DISCOVER THAT ANY OF THE VESSELS IS IN A
CONDITION THAT VIOLATES IN ANY RESPECT THE REQUIREMENTS OF SECTION 5.2(I) ABOVE,
THE LENDER SHALL HAVE THE RIGHT TO CALL FOR THE DRYDOCKING AND REPAIR THEREOF
WITHIN NINETY (90) DAYS AFTER THE COMPLETION OF THE CURRENT PROJECT FOR WHICH
SUCH VESSEL IS EMPLOYED AND AT THE SOLE COST AND EXPENSE OF THE BORROWER.
THE
BORROWER SHALL ALSO PERMIT THE LENDER AND ITS REPRESENTATIVES FROM
25
TIME TO TIME, TO VISIT AND INSPECT ITS PROPERTIES; INSPECT, AUDIT AND MAKE
EXTRACTS FROM ITS BOOKS, RECORDS AND FILES, INCLUDING, BUT NOT LIMITED TO,
MANAGEMENT LETTERS PREPARED BY ITS AUDITORS; AND DISCUSS WITH ITS PRINCIPAL
OFFICERS, AND ITS INDEPENDENT ACCOUNTANTS, ITS BUSINESS, ASSETS, LIABILITIES,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS; PROVIDED, HOWEVER, THAT PRIOR TO
AN EVENT OF DEFAULT, THE LENDER SHALL CONDUCT AN INSPECTION OR AUDIT, VISIT OR
INSPECTION NOT MORE THAN TWICE ANNUALLY AT THE EXPENSE OF THE LENDER, DURING
NORMAL BUSINESS HOURS WITH MINIMAL DISRUPTION OF THE BORROWER'S BUSINESS AND
AFTER GIVING REASONABLE PRIOR WRITTEN NOTICE.
NOTWITHSTANDING THE FOREGOING,
UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT UNDER THE
SENIOR CREDIT FACILITY, WHETHER OR NOT AN EVENT OF DEFAULT SHALL THEN BE
CONTINUING HEREUNDER, THE LENDER SHALL HAVE THE ADDITIONAL RIGHT TO INSPECT THE
VESSELS AT ANY TIME AND FROM TIME TO TIME DURING NORMAL BUSINESS HOURS WITH
MINIMAL DISRUPTION OF THE BORROWER'S BUSINESS AND AFTER GIVING REASONABLE PRIOR
WRITTEN NOTICE, WHICH INSPECTION RIGHTS SHALL NOT COUNT AGAINST THE TWICE ANNUAL
INSPECTION RIGHTS DESCRIBED ABOVE.
(K)
LITIGATION.
THE BORROWER SHALL PROMPTLY INFORM THE LENDER OF ANY
PENDING, OR THREAT IN WRITING OF, LITIGATION INVOLVING IT, WHERE THE AMOUNT
CLAIMED, TOGETHER WITH ALL OTHER CLAIMS THEN PENDING OR THREATENED, EXCEEDS
$10,000,000, AND OF ANY OTHER EVENT, CONDITION OR OCCURRENCE WHICH, TO THE BEST
OF ITS KNOWLEDGE AND BELIEF, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.
(L)
INSURANCE.
AT ALL TIMES DURING THE TERM HEREOF, THE BORROWER
SHALL OBTAIN AND KEEP EACH VESSEL INSURED AGAINST THE RISKS INDICATED BELOW:
(i)
marine hull insurance on full conditions as per Institute Time
Clauses Hull (1/10/83) or American Institute Hull Clauses (June 2, 1977) or
other conditions approved by the Lender,
insuring each of the Vessels against
the usual risks, and for all Vessels taken together for an agreed aggregate
value of not less than 110% of the outstanding principal balance of the Loan and
in all events not less, for each Vessel, than the fair market value of such
Vessel as shown in the Initial Appraisal Report;
(ii)
full protection and indemnity cover on terms and conditions as
per the rules of a protection and indemnity club that is a member of the
International Group of Protection and Indemnity Associations, or equivalent
cover acceptable to the Lender, providing for liability cover in an amount at
least equal to $50,000,000 for any one accident or occurrence;
(iii)
to the extent not already included above, insurance against
liability for pollution,