




	(i)	 	by notice to the Borrower declare the Facilities or any amount outstanding forthwith due and
payable and/or Commitment cancelled, whereupon the obligation of the Lenders to make the
Facilities available shall cease and, if any part of the Facilities has been disbursed, the




 









 






	 	 	Borrower shall immediately repay the Facilities together with interest accrued, default
interest and all other money payable to the Lenders,
	 
	(ii)	 	with or without notice to the Borrower the Agent shall become forthwith entitled to enforce
the securities created by the Security Documents.





17. INDEMNITIES




17.1 Indemnities




The Borrower hereby undertakes and agrees to indemnify the Agent and the Lenders on demand, without
prejudice to any of the Agent’s or the Lenders’ rights under any of the Finance Documents against
any loss (including loss of Margin limited to the current Interest Period) or expense which the
Agent or the Lenders shall certify as sustained or incurred by them as a direct consequence of;




	(i)	 	any default in payment by the Borrower of any sum under or pursuant to any of the Finance
Documents when due;
	 
	(ii)	 	the occurrence of an Event of Default;
	 
	(iii)	 	any repayment or prepayment of the Facilities or part thereof being made otherwise than on
the date of expiry of an Interest Period or Repayment Date (as the case may be) relative to
the amount of the Facilities repaid or prepaid or any other breaking of an Interest Period;
	 
	(iv)	 	the Facilities (or any part thereof) not being advanced for any reason (excluding any reason
attributable to the Agent or to any of the Lenders) after a Drawdown Notice has been given.





including, in any such case, but not limited to any loss or expense sustained or incurred in
maintaining or funding the Facilities or any part thereof or in liquidating or re-employing
deposits from third parties required to effect or maintain the Facilities or any part thereof.



17.2 Indemnity to the Agent




The Borrower shall promptly indemnify the Agent against any loss, liability or out-of-pocket
expense or external fees incurred by it (acting reasonably) as a result of:




	(i)	 	investigating any event which it reasonably believes is an Event of Default;
	 
	(ii)	 	acting or relying on any notice, request or instruction which it reasonably believes to be
genuine, correct and appropriately authorised;
	 
	(iii)	 	the taking, holding, protection or enforcement of the Security Documents;
	 
	(iv)	 	the exercise of any of the rights, powers, discretions and remedies vested in the Agent by
the Finance Documents; and any default by the Borrower in the performance of any of the
obligations expressed to be assumed by it in the Finance Documents.





17.3 Currency indemnity





	(i)	 	If any sum due from the Borrower under the Finance Documents (a “Sum”) or any order, judgment
or award given or made in relation to a Sum has to be converted from the currency (the “First
Currency”) in which the Sum is payable into another currency (the “Second Currency”) for the
purpose of;






	 	(a)	 	making or filing a claim or proof against the Borrower;




 









 






	 	(b)	 	obtaining or enforcing an order or judgement or award in relation to any
litigation or arbitration proceeds,






	 	 	the Borrower shall as an independent obligation within five (5) Banking Days of demand,
indemnify the Lenders and the Agent to whom that Sum is due against any cost, loss or
liability arising out of or as a result of the conversion including any discrepancy
between (A) the rate of exchange used to convert that Sum from the First Currency into the
Second Currency and (B) the rate or rates of exchange available to the Lenders at the time
of their receipt of that Sum.
	 
	(ii)	 	The Borrower waives any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currencies unit other than that in which it is expressed to
be payable.





18. AGENCY




18.1 Appointment and duties of the Agent




Each Lender authorises the Agent to take such action on its behalf and to exercise such powers as
are specifically delegated to it by the terms of this Agreement together with all such powers as
are reasonably incidental thereto. In performing its duties and functions hereunder, the Agent
shall exercise the same care as it normally exercises in making and handling loans for its own
account. The Agent shall act in accordance with instructions from the Lenders if legal proceedings
are to be commenced against the Borrower. Any reference to the Agent in this Agreement and the
Security Documents shall be understood as Agent on behalf of the Lenders unless otherwise
specifically stated.



18.2 Relationship




The relationship between the Agent and the Lenders is that of agent and principal only, and nothing
herein shall be construed so as to constitute the Agent as a trustee for the Lenders or impose on
any of them any duties or obligations other than those for which express provision is made in this
Agreement.



18.3 Information




The Agent will promptly advise the Lenders of each notice received by it from the Borrower
hereunder. The Agent shall not be under any obligation towards the Lenders to ascertain or enquire
as to the performance or observance of any of the terms or conditions hereof, other than a failure
to make payment of sums due.



18.4 Default




The Agent shall not (with the exception of the Borrower’s failure to pay sums due) be deemed to
have knowledge of the occurrence of any Event of Default unless the Agent has received notice
thereof from the Borrower or a Lender. In the event the Agent receives such notice, the Agent shall
promptly give notice thereof to the Lenders. The Agent shall take such action with respect to such
Event of Default as may be directed by the Lenders provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obliged to) take such action or
refrain from taking such action, with respect to such Event of Default as the Agent shall in its
absolute discretion deem advisable in the best interest of the Lenders, provided always that the
Agent shall advise the Lenders of such action and shall consult with them as soon as possible
thereafter in order to determine future action.



18.5 Rely on communication




In performing its duties and exercising its powers hereunder, the Agent shall be entitled to rely
on any communication believed by it to be genuine and to have been sent or signed by the person by
whom it purports to have been sent or signed.



 









 





18.6 Responsibility of the Agent




The Agent takes no responsibility for the truth of any covenants, representations or undertakings
given or made herein or for the validity, effectiveness, adequacy, legality or enforceability of
this Agreement or any of the Security Documents. Neither the Agent nor any of its directors,
officers, employees or attorneys-in-fact shall be responsible for any action taken or omitted to be
taken by it or them under or in connection herewith, except for its or their own gross negligence
or wilful misconduct.



18.7 Responsibility of each Lender




Each Lender shall be responsible for making its own independent investigation of the financial
condition and affairs of the Borrower in connection with the making and continuance of the
Facilities and has made its own appraisal of the creditworthiness of the Borrower.



18.8 Set off




If any Lender at any time receives or recovers by set-off or otherwise any sum which it is obliged
(or being so entitled has elected) to apply towards payment of any amount due to it hereunder
(otherwise than amounts specifically payable to the Lender under the terms of this Agreement) then
such Lender shall be obliged to offer to each other Lender through the Agent such payment by way of
adjustment as may be necessary to ensure that at all times each Lender receives the portion of
principal, interest, fees and commissions due to it under this Agreement, however, that such offer
shall be conditional upon each Lender who may accept such offer (the “Accepting Lender”) agreeing
to indemnify the Lender making such offer (the “Offering Lender”) on terms reasonably acceptable to
the Offering Lender against any loss (other than the loss suffered by such payment by way of
adjustment) which the Offering Lender
may subsequently suffer by reason of having made such payment by way of adjustment to such
Accepting Lender.



18.9 Distribution of payments




The Agent shall pay with funds having same day value as the funds received to the order of each of
the Lenders each Lender’s Proportionate Share of every sum of money received by the Agent pursuant
to the Finance Documents (with the exception of any amounts, which by the terms of the Finance
Documents, are paid to the Agent for the account of the Agent alone or specifically for the account
of one or more Lenders) and until so paid such amount shall be held by the Agent on trust
absolutely for that Lender.



18.10 Reimbursement of cost




Each Lender shall rateably in accordance with its respective participation in the Facilities,
indemnify and hold the Agent harmless against any and all costs, claims, expenses (including legal
fees), loss or liability, which the Agent may suffer or incur by reason of any action taken or
omitted by it as the Agent hereunder to the extent that the Agent shall not have been reimbursed
therefor by the Borrower, unless and to the extent such loss or liability is caused by the gross
negligence or wilful misconduct of the Agent.



18.11 Resignation




The Agent may and shall upon request from the Lenders and with the consent of the Borrower resign
its appointment hereunder by giving written notice to that effect to each of the Lenders and to the
Borrower, provided that no such resignation shall be effective until a successor for the Agent is
appointed in accordance with the succeeding provisions of this clause. If the Agent gives notice of
its resignation, then any of the Lenders or any reputable and experienced bank or other financial
institution may be appointed as a successor to the Agent by the Lenders during the period of such
notice. If no such successor is so appointed then (A) the outgoing Agent shall be discharged from
any further obligation under this Agreement but shall remain entitled to the benefit of the
provisions of this clause and (B) its successor and each of the other parties hereto shall have the
same rights and obligations amongst themselves as they would have had if such successor had been a
party hereto. The change of Agent shall be at no cost to the Borrower.



 









 





19. FEES AND EXPENSES




19.1 Arrangement fee





	(i)	 	The Borrower shall pay to the Agent an arrangement fee of 0.5% of the Credit Facility,
payable on the Acceptance Date; and
	 
	(ii)	 	The Borrower shall pay to the Agent an arrangement fee of 0.1% of the amount of any issued
Guarantee, payable on the Utilisation Date of such Guarantee.





19.2 Cost and expenses




The Borrower shall pay to the Agent on demand all expenses (including legal, collateral and
out-of-pocket expenses) reasonably incurred by the Agent or the Lenders in connection with;




	(i)	 	the negotiation, preparation, execution and, where relevant, registration of the Finance
Documents,
	 
	(ii)	 	the satisfaction of the conditions precedent set out in clause 4,
	 
	(iii)	 	any amendment or extension of or the granting of any waiver or consent under any of the
Finance Documents, in each such case together with all stamp, documentary, registration or
other like duties or taxes (including any duties or taxes payable by the Lenders) imposed
thereon or in connection therewith, and
	 
	(iv)	 	the maintenance, protection and enforcement of any right under the Finance Documents.





19.3 Non recoverable cost




The fees and expenses specified in clause 19 shall be payable by the Borrower in any event and
shall in no circumstances be recoverable from the Agent or the Lenders. The Borrower’s obligation
to pay any fees and expenses hereunder shall survive the termination date of this Agreement.



20. MISCELLANEOUS




20.1 Waiver




No failure or delay on the part of the Agent and/or the Lenders to exercise any right, power or
remedy under the Finance Documents or any of them shall operate as a waiver thereof nor shall any
single or partial exercise by or on behalf of the Agent and/or the Lenders of any such right, power
or remedy preclude any other or further exercise thereof or the exercise of any other power or
right. The remedies provided in the Finance Documents are cumulative and are not exclusive of any
remedies provided by law.



20.2 Failure to comply




If the Borrower fails to comply with any provision of the Finance Documents, the Lenders are hereby
irrevocably authorised by the Borrower (but without prejudice to the right of the Agent and/or the
Lenders to consider such non-compliance as an Event of Default) to effect such compliance on the
part of the Borrower in any manner available to the Lenders.



20.3 Outstanding Indebtedness




In order to determine the amount and origin of any debt due to the Agent and/or the Lenders at any
time by the Borrower under or pursuant to the Finance Documents or otherwise in connection with the
Facilities or the security therefor or the enforcement thereof, the books and accounts of the Agent
shall (save in the case of manifest error) always be prima facie evidence to the effect that
payment of any amount being claimed by the Agent as due and payable can at no time be suspended or
withheld by the



 









 





Borrower by reason of a dispute on what is due and payable without prejudice
however to the obligation of the Agent and/or the Lenders to repay any amount collected or received
in excess.



20.4 Security Documents




The Security Documents and the Cash Pool System Agreement are an integrated part of this Agreement.



20.5 Partial illegality




If at any time any provisions contained in any of the Finance Documents should be or become
illegal, invalid or unenforceable in any respect under any law, the legality, validity or
enforceability of the remaining provisions hereof shall not in any way be affected or impaired
thereby.



20.6 Inconsistency




In the event of any inconsistency between the provisions of this Agreement and the Security
Documents, the provisions of this Agreement shall prevail.



21. TRANSFER




21.1 Lenders’ transfer




A Lender (the “Assignor”) may transfer all or part of its participation in the Agreement in whole
or in part to;




	(i)	 	any subsidiary or affiliate, and
	 
	(ii)	 	a bank and/or financial institution subject to written approval by the Borrower, which shall
not be unreasonably withheld by the Borrower;





(such subsidiary/affiliate or bank and/or financial institution being the “Assignee”), provided
however that:




	(a)	 	The obligations are transferred in accordance with clause 21.2 (Procedure for transfer).
	 
	(b)	 	A transfer of obligations will be effective only if the Assignee confirms to the Agent and
the Borrower that it undertakes to be bound by the terms of this Agreement as a Lender in form
and substance satisfactory to the Agent. On the transfer becoming effective in this manner the
Assignor shall be relieved of its obligations under this Agreement to the extent that they are
transferred to the Assignee.
	 
	(c)	 	The Assignor is not responsible to the Assignee for:






	 	(i)	 	the execution, genuineness, validity, enforceability or sufficiency of this
Agreement or any other document;
	 
	 	(ii)	 	the collectability of amounts payable under this Agreement; or
	 
	 	(iii)	 	the accuracy of any statements (whether written or oral) made in or in
connection with this Agreement.






	(d)	 	The Assignee shall confirm to the Assignor and the other Lenders that it:






	 	(i)	 	has made its own independent investigation and assessment of the financial
condition and affairs of the Borrower and its related entities in connection with its
participation in this Agreement and has not relied exclusively on any information
provided to it by the Assignor in connection with this Agreement; and




 









 









	 	(ii)	 	will continue to make its own independent appraisal of the creditworthiness
of the Borrower and its related entities while any amount is or may be outstanding
under this Agreement or any Commitment is in force.






	(e)	 	Any reference in this Agreement to a Lender includes the Assignee but excludes a Lender if no
amount is or may be owed to or by it under this Agreement and its Commitment has been
cancelled or reduced to nil.





21.2 Procedure for transfer





	(i)	 	A transfer is effected if:






	 	(a)	 	the Assignor and the Assignee deliver to the Agent and the Borrower (if
applicable) a duly completed certificate, substantially in the form of Schedule 6 (a
“Transfer Certificate”); and
	 
	 	(b)	 	the Agent executes it.






	(ii)	 	Each party (other than the Assignor and the Assignee) irrevocably authorizes the Agent to
execute any duly completed Transfer Certificates on its behalf.
	 
	(iii)	 	On the date of execution of the Transfer Certificate by the Agent or, if later, on the date
specified in the Transfer Certificate:






	(a)	 	the Assignor and the other parties (the “existing parties”) will be
released from their obligations to each other (the “discharged obligations”);
	 
	(b)	 	the Assignee and the existing Parties will assume obligations towards
each other which differ from the discharged obligations insofar as they are owed to
or assumed by the Assignee instead of the Assignor;
	 
	(c)	 	the rights of the Assignor and the existing Parties and vice versa
(the “discharged rights”) will be cancelled; and
	 
	(d)	 	the Assignee and the existing Parties will acquire rights against each
other which differ from the discharged rights only, insofar as they are exercisable
by or against the Assignee instead of the Assignor.





21.3 Borrower’s transfer




The Borrower may not transfer its rights and obligations under this Agreement.



22. AMENDMENTS AND WAIVERS




22.1 Procedure




The Finance Documents may only be amended or changed by a document in writing signed by the
Borrower and the Agent.



22.2 Waivers




No delay or failure by the Agent in exercising any right or remedy shall be construed or take
effect as a waiver or release of that right or remedy and the Agent and the Lenders shall always be
entitled to exercise all their rights and remedies unless they shall have expressly waived them in
writing.



 









 





23. NOTICES




23.1 Notices




Every notice, request, demand or other communication under this Agreement or (unless otherwise
provided therein) under any of the Security Documents shall be in writing and may be given or made
by fax.




	 	(i)	 	if to be sent to the Borrower, be sent to it at:
	 
	 	 	 	Deep Ocean ASA

Stoltenberggata 1

NO-5527 Haugesund

Norway
	 
	 	 	 	Fax: +47 52 70 04 01
	 
	 	(ii)	 	if to be sent to the Lenders and/or the Agent, be sent to the Agent at:
	 
	 	 	 	Sparebank 1 SR-Bank

Sørhauggaten 150

P. O. Box 453

NO-5501 Haugesund

Norway
	 
	 	 	 	Fax: + 47 51 53 54 67





or such other address or fax number as is notified by one party to the other party under this
Agreement.



24. LAW AND JURISDICTION




24.1 Law




The Agreement shall be governed by and construed in accordance with the laws of Norway.



24.2 Jurisdiction




The Borrower accepts Stavanger tingrett as venue, provided however, that the choice of venue shall
not prevent the Agent and/or the Lenders from commencing proceedings against the Borrower in any
other court of competent jurisdiction.



*****






 









 









SCHEDULE 3




LIST OF ORIGINAL LENDERS AND COMMITMENTS




CASH POOL CREDIT:




	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	Sparebank 1 SR-Bank

	 	 	100	%	 	NOK 200,000,000
	Sørhauggaten 150

P. O. Box 453

NO-5501 Haugesund

Norway
	 	 	 	 	 	 	 	 






CREDIT FACILITY:




	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	Sparebank 1 SR-Bank

	 	 	100	%	 	NOK 230,000,000
	Sørhauggaten 150

P. O. Box 453

NO-5501 Haugesund

Norway
	 	 	 	 	 	 	 	 






GUARANTEE FACILITY:




	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	Sparebank 1 SR-Bank

	 	 	100	%	 	NOK 270,000,000
	Sørhauggaten 150

P. O. Box 453

NO-5501 Haugesund

Norway
	 	 	 	 	 	 	 	 






TERM LOAN:




	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	Sparebank 1 SR-Bank

	 	 	100	%	 	NOK 155,000,000
	Sørhauggaten 150

P. O. Box 453

NO-5501 Haugesund

Norway
	 	 	 	 	 	 	 	 






ADDITIONAL TERM LOAN:




	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	Sparebank 1 SR-Bank

	 	 	100	%	 	NOK 150,000,000
	Sørhauggaten 150

P. O. Box 453
	 	 	 	 	 	 	 	 






 









 







	 	 	 	 	 	 	 	 	 
	Name and address	 	Proportionate share	 	Commitment
	NO-5501 Haugesund

Norway
	 	 	 	 	 	 	 	 
	 
	TOTAL
	 	 	 	 	 	NOK 1,005,000,000






 









 






SCHEDULE 4




PART I – FIRST UTILISATION DATE




1. Corporate Documents




Certified copies of ach of the following documents to be presented to the Agent prior to the first
Utilisation Date:




	1.1	 	The Borrower:






	 	(a)	 	Articles of Association or similar;
	 
	 	(b)	 	Certificate of Incorporation or similar;
	 
	 	(c)	 	Resolution of the board of directors resolving to execute the Agreement
and the Security Documents and any other document in relation thereto;
	 
	 	(d)	 	Power of Attorney.






	1.2	 	Do Bergen:






	 	(a)	 	Articles of Association or similar;
	 
	 	(b)	 	Certificate of Incorporation or similar;
	 
	 	(c)	 	Resolution of the board of directors resolving to execute the Charge over
Machinery and Plant and any other document in relation thereto;
	 
	 	(d)	 	Power of Attorney.






	1.3	 	Each other Group Company:






	 	(a)	 	Articles of Association or similar; and
	 
	 	(b)	 	Certificate of Incorporation or similar.





2. Finance Documents




Each of the following documents to be presented to the Agent in original prior to the first
Utilisation Date, duly signed and executed by the relevant parties together with any other
documents referred to therein duly executed by the relevant parties:




	(i)	 	this Agreement;
	 
	(ii)	 	the Cash Pool System Agreement
	 
	(iii)	 	the Charges over Inventory, with evidence that the Charges over Inventory have or will in
connection with the first Utilisation under the Agreement be registered with their intended
priority in the Registry of Moveable Property;
	 
	(iv)	 	the Charges over Machinery and Plant, with evidence that the Charges over Machinery and Plant
have or will in connection with the first Utilisation under the Agreement be registered with
their intended priority in the Registry of Moveable Property;
	 
	(v)	 	the Factoring Agreements, with evidence that the Factoring Agreements have or will in
connection with the first Utilisation under the Agreement be registered with their intended
priority in the Registry of Moveable Property;
	 
	(vi)	 	the Mortgage over the Deep Endeavour, and deed of covenants collateral thereto, with evidence
that the Mortgage over the Deep Endeavour has or will in connection with the first Utilisation
under the Agreement be registered with its intended priority in the Ship Registry;




 









 






	(vii)	 	the Pledges of Shares, with evidence that the Pledges of Shares have or will in connection
with the first Utilisation under the Agreement be acknowledged by the
Group Companies whose shares have been pledged;
	 
	(viii)	 	the Declaration of Pledge; and
	 
	(ix)	 	extracts of the shareholder’s registers of the Group Companies.





3. Transaction Documents




Certified copies of ach of the following documents to be presented to the Agent prior to the first
Utilisation Date:




	(i)	 	the Investment Plan;





4. Other Documents




Certified copies of ach of the following documents to be presented to the Agent prior to the first
Utilisation Date:




	(i)	 	a legal opinion in favour of the Lenders in respect of any relevant jurisdiction;
	 
	(ii)	 	any documents required by the Lenders pursuant to any “Know your customer” checks; and
	 
	(iii)	 	such other documents and evidence that the Agent may require.





PART II –UTILISATION OF THE FACILITIES




1. Corporate Documents




Certified copies of ach of the following documents to be presented to the Agent prior to the
relevant Utilisation Date under a Facility:




	1.1	 	The Borrower (if required by the Agent in its sole, unconditional opinion):






	 	(a)	 	Articles of Association or similar;
	 
	 	(b)	 	Certificate of Incorporation or similar;
	 
	 	(c)	 	Resolution of the board of directors resolving to execute the relevant
Security Documents and any other document in relation thereto;
	 
	 	(d)	 	Power of Attorney.





2. Finance Documents




Each of the following documents to be presented to the Agent in original prior to the relevant
Utilisation Date under a Facility, duly signed and executed by the relevant parties together with
any other documents referred to therein duly executed by the relevant parties:




	(i)	 	a Utilisation Request;
	 
	(ii)	 	such Security Documents as in the Agent in its sole, unconditional opinion may require.





3. Other Documents




Certified copies of ach of the following documents to be presented to the Agent prior to the
relevant Utilisation Date under a Facility:



 









 






	(i)	 	evidence that the relevant Utilisation is made in accordance with the purpose of the relevant
Facility; and
	 
	(ii)	 	such documents and evidence that the Agent in its sole, unconditional opinion may require.




 









 













EXECUTION PAGE




IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed and delivered
the day and the year first above written.



	 	 	 
	SIGNED

	 	SIGNED
	SPAREBANK 1 SR-BANK

	 	DEEP OCEAN ASA
	as Agent and Lender

	 	as Borrower