Document:

ex4-1_8.htm

Exhibit 4.1.8

 

	
 

DATED 22 July 2014

	
 

 

 

 

Up to USD 141,000,000

 

TERM LOAN FACILITY AGREEMENT

 

 

for

 

 

Borrowers to be nominated

 

 

with

 

DHT Holdings Inc

as Guarantor

 

 

 

arranged by

DVB Bank SE

 

Nordea Bank Norge ASA, and

 

ABN AMRO BANK N.V. Oslo Branch

acting as Mandated Lead Arrangers

 

with

 

ABN AMRO BANK N.V.

acting as Agent and Security Agent

 

 

 

 

  

  

 

 

 

	
CONTENTS

	 
	
Clause

	
Page

	 	 
	
1.

	
Definitions and Interpretation

	
5

	 	 	 
	
2.

	
THE FACILITY

	
19

	 	 	 
	
3.

	
Purpose

	
19

	 	 	 
	
4.

	
Conditions of Utilisation

	
19

	 	 	 
	
5.

	
Utilisation

	
21

	 	 	 
	
6.

	
Repayment

	
22

	 	 	 
	
7.

	
Prepayment and cancellation

	
23

	 	 	 
	
8.

	
Interest

	
27

	 	 	 
	
9.

	
Interest Periods

	
28

	 	 	 
	
10.

	
Changes to the calculation of interest

	
28

	 	 	 
	
11.

	
Fees

	
29

	 	 	 
	
12.

	
Tax gross up and indemnities

	
31

	 	 	 
	
13.

	
Increased costs

	
35

	 	 	 
	
14.

	
Other indemnities

	
36

	 	 	 
	
15.

	
Mitigation by the Lenders

	
38

	 	 	 
	
16.

	
Costs and expenses

	
38

	 	 	 
	
17.

	
Security

	
40

	 	 	 
	
18.

	
Guarantee, indemnity AND JOINT AND SEVERAL LIABILITY

	
42

	 	 	 
	
19.

	
Representations

	
47

	 	 	 
	
20.

	
Information undertakings

	
51

	 	 	 
	
21.

	
Financial covenants

	
54

	 	 	 
	
22.

	
General undertakings

	
55

	 	 	 
	
23.

	
Vessels undertakings

	
59

	 	 	 
	
24.

	
Events of Default

	
63

	 	 	 
	
25.

	
Changes to the Lenders

	
67

	 	 	 
	
26.

	
Changes to the Obligors

	
70

	 	 	 
	
27.

	
Role of the Agent, the security agent and the Mandated Lead Arrangers

	
71

	 	 	 
	
28.

	
Conduct of business by the Finance Parties or the Hedging banks

	
76

	 	 	 
	
29.

	
Sharing among the Finance Parties

	
76

	 	 	 
	
30.

	
Payment mechanics

	
78

	 	 	 
	
31.

	
Set-off

	
80

	 	 	 
	
32.

	
Notices

	
80

 

  

  

 

 

	
33.

	
Calculations and certificates

	
82

	 	 	 
	
34.

	
Partial invalidity

	
82

	 	 	 
	
35.

	
Remedies and waivers

	
82

	 	 	 
	
36.

	
Amendments and waivers

	
82

	 	 	 
	
37.

	
Confidentiality

	
83

	 	 	 
	
38.

	
Counterparts

	
86

	 	 	 
	
39.

	
Conflict

	
87

	 	 	 
	
40.

	
Governing law

	
88

	 	 	 
	
41.

	
Enforcement

	
88

  

  

 

 

 

	
THIS AGREEMENT is dated 22 July 2014 and made between:

	 
	
(1)

	
ONE (1) OR UP TO THREE (3) COMPANIES to be nominated by the Guarantor prior to Utilisation by issuance of an Accession Letter

	  	  
	  	
as joint and several borrowers (the "Borrowers");

	  	  
	
(2)

	
DHT HOLDINGS INC, The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands

	  	  
	  	
as guarantor (the "Guarantor");

	  	  
	
(3)

	
DVB BANK SE, acting through its offices at Park House, 16-18 Finsbury Circus, London EC2M 7 EB, United Kingdom;

	  	  
	  	
NORDEA BANK NORGE ASA, acting through its offices at Middelthuns gate 17, 0368 Oslo, Norway and

	  	  
	  	
ABN AMRO BANK N.V. OSLO BRANCH, acting through its offices at Olav Vs gate. 5, 0161 Oslo, Norway

	  	  
	 	
as mandated lead arrangers (the "Mandated Lead Arrangers");

	 	 
	
(4)

	
THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the "Original Lenders");

	  	  
	
(5)

	
DVB BANK SE, acting through its offices at Platz der Republik 6, 60325 Frankfurt, Germany;

	  	  
	  	
NORDEA BANK FINLAND PLC acting through its offices at Aleksanterinkatu 36, Helsinki, Finland and

	  	  
	  	
ABN AMRO BANK N.V., acting through its offices at Gustav Mahlerlaan 10, 1082 Amsterdam, the Netherlands

	  	  
	  	
(the "Hedging Banks");

	  	  
	
(6)

	
ABN AMRO BANK N.V. acting through its offices at Gustav Mahlerlaan 10, 1082 Amsterdam, the Netherlands  as agent of the other Finance Parties (the "Agent"); and

	  	  
	
(7)

	
ABN AMRO BANK N.V., acting through its offices at Gustav Mahlerlaan 10, 1082 Amsterdam, the Netherlands as security agent of the other Finance Parties and the Hedging Banks (the "Security Agent")

	  	  
	 	 
	 	 
	
IT IS AGREED as follows:

 

  

  

 

SECTION 1

INTERPRETATION

 

	
1.

	
DEFINITIONS AND INTERPRETATION

	  	  
	
1.1

	
Definitions

	  	
In this Agreement:

 

	  	
"Accession Letter" means a letter in the form set out in Schedule 6 (Form of Accession Letter) whereby a company becomes a Borrower to this Agreement in relation to all existing Parties, and all existing Parties, including any subsequent Party, becomes bound in relation to such new acceding Party, and making necessary amendments and adjustments to this Agreement as a consequence of such accession.

 

	  	
"Account Bank" means ABN AMRO BANK N.V..

 

	  	
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

 

	  	
"Agreement" means this facility agreement, as it may be amended, supplemented and varied in writing from time to time, including its schedules.

 

	  	
“Approved Brokers” means Clarksons, SSY, RS Platou, Arrow, Compass and Fearnleys.

 

	  	
"Approved Ship Registry" means the Marshall Islands Ship Registry, the Hong Kong Ship Registry and any ship registry as approved in writing by the Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"Assignment Agreement" means a general assignment agreement for assignment on first priority of the Earnings, the insurance proceeds in respect of all Insurances and rights under any Hedging Agreement to be executed by the Borrowers in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance acceptable to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

 

	  	
"Availability Period" means the period from and including the date of this Agreement to and including the earlier of (i) the scheduled delivery date of the relevant Vessel taking into account the maximum permissible delays under the relevant Shipbuilding Contract before the relevant Borrower is entitled to cancel such Shipbuilding Contract, or (ii) 30 June 2017 whichever is the earlier, or such later date as the Agent (on behalf of the Finance Parties) may agree.

 

	  	
"Available Facility" means the aggregate of each Lender's Commitment.

 

	  	
"Break Costs" means the amount (if any) by which:

 

	  	
(a)

 

	
the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan, a Tranche or Unpaid Sum to the last day of the current Interest Period in respect of the Loan, that Tranche or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

  

5

 

	
exceeds:

 

	  	
(b)

 

	
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

 

	  	
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Amsterdam, Frankfurt, London, New York City and Oslo. For the purpose of Utilisation, Seoul, Hong Kong, Singapore (or any other relevant place of payment of the proceeds) shall be included.

 

	  	
“Cash” means the aggregate amount of cash, bank deposits and fully marketable securities (issued by an A rated or better financial institution), excluding restricted cash which is not at the disposal of the relevant company.

 

	  	
“Change of Control” means if any person or a group of persons acting in concert gain ownership or control of 33 1/3 % or more of the voting rights of the Guarantor.  For the purposes of this definition, "control" of the Guarantor means (i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 33 1/3 % of the maximum number of votes that might be cast at a general meeting of the Guarantor,  and/or (ii) the holding beneficially of more than 33 1/3 % of the issued share capital of the Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), and "acting in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of 33 1/3 % of the Guarantor.

 

	  	
"Charterer" means any charterer approved by the Agent (on behalf of the Finance Parties) under a Charterparty.

 

	  	
"Charterparty" means any time or bareboat charter or any pool agreement or any other agreements of employment entered or to be entered into between the relevant Borrower and the relevant Charterer for the chartering of a Vessel for a period of 12 Months or more, in form and substance acceptable to the Agent (on behalf of the Finance Parties).

 

	  	
"Code" means the US Internal Revenue Code of 1986.

 

	  	
"Commercial Management Agreement" means any agreement made or to be made between a Borrower and the Commercial Manager for the commercial management of a Vessel.

 

	  	
"Commercial Manager" means any commercial manager acceptable to the Agent (on behalf of the Finance Parties).

 

	  	
"Commitment" means:

 

	  	
(a)

 

	
in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred to it under this Agreement; and

 

	  	
(b)

 

	
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

 

	  	
to the extent not cancelled, reduced or transferred by it under this Agreement.

 

  

6

 

	  	
"Compliance Certificate" means a certificate substantially in the form set out in Schedule 5 (Form of Compliance Certificate).

 

	  	
“Current Assets” means the aggregate of the current assets of a company as determined in accordance with GAAP.

 

	  	
“Current Liabilities” means the aggregate of the current liabilities of a company, excluding the next 6 months installments on any long-term loans, as determined in accordance with GAAP.

 

	  	
"Deed of Assignment" means one or more general deed of assignment in respect of any  Charterparty, to be executed by the relevant Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks), in form and substance acceptable to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"Default" means an Event of Default or any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

	  	
"Delivery Date" means in respect of a Vessel, the date of actual delivery of the relevant Vessel to the relevant Borrower.

 

	  	
"Disruption Event" means either or both of:

 

	  	
(a)

 

	
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

 

	  	
(b)

 

	
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

 

	  	  	
(i)

 

	
from performing its payment obligations under the Finance Documents; or

 

	  	  	
(ii)

 

	
from communicating with other Parties in accordance with the terms of the Finance Documents,

 

	  	
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

 

	  	
"DOC" means in relation to the Technical Manager a valid document of compliance relevant to the Vessels issued to such company pursuant to paragraph 13.2 of the ISM Code.

 

	  	
"Earnings" means all moneys whatsoever which are now or later become, payable (actually or contingently) to a Borrower in respect of and/or arising out of the use of or operation of a Vessel, including (but not limited to):

 

	  	
(a)

 

	
all freight, hire and passage moneys payable to any of the Borrowers, including (without limitation) payments of any nature under any contract or any other agreement for the employment, use, possession, management and/or operation of any of the Vessels;

 

	  	
(b)

 

	
any claim under any guarantees related to hire payable to any of the Vessels as a consequence of the operation of the Vessels;

 

  

7

 

	  	
(c)

 

	
any compensation payable to any of the Borrowers in the event of any requisition of a Vessel or for the use of a Vessel by any government authority or other competent authority;

 

	  	
(d)

 

	
remuneration for salvage, towage and other services performed by a Vessel payable to any of the Borrowers;

 

	  	
(e)

 

	
demurrage and retention money receivable by any of the Borrowers in relation to any of the Vessels;

 

	  	
(f)

 

	
all moneys which are at any time payable under the Insurances in respect of loss of earnings from any of the Vessels;

 

	  	
(g)

 

	
if and whenever a Vessel is employed on terms whereby any moneys falling within paragraph a) to f) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Vessel; and

 

	  	
(h)

 

	
any other money which arise out of the use of or operation of a Vessel and moneys whatsoever due or to become due to any of the Borrowers from third parties in relation to the Vessels.

 

	  	
“Earnings Accounts” means any account to be nominated and designated as Earnings Accounts for this purpose by the Borrowers or the Guarantor in cooperation with the Agent, with the Account Bank, or such other accounts as designated by the Agent.

 

	  	
"Environmental Claim" means any claim, proceeding, formal notice or investigation by any person or company in respect of any Environmental Law or Environmental Permits.

 

	  	
"Environmental Law" means any applicable law or regulation which relates to:

 

	  	
(a)

 

	
the pollution or protection of the environment or to the carriage of material which is capable of polluting the environment;

 

	  	
(b)

 

	
harm to or the protection of human health;

 

	  	
(c)

 

	
the conditions of the workplace; or

 

	  	
(d)

 

	
any emission or substance capable of causing harm to any living organism or the environment.

 

	  	
"Environmental Permits" means any permit, licence, consent, approval and other and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of business conducted on or from the properties owned or used by the relevant company.

 

	  	
"Event of Default" means any event or circumstance specified as such in Clause 24 (Events of Default).

 

	  	
“Excess Values” means the positive or negative (as the case may be) difference between (i) the Market Value (in respect of the Vessels) or the market value as established in accordance with the procedure described in the definition of “Market Value” (in respect of other vessels), and (ii) the book value of the relevant vessel.

 

	  	
"FA Act" means the Norwegian Financial Agreements Act of 25 June 1999 No. 46 (in No. finansavtaleloven).

 

  

8

 

	  	
"Facility" means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

 

	  	
"Facility Office" means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

 

	  	
"FATCA" (Foreign Account Tax Compliance Act) means:

 

	  	
(a)

 

	
sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

 

	  	
(b)

 

	
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

 

	  	
(c)

 

	
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

 

	  	
"FATCA Application Date" means:

 

	  	
(a)

 

	
in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

	  	
(b)

 

	
in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

 

	  	
(c)

 

	
in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

 

	  	
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

	  	
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.

 

	  	
"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

 

	  	
"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

 

	  	
"FATCA Payment" means either:

 

	  	
(a)

 

	
the increase in a payment made by an Obligor to a Finance Party under Clause 12.7 (FATCA Deduction and gross-up by Obligor) or paragraph (b) of Clause 12.8 (FATCA Deduction by Finance Party); or

 

	  	
(b)

 

	
a payment under paragraph (d) of Clause 12.8 (FATCA Deduction by Finance Party); or

 

 

  

9

 

	  	
"Fee Letter" means any letter or letters between the Agent and the Borrowers setting out any of the fees referred to in Clause 11 (Fees).

 

	  	
"Finance Document" means this Agreement, any Security Document, any Accession Letter, any Fee Letter and any other document designated as such by the Agent and the Borrowers.

 

	  	
"Finance Party" means the Agent, the Security Agent, a Mandated Lead Arranger or a Lender.

 

	  	
"Financial Indebtedness" means any indebtedness for or in respect of:

 

	  	
(a)

 

	
moneys borrowed;

 

	  	
(b)

 

	
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

	  	
(c)

 

	
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

	  	
(d)

 

	
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

 

	  	
(e)

 

	
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

 

	  	
(f)

 

	
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

 

	  	
(g)

 

	
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

 

	  	
(h)

 

	
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

 

	  	
(i)

 

	
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

 

	  	
"GAAP" means generally accepted accounting principles such as IFRS.

 

	  	
"Guarantee" means the irrevocable, unconditional and on-first-demand guarantee given by the Guarantor under Clause 18 of this Agreement.

 

	  	
"Hedging Agreement" means any master agreement (as amended at any time) and/or any swap transaction, confirmation, schedule or hedging agreement pursuant to such master agreement for the purpose of hedging the interest rate risk entered or to be entered into between any of the Borrowers and the Hedging Banks.

 

	  	
"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

 

	  	
"IAPPC" means the International Air Pollution Prevention Certificate required under Regulation 6 of the International Convention for the Prevention of Pollution From Ships 1973/1978 (MARPOL).

 

	  	
"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

 

 

  

10

 

	  	
"Insurances" means, in relation to the Vessels, all policies and contracts of insurance (which expression includes all entries of the Vessels in a protection and indemnity or war risk association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of any of the Borrowers (whether in the sole name of a Borrower or in the joint names of a Borrower and any other person) in respect of the Vessels or otherwise in connection with the Vessels and all benefits thereunder (including claims of whatsoever nature and return of premiums).

 

	  	
"Interest Payment Date" means the last day of each Interest Period, and in respect of Interest Periods exceeding three (3) months, also the date falling three (3) months after the commencement thereof, and each date falling at quarterly intervals thereafter.

 

	  	
"Interest Period" means, in relation to the Loan or a Tranche, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

 

	  	
"Intra Group Loans" means any loans granted by any of the Obligors to any of their Affiliates.

 

	  	
"Intra Group Loans Assignment Agreement" means one or more general assignment agreements on first priority of any claims any Obligor may have in respect of any Intra Group Loans, to be executed by any Obligor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"ISM Code" means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevent.

 

	  	
"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.

 

	  	
"ISSC" means an International Ship Security Certificate issued by the Classification Society confirming that a Vessel is in compliance with the ISPS Code.

 

	  	
"Lender" means:

 

	  	
(a)

 

	
any Original Lender; and

 

	  	
(b)

 

	
any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 25 (Changes to the Lenders),

 

	  	
which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

 

	  	
"LIBOR" (London Interbank Offered Rate) means, in relation to the Loan or a Tranche:

 

	  	
(a)

 

	
the applicable Screen Rate; or

 

	  	
(b)

 

	
(if no Screen Rate is available for USD for the Interest Period of the Loan or that Tranche) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

 

	  	
as of 11.00 a.m. London time on the Quotation Day for the offering of deposits in USD and for a period comparable to the Interest Period for the Loan or that Tranche.

 

	  	
"Loan" means the total principal amount outstanding for the time being under the Facility.

 

 

  

11

 

	  	
"Majority Lenders" means:

 

	  	
(a)

 

	
if there are no amounts then outstanding, a Lender or Lenders whose Commitments aggregate more than 662⁄3% of the Total Commitments; or

 

	  	
(b)

 

	
at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 662⁄3% of the Loan.

 

	  	
"Margin" means two point sixty per cent (2.60 %) per annum.

 

	  	
"Market Value" means the fair market value of a Vessel Vessel as (i) determined by one (1) independent Approved Broker appointed by the Borrowers, or (ii) at the request of the Agent, calculated as the average of valuations of a Vessel obtained from two (2) Approved Brokers (of which one is appointed by the Borrowers and one is appointed by the Agent), in each case , with or without physical inspection of the relevant 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 a willing seller, on an "as is, where is" basis, free of any existing charter or other contract of employment and/or pool arrangement, provided however that if the higher of the two valuations is more than hundred and ten per cent (110 %) of the lower, a third valuation shall be obtained from another reputable and independent broker to be selected by the Borrowers but approved and appointed by the Agent, and the fair market value shall be the arithmetic average of the three (3) valuations.

 

	  	
"Material Adverse Effect" means any event or occurrence that in the reasonable opinion of the Lenders has or would have materially adversely affected or could materially adversely affect:

 

	  	
(a)

 

	
the business, condition (financial or otherwise), operations, performance, assets or prospects of an Obligor since the date at which its latest audited financial statements were prepared; or

 

	  	
(b)

 

	
the ability of an Obligor to perform its obligations under the Finance Documents; or

 

	  	
(c)

 

	
the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to, any Finance Document; or

 

	  	
(d)

 

	
the right or remedy of a Finance Party in respect of a Finance Document.

 

	  	
"Maturity Date" means 5 years from the first Utilisation Date, but in any event no later than 31 December 2021, or earlier in accordance with this Agreement.

 

	  	
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

	  	
(a)

 

	
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

	  	
(b)

 

	
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.

 

	  	
The above rules will only apply to the last Month of any period.

 

	  	
"Mortgages" means the cross-collateralised first priority mortgages (and deed of covenants collateral thereto (if applicable)), to be executed and recorded by the relevant Borrower against each Vessel in favour of the Lenders in the relevant Approved Ship Registry, in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

 

  

12

 

	  	
"Mortgaged Assets" means:

 

	  	
(a)

 

	
the Vessels;

 

	  	
(b)

 

	
the Earnings;

 

	  	
(c)

 

	
any Charterparty;

 

	  	
(d)

 

	
the Shares;

 

	  	
(e)

 

	
any Hedging Agreement;

 

	  	
(f)

 

	
any Intra Group Loans;

 

	  	
(g)

 

	
the Insurances; and

 

	  	
(h)

 

	
the Earnings Accounts.

 

	  	
"Obligor" means a Borrower or the Guarantor.

 

	  	
"Original Financial Statements" means the audited financial statements of the Guarantor for the financial year ended 31st December 2013.

 

	  	
"Outstanding Indebtedness" means the aggregate of all sums of money at any time and from time to time owing to the Finance Parties under or pursuant to the Finance Documents.

 

	  	
"Participating Member State" means any member state of the European Union that has adopted the EURO as its lawful currency.

 

	  	
"Party" means a party to this Agreement.

 

	  	
“Pledge of Earnings Accounts” means a pledge of the Earnings Accounts to be executed by the Borrowers in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"Pledge of Shares" means a pledge of the Shares to be executed by the Guarantor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

 

	  	
"Reference Banks" means the principal office in Platz der Republik 6, 60325 Frankfurt of DVB Bank SE, the principal office in Middelthuns gate 17, 0368 Oslo, Norway of Nordea Bank Norge ASA and the principal office in Gustav Mahleraan 10, 1082 Amsterdam, the Netherlands of ABN AMRO BANK N.V. or such other banks as may be appointed by the Agent in consultation with the Borrowers.

 

 

  

13

 

 

	  	
"Relevant Interbank Market" means the London interbank market.

 

	  	
"Repayment Date" means a date on which a repayment instalment is required to be made pursuant to Clause 6 (Repayment).

 

	  	
"Repeating Representations" means each of the representations set out in Clause 19 (Representations).

 

	  	
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

	  	
"Restricted Party" means a person:

 

	  	
(a)

 

	
that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);

 

	  	
(b)

 

	
that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws (including, without limitation, at the date of this agreement Cuba, Iran, Myanmar (Burma), North Korea, Syria and Sudan); 

 

	  	
(c)

 

	
 that is directly or indirectly owned or controlled by a person referred to in (i) and/or (ii) above; or

 

	  	
(d)

 

	
with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws; or

 

	  	
(e)

 

	
is otherwise a target of Sanctions Laws.

 

	  	
"Sanctions Authority" means the Norwegian State, the United Nations, the European Union, the member states of the European Union (including without limitation the United Kingdom), the United States of America, any country to which any Obligor or any Affiliate of any of them is bound, and any authority acting on behalf of any of them in connection with Sanctions Laws including without limitation, the Office of Foreign Assets Control of the US Department of Treasury, the United States Department of State, and Her Majesty’s Treasury.

 

	  	
"Sanctions Laws" means the economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators  implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

 

	  	
"Sanctions List" means any list of persons or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority.

 

	  	
"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers."Security" means a mortgage, charge, pledge, lien, assignment, subordination or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

	  	
"Security Document" means each document listed in Clause 17 (Security) and any other document agreement agreed between the Parties to be a Security Document.

 

 

  

14

 

	  	
"Security Period" means the period commencing on the date of this Agreement and ending the date on which the Agent notifies the Borrowers and the other Finance Parties and the Hedging Banks that:

 

	  	
(a)

 

	
all amounts which have become due for payment by the Borrowers under the Finance Documents and any Hedging Agreement have been paid;

 

	  	
(b)

 

	
no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents or any Hedging Agreement;

 

	  	
(c)

 

	
none of the Obligors have any future or contingent liability under any provision of this Agreement, the other Finance Documents or any Hedging Agreement; and

 

	  	
(d)

 

	
the Agent, the other Finance Parties or any Hedging Bank do not consider that there is a significant risk that any payment or transaction under a Finance Document or any Hedging Agreement would be set aside, or would have to be reversed or adjusted, in any present or possible future proceeding relating to a Finance Document or any Hedging Agreement or any asset covered (or previously covered) by a Security created by a Finance Document.

 

	  	
"Selection Notice" means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).

 

	  	
“Shares” means all current and future shares in the Borrowers.

 

	  	
"Shipbuilding Contracts" means the Shipbuilding contracts entered into between the Guarantor as buyer and the Yard as builder for the construction of the Vessels.

 

	  	
"SMC" means a valid safety management certificate issued for a Vessel issued by the Classification Society pursuant to paragraph 13.7 of the ISM Code.

 

	  	
"SMS" means a safety management system for a Vessel developed and implemented in accordance with the ISM Code and including the functional requirements duties and obligations that follow from the ISM Code.

 

	  	
"Subsidiary" means an entity of which a person has direct or indirect control (whether through the ownership of voting capital, by contract or otherwise) or owns directly or indirectly more than 50 % of the shares and for this purpose an entity shall be treated as controlled by another if that entity is able to direct its affairs and/or to control the composition of the board of directors or equivalent body.

 

	  	
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

	  	
"Technical Management Agreement" means any technical management agreement made between the Technical Manager and a Borrower for the technical management of a Vessel.

 

	  	
"Technical Manager" means any technical manager acceptable to the Agent (on behalf of the Finance Parties).

 

	  	
"Total Commitments" means the aggregate of the Commitments being USD 141,000,000 at the date of this Agreement.

 

  

15

 

	  	
"Total Interest Bearing Debt" means all debt and financial instruments (including financial leases) which bear interests.

 

	  	
"Total Loss" means, in relation to a Vessel:

 

	  	
(a)

 

	
the actual, constructive, compromised, agreed, arranged or other total loss of that Vessel; and

 

	  	
(b)

 

	
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 governmental or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the relevant Borrower.

 

	  	
"Total Loss Date" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

	
in the case of a constructive, compromised, agreed or arranged total loss of a Vessel, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date falling three (3) months after notice of abandonment of that Vessel was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the relevant Borrower with the relevant Vessel's insurers in which the insurers agree to treat that Vessel as a total loss; or

 

	  	
(c)

 

	
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.

 

	  	
"Tranche" means one tranche per Vessel in the amount up to the lower of (i) USD 47,000,000 and (ii) 50 % of the Market Value of the relevant Vessel at the relevant Delivery Date, and "Tranches" means all of them.

 

	  	
"Transaction Documents" means the Finance Documents, any Shipbuilding Contract, any Hedging Agreement, any Technical Management Agreement, any Commercial Management Agreement and any Charterparty, together with the other documents contemplated herein or therein.

 

	  	
"Transfer Certificate" means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrowers.

 

	  	
"Transfer Date" means, in relation to an assignment or a transfer, the later of:

 

	  	
(a)

 

	
the proposed Transfer Date specified in the relevant Transfer Certificate; and

 

	  	
(b)

 

	
the date on which the Agent executes the relevant Transfer Certificate.

 

	  	
"Unpaid Sum" means any sum due and payable but unpaid by the Borrowers and/or the Guarantor under the Finance Documents.

 

  

16

 

	  	
"US Tax Obligor" means:

 

	  	
(a)

 

	
a Borrower which is resident for tax purposes in the US; or

 

	  	
(b)

 

	
an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

 

	  	
"USD" means the lawful currency of the United States of America.

 

	  	
"Utilisation" means the utilisation of the Facility.

 

	  	
"Utilisation Date" means the date of a Utilisation, being the date on which the Loan or a Tranche is to be made.

 

	  	
"Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Requests).

 

	  	
"Value Adjusted Tangible Net Worth" means Value Adjusted Total Assets, less the value of all liabilities and intangible assets, as determined by GAAP.

 

	  	
"Value Adjusted Total Assets" means on consolidated basis, the book value of all assets (both tangible and intangible) at the relevant time, as determined by GAAP, adjusted with Excess Values.

 

	  	
"VAT" means value added tax and any other tax of a similar nature in the relevant jurisdiction.

 

	  	
"Vessels" means Hull No. 2748, Hull No. 2749 and Hull No. 2750, three (3) 299,900 dead weight ton new building VLCC Vessels to be built at the Yard for USD 92,700,000 per Vessel and to be registered in an Approved Ship Registry in the name of the relevant Borrower on the relevant Delivery Date. Delivery of the Vessels is scheduled to take place in April, July and September 2016.

 

	  	
"Working Capital" means Current Assets less Current Liabilities.

 

	  	
"Yard" means Hyundai Heavy Industries Co. Ltd., Ulsan, Korea.

 

	
1.2

 

	
Construction

 

	  	
(a)

 

	
Unless a contrary indication appears, any reference in this Agreement to:

 

	  	  	
(i)

 

	
the "Agent", the "Security Agent", any "Mandated Lead Arranger", any "Finance Party", any "Lender", the Hedging Banks, or any "Party" shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

	  	  	
(ii)

 

	
"assets" includes present and future properties, revenues and rights of every description;

 

	  	  	
(iii)

 

	
a "Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

 

	  	  	
(iv)

 

	
"indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

	  	  	
(v)

 

	
a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

  

17

 

	  	  	
(vi)

 

	
a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

 

	  	  	
(vii)

 

	
a provision of law is a reference to that provision as amended or re-enacted;

 

	  	  	
(viii)

 

	
words importing the singular shall include the plural and vice versa; and

 

	  	  	
(ix)

 

	
a time of day is a reference to Amsterdam time unless specified otherwise.

 

	  	
(b)

 

	
Section, Clause and Schedule headings are for ease of reference only.

 

	  	
(c)

 

	
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

	  	
(d)

 

	
A Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.

 

	  	
(e)

 

	
In case of conflict between this Agreement and any of the Security Documents, the provisions of this Agreement shall prevail.

 

 

  

18

 

 

 

SECTION 2

THE FACILITY

 

	
2.

 

	
THE FACILITY

 

	
2.1

 

	
The Facility

 

	  	
Subject to the terms of this Agreement, the Lenders make available to the Borrowers a USD secured term loan facility split in three (3) cross-collateralised Tranches each of the lower of (i) USD 47,000,000 per Vessel, and (ii) 50 % of the Market Value of each Vessel at the relevant Delivery Date.

 

	
2.2

 

	
Finance Parties' rights and obligations

 

	  	
(a)

 

	
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

	  	
(b)

 

	
The rights of each Finance Party or the Hedging Banks under or in connection with the Finance Documents and any Hedging Agreement are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrowers and/or the Guarantor shall be a separate and independent debt.

 

	  	
(c)

 

	
A Finance Party or the Hedging Banks may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents and any Hedging Agreement. The rights of the Hedging Banks shall be subordinated to the rights of the Finance Parties under the Finance Documents.

 

	
3.

 

	
PURPOSE

 

	
3.1

 

	
Purpose

 

	  	
Each Borrower shall apply all amounts borrowed by it under the Facility towards post-delivery debt financing of the Vessels.

 

	
3.2

 

	
Monitoring

 

	  	
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

	
4.

 

	
CONDITIONS OF UTILISATION

 

	
4.1

 

	
Initial conditions precedent

 

	  	
(a)

 

	
The Finance Parties' obligations hereunder are subject to the Agent's receipt of all of the documents and other evidence listed in Schedule 2 (Conditions precedent) Part I. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

 

	  	
(b)

 

	
The Borrowers may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Schedule 2 (Conditions precedent) Part II, except those documents which specifically will only be available on the relevant Utilisation Date or within another specified date. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

 

	
4.2

 

	
Further conditions precedent

 

	  	
The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on the date of an Utilisation Request and on the proposed Utilisation Date:

 

	  	
(a)

 

	
no Default is continuing or would result from the proposed Loan or Tranche; and

 

 

  

19

 

	  	
(b)

 

	
the Repeating Representations to be made by each of the Borrowers and the Guarantor are true in all material respects.

 

	
4.3

 

	
Maximum number of Tranches

 

	  	
The Facility may be drawn in three (3) Tranches.

 

	
4.4

 

	
Form and content

 

	  	
All documents and evidence delivered to the Agent pursuant to this Clause 4 (Conditions of Utilisation) shall:

 

	  	
(a)

 

	
be in form and substance satisfactory to the Agent;

 

	  	
(b)

 

	
if required by the Agent, be in original; and

 

	  	
(c)

 

	
if required by the Agent, be certified, notarized, legalized or attested in a manner acceptable to the Agent.

 

	
4.5

 

	
Waiver of conditions precedent

 

	  	
The conditions specified in this Clause 4 (Conditions of Utilisation) are solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Agent (acting on the instructions of all of the Lenders).

 

 

  

20

 

 

 

SECTION 3

UTILISATION

 

	
5.

 

	
UTILISATION

 

	
5.1

 

	
Delivery of a Utilisation Request

 

	  	
The Borrowers may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than 12:00 noon Amsterdam time on the date falling three (3) Business Days prior to the relevant Utilisation Date.

 

	
5.2

 

	
Completion of a Utilisation Request

 

	  	
An Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

	  	
(a)

 

	
the proposed Utilisation Date is a Business Day within the Availability Period;

 

	  	
(b)

 

	
the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

 

	  	
(c)

 

	
the proposed Interest Period complies with Clause 9 (Interest Periods).

 

	
5.3

 

	
Currency and amount

 

	  	
(a)

 

	
The currency specified in the Utilisation Request must be USD.

 

	  	
(b)

 

	
The amount of the proposed Tranche must be an amount which is not more than the Available Facility and the relevant Tranche.

 

	
5.4

 

	
Lenders' participation

 

	  	
(a)

 

	
If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan or a Tranche available by the relevant Utilisation Date through its Facility Office.

 

	  	
(b)

 

	
The amount of each Lender's participation in the Loan or a Tranche will be equal to the proportion borne by its Commitment to the Available Facility immediately prior to making the Loan or a Tranche.

 

	  	
(c)

 

	
The Agent shall notify each Lender of the amount of the Loan or a Tranche and the amount of its participation in the Loan or a Tranche upon receipt of the relevant Utilisation Notice from the Borrowers.

 

	
5.5

 

	
Cancellation of Commitment

 

	  	
The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period. Also, any part of the Commitments outstanding after the Utilisation shall be immediately cancelled.

 

 

  

21

 

 

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

 

	
6.

 

	
REPAYMENT

 

	
6.1

 

	
Repayment of Loans

 

	  	
(a)

 

	
The Borrowers shall repay each Tranche by 20 (twenty) consecutive quarterly repayment instalments commencing three (3) months after Utilisation of the relevant Tranche, each instalment in the amount of USD 691,177.00, in total USD 13,823,540.00, plus a balloon payment of USD 33,176,460.00 payable concurrently with the last instalment. Should the Utilisation of the relevant Tranche be lower than USD 47,000,000, each instalment and the balloon shall be reduced accordingly on a pro-rata basis. Should the instalments and balloon be reduced as aforesaid, the Agent shall deliver a statement to the Lenders and the Borrowers with details of the new repayment schedule.

 

	  	
(b)

 

	
Following the Utilisation or cancellation of the last Tranche the instalments of all Tranches shall be consolidated by the due date of the next instalments of any previous drawn Tranche to fall due on the next Repayment Date of the last drawn Tranche, and thereafter be repaid as one Loan in the aggregate amounts of the instalments and balloon payments of the Tranches.

 

	  	
(c)

 

	
In addition to the instalments and balloon payments described above, the Borrowers shall the first three (3) years following the first Utilisation Date make addition repayments as follows:

 

	  	  	
(i)

 

	
The Borrowers shall, based on the quarterly management accounts of the Borrowers delivered to the Agent in accordance with Clause 20.1, apply all Free Cash accrued during the relevant quarter, however limited to USD 312,500 per quarter per Vessel as repayment of the Loan.

 

	  	  	
(ii)

 

	
The Borrowers shall, based on the annual accounts (P&L and balance sheet) of the Borrowers delivered to the Agent in accordance with Clause 20.1, apply all Free Cash accrued during the relevant year, however limited USD 1,250,000 per year per Vessel, less any payments already made for that year as per Clause 6.1 (c) (i) above, as repayment of the Loan.

 

	  	  	
(iii)

 

	
Should the calculation based on the annual accounts (P&L and balance sheet) as described in Clause 6.1 (c) (ii) show that the quarterly amounts paid by the Borrowers for the relevant year in accordance with Clause 6.1 (c) (i) exceed the amounts payable under Clause 6.1 (c) (ii), the excess amount shall be deducted from any future quarterly/annual payments under Clauses 6.1 (c) (i) and (ii) (if any).

 

	  	  	
(iv)

 

	
The repayments made in accordance with this Clause 6.1 (c) shall be made on the first Repayment Date following the delivery of the relevant accounts to the Agent as per Clause 20.1 and be applied pro-rata against the Tranches, or against the Loan if consolidated as per Clause 6.1 (b) above, first against the balloon payment and then against the instalments in inverse order of maturity.

 

	  	  	
For the purpose of this Clause 6.1 (Repayment of Loans) the following definitions shall apply:

 

	  	  	
"CapEx Amount" means, in relation to any relevant accounting period, the amount estimated by the Borrowers in good faith to be the aggregate on a consolidated basis of the amounts to be payable by the Borrowers during the two next accounting periods for special surveys, intermediate surveys and regulatory requirements applicable to the Vessels.

 

 

  

22

 

	  	  	
"Change in Working Capital" means, in relation to any relevant accounting period, the difference (whether negative or positive) of (a) the amount of Working Capital as at the last day of such accounting period, minus (b) the amount of Working Capital as at the first day of such accounting period, but without taking account of any prepayment made during such accounting period pursuant to this Clause 6.1 (Repayment of Loans).

 

	  	  	
"Free Cash" means, in relation to any relevant accounting period, an amount calculated as of the last day of such accounting period equal to the positive difference, if any, between:

 

	  	  	
(i)

 

	
the sum of the Earnings of the Vessels received by the Borrowers during such accounting period; and

 

	  	  	
(ii)

 

	
the sum of the (1) Vessel Operating Expenses, (2) Voyage Expenses, (3) the CapEx Amount, (4) General & Administrative Expenses, (5) Interest Charges, and (6) Change in Working Capital.

 

	  	  	
"General & Administrative Expenses" means, in relation to any relevant accounting period, amounts paid by the Borrowers during such accounting period with respect to salaries and related expenses (including bonuses), costs related to board of director activities and director and officer indemnification insurance, travel expenses, office rent and office expenses, professional service costs such as audit and legal fees and all other expenses accounted for as such in the Borrowers' accounts for such accounting period.

 

	  	  	
"Interest Charges" means, in relation to any relevant accounting period, the aggregate of all interest and other financial costs paid by the Borrowers during such accounting period.

 

	  	  	
"Vessel Operating Expenses" means, in relation to any relevant accounting period, the aggregate  of the fair and reasonable expenses paid by the Borrowers during such accounting period, with respect to crew's wages and related costs, third party management fees, insurance costs including deductibles, docking-related expenses (not including capital expenditures), costs for lubricants, repair, class fees and maintenance costs, vetting costs, telecommunications, tonnage tax, the costs of spares and consumable stores and unrecoverable claims and all other expenses accounted for as such in the Borrowers' accounts for such accounting period.

 

	  	  	
"Voyage Expenses" means, in relation to any relevant accounting period, the aggregate (on a consolidated basis) of the expenses paid by the Borrowers during such accounting period due to a Vessel travelling to a destination, including fuel costs and port charges, security expenses, canal fees, voyage-specific insurance expenses, brokers' commissions and all other expenses accounted for as such in the in the Borrowers' accounts for such accounting period.

 

	  	  	
Any item of cost in the definitions above shall not be double counted and shall therefore only be treated as a cost in one of the definitions at any time.

 

	  	
(d)

 

	
Any Outstanding Indebtedness is due and payable on the Maturity Date.

 

	
6.2

 

	
Re-borrowing

 

	  	
No Borrower may re-borrow any part of the Facility which is repaid.

 

	
7.

 

	
PREPAYMENT AND CANCELLATION

 

	
7.1

 

	
Voluntary cancellation

 

	  	
The Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, may, if they give the Agent not less fifteen (15) days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 500,000 of the Available Facility. Any cancellation under this Clause 7.1 (Voluntary cancellation) shall reduce the Commitments of the Lenders proportionately.

 

  

23

 

	
7.2

 

	
Voluntary prepayment of Loans

 

	  	
(a)

 

	
The Borrowers may, if they give the Agent not less than fifteen (15) days' (or such shorter period as the Majority Lenders may agree) prior written notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of USD 500,000 or multiples thereof).

 

	  	
(b)

 

	
Any prepayment under this Clause 7.2 (Voluntary prepayment of Loans) shall be applied  against the Tranches, or against the Loan if consolidated as per Clause 6.1 (b) above against the instalments and/or the balloon payment as per the Borrowers' discretion.

 

	
7.3

 

	
Illegality

 

	  	
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan:

 

	  	
(a)

 

	
that Lender shall promptly notify the Agent upon becoming aware of that event;

 

	  	
(b)

 

	
upon the Agent notifying the Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, the Commitment of that Lender will be immediately cancelled; and

 

	  	
(c)

 

	
the Borrowers shall repay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the relevant Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

 

	
7.4

 

	
Total Loss or sale of a Vessel

 

	  	
If a Vessel is sold or suffers a Total Loss, the Facility shall be repaid by the higher of;

 

	  	
(a)

 

	
the amount outstanding under the Tranche relevant to such Vessel, or its pro-rata part of the Loan if consolidated as per Clause 6.1 (b) above; or

 

	  	
(b)

 

	
an amount equal to the then aggregate outstanding principal amount of the Loan multiplied by a fraction, the numerator of which is the Market Value of such Vessel subject to such sale or loss and the denominator of which is the aggregate of the Market Value of all Vessels;

 

	  	
Any prepayment under this Clause 7.4 (Total Loss or sale of a Vessel) shall (i) in case of a sale be made on or before the date on which the sale is completed by delivery of the relevant Vessel to the buyer, or (ii)  in the case of a Total Loss, on the earlier of the date falling ninety (90) days after the Total Loss Date and the receipt by the Agent of the proceeds of Insurance relating to such Total Loss (or in the event of a requisition for title of the relevant Vessel, immediately after the occurrence of such requisition of title), and be applied as full repayment of the relevant Tranche and any excess payment be applied pro-rata against the remaining Tranches, or against the Loan if consolidated as per Clause 6.1 (b) above pro rata against the balloon payment and the instalments.

 

	
7.5

 

	
Market Value

 

	  	
(a)

 

	
If the Market Value of the Vessels are less than 135 % of the Loan the Borrowers shall, unless otherwise agreed with the Agent (on behalf of the Lenders) within fifteen (15) Business Days, either

 

	  	  	
(i)

 

	
prepay the Loan or a part of the Loan (as the case may be) required to restore the aforesaid ratio; or

 

 

  

24

 

	  	  	
(ii)

 

	
if consented to by the Agent (on behalf of the Lenders) provide the Lenders with such additional security, in form and substance satisfactory to the Lenders.

 

	  	
(b)

 

	
Any prepayment under this Clause 7.5 (Market Value) shall be applied pro-rata against the Tranches, or against the Loan if consolidated as per Clause 6.1 (b) above, first against the balloon payment and then against the instalments in inverse order of maturity.

 

	
7.6

 

	
Change of Control

 

	  	
If a Change of Control occurs, the Borrowers shall within ten (10) Business Days prepay the Loan in full.

 

	
7.7

 

	
Right of replacement or repayment and cancellation in relation to a single Lender

 

	  	
(a)

 

	
If:

 

	  	  	
(i)

 

	
any sum payable to any Lender by the Borrowers and/or the Guarantor is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up);

 

	  	  	
(ii)

 

	
any Lender claims indemnification from the Borrowers under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs); or

 

	  	  	
(iii)

 

	
at any time on or after the date which is six (6) months before the earliest FATCA Application Date for any payment by a Party to a Lender (or to the Agent for the account of that Lender), that Lender is not, or has ceased to be, a FATCA Exempt Party and, as a consequence, a Party will be required to make a FATCA Deduction from a payment to that Lender (or to the Agent for the account of that Lender) on or after that FATCA Application Date,

 

	  	  	
the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification or FATCA Deduction continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loan or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.

 

	  	
(b)

 

	
On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

 

	  	
(c)

 

	
On the last day of each Interest Period which ends after the Borrowers have given notice of cancellation under paragraph (a) above (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in the Loan.

 

	  	
(d)

 

	
The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions:

 

	  	  	
(i)

 

	
the Borrowers shall have no right to replace the Agent;

 

	  	  	
(ii)

 

	
neither the Agent nor any Lender shall have any obligation to find a replacement Lender; and

 

	  	  	
(iii)

 

	
in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

 

 

  

25

 

 

	
7.8

 

	
Restrictions

 

	  	
(a)

 

	
Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

	  	
(b)

 

	
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

 

	  	
(c)

 

	
The Borrowers may not re-borrow any part of the Facility which is prepaid.

 

	  	
(d)

 

	
The Borrowers shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

	  	
(e)

 

	
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

	  	
(f)

 

	
If the Agent receives a notice under this Clause 7 (Prepayment and cancellation) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.

 

	  	
(g)

 

	
If all or part of the Loan is repaid or prepaid and is not available for redrawing, an amount of the Commitments (equal to the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this paragraph (g) shall reduce the Commitments of the Lenders proportionately.

 

 

  

26

 

SECTION 5

COSTS OF UTILISATION

 

	
8.

 

	
INTEREST

 

	
8.1

 

	
Calculation of interest

 

	  	
(a)

 

	
The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

 

	  	  	
(i)

 

	
Margin; and

 

	  	  	
(ii)

 

	
LIBOR.

 

	  	
(b)

 

	
It is not possible to calculate the effective interest rate on the Loan in advance. The Lenders are nevertheless, according to the FA Act obliged to give a representative example. LIBOR for 3 (three) months was at 13 June 2014 0.2321 % p.a. and provided unaltered LIBOR and Margin for the duration of the Loan, fees agreed hereunder and Utilisation of the Total Commitments in full on 1 April 2016, the effective interest rate will be 3.263 % p.a.

 

	  	
(c)

 

	
Interest shall be calculated on the actual number of days elapsed on the basis of a three hundred and sixty (360) day year.

 

	
8.2

 

	
Payment of interest

 

	  	
The Borrowers shall pay accrued interest on the Loan on each Interest Payment Date.

 

	
8.3

 

	
Default interest

 

	  	
(a)

 

	
If any Borrower or Guarantor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two (2) per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably) above the Margin. Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Borrowers and/or the Guarantor on demand by the Agent.

 

	  	
(b)

 

	
If any overdue amount consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:

 

	  	  	
(i)

 

	
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

 

	  	  	
(ii)

 

	
the rate of interest applying to the overdue amount during that first Interest Period shall be two (2) per cent higher than the rate which would have applied if the overdue amount had not become due.

 

	  	
(c)

 

	
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

 

	
8.4

 

	
Notification of rates of interest

 

	  	
The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.

 

 

  

27

 

	
9.

 

	
INTEREST PERIODS

 

	
9.1

 

	
Selection of Interest Periods

 

	  	
(a)

 

	
The Borrowers may select an Interest Period for a Tranche in the Utilisation Request for that Tranche or (if the Loan has already been borrowed) in a Selection Notice.

 

	  	
(b)

 

	
Each Selection Notice for the Loan or a Drawing is irrevocable and must be delivered to the Agent by the Borrowers not later than the 12:00 noon Amsterdam time on the date falling three (3) Business Days prior to the last day of the current Interest Period.

 

	  	
(c)

 

	
If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will be three (3) Months.

 

	  	
(d)

 

	
The Borrowers may select an Interest Period of three (3), six (6), nine (9) or twelve (12) Months or any such longer periods as the Agent may agree.

 

	  	
(e)

 

	
An Interest Period for the Loan or a Tranche shall not extend beyond the Maturity Date.

 

	  	
(f)

 

	
Each Interest Period for the Loan or a Tranche shall start on the relevant Utilisation Date or (if already made) on the last day of its preceding Interest Period.

 

	  	
(g)

 

	
Following the Utilisation or cancellation of the last Tranche the Interest Periods of all Tranches shall be consolidated by the duration of the current Interest Periods of any previous drawn Tranches being shortened or extended to have such duration as to expire on the same date as the current running Interest Period of the last drawn Tranche, where after the Tranches shall be consolidated and treated as one loan as regards Interest Periods.

 

	  	
(h)

 

	
Once selected the Interest Period may not be changed by the Borrowers at any time during the term of the Facility.

 

	  	  
	
9.2

 

	
Non-Business Days

 

	  	
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

	
10.

 

	
CHANGES TO THE CALCULATION OF INTEREST

 

	
10.1

 

	
Absence of quotations

 

	  	
Subject to Clause 10.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 a.m. Amsterdam time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

 

	
10.2

 

	
Market disruption

 

	  	
(a)

 

	
If a Market Disruption Event occurs in relation to the Loan or a Tranche for any Interest Period, then the rate of interest on each Lender's share of the Loan or a Tranche for the Interest Period shall be the percentage rate per annum which is the sum of:

 

	  	  	
(i)

 

	
the Margin; and

 

	  	  	
(ii)

 

	
the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan or a Tranche from whatever source it may reasonably select.

 

  

28

 

 

	  	
(b)

 

	
In this Agreement "Market Disruption Event" means:

 

	  	  	
(i)

 

	
at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for USD for the relevant Interest Period; or

 

	  	  	
(ii)

 

	
before close of business in Amsterdam on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan or a Tranche exceed twenty five per cent (25 %) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR; or

 

	  	  	
(iii)

 

	
at least one (1) Business Day before the start of an Interest Period, the Agent receives notification from any Lender that for any reason it is unable to obtain USD in the Relevant Interbank Market in order to fund its participation in the Loan or any Tranche.

 

	
10.3

 

	
Alternative basis of interest or funding

 

	  	
(a)

 

	
If a Market Disruption Event occurs and the Agent or the Borrowers so requires, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty (30) days with a view to agreeing a substitute basis for determining the rate of interest.

 

	  	
(b)

 

	
Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

 

	  	
(c)

 

	
Should no agreement be reached, the rate calculated by the Agent in accordance with Clause 10.2 (Market disruption) shall apply.

 

	
10.4

 

	
Break Costs

 

	  	
(a)

 

	
Each Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or a Tranche or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for the Loan or a Tranche or Unpaid Sum.

 

	  	
(b)

 

	
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

 

	
11.

 

	
FEES

 

	
11.1

 

	
Commitment fee

 

	  	
(a)

 

	
The Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, shall pay to the Agent (for the account of each Lender) a fee computed at the rate of forty per cent (40 %) of the Margin per annum and calculated on the undrawn portion of the Facility from the date of this Agreement.

 

	  	
(b)

 

	
The accrued commitment fee is payable on the earlier of (i) each Utilisation Date and (ii) the last day of each successive period of three (3) Months after the date of this Agreement and, if cancelled in full, on the time the cancellation is effective.

 

	
11.2

 

	
Arrangement fee

 

	  	
The Guarantor shall upon signing of this Agreement pay to the Agent for further distribution to the Lenders a non-refundable arrangement fee of one point twenty five per cent (1.25 %) of the Facility in the amount of USD 1,762,500.

 

 

  

29

 

	
11.3

 

	
Agency fee

 

	  	
The Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, shall upon signing of this Agreement pay to the Agent an Agency Fee as per the Fee Letter.

 

 

  

30

 

 

 

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

 

	
12.

 

	
TAX GROSS UP AND INDEMNITIES

 

	
12.1

 

	
Definitions

 

	  	
(a)

 

	
In this Agreement:

 

	  	  	
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

 

	  	  	
"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

 

	
12.2

 

	
Tax gross-up

 

	  	
(a)

 

	
All payments under the Facility shall be made free and clear of all present and future taxes, levies or duties of any nature whatsoever, levied either now or at any future time.

 

	  	
(b)

 

	
Each Obligor shall make all payments to be made by it without any Tax Deduction whatsoever, unless a Tax Deduction is required by law.

 

	  	
(c)

 

	
The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and the Guarantor.

 

	  	
(d)

 

	
If a Tax Deduction is required by law to be made by the Borrowers and/or the Guarantor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

	  	
(e)

 

	
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

	  	
(f)

 

	
Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

	
12.3

 

	
Tax indemnity

 

	  	
(a)

 

	
The Obligors shall (within three (3) Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

 

 

  

31

 

 

	  	
(b)

 

	
Paragraph (a) above shall not apply:

 

	  	  	
(i)

 

	
with respect to any Tax assessed on a Finance Party:

 

	  	  	  	
(A)

 

	
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

 

	  	  	  	
(B)

 

	
under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

 

	  	  	 	
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

 

	  	  	
(ii)

 

	
to the extent a loss, liability or cost:

 

	  	  	  	
(A)

 

	
is compensated for by an increased payment under Clause 12.2 (Tax gross-up), Clause 12.7 (FATCA Deduction and gross-up by Obligor) or paragraph (b) of Clause 12.8 (FATCA Deduction by Finance Party);

 

	  	  	  	
(B)

 

	
would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up); or

 

	  	  	  	
(C)

 

	
is compensated for by a payment under paragraph (d) of Clause 12.8 (FATCA Deduction by Finance Party).

 

	  	
(c)

 

	
A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers.

 

	  	
(d)

 

	
A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 (Tax indemnity), notify the Agent.

 

	
12.4

 

	
Stamp taxes

 

	  	
The Borrowers shall pay and, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

 

	
12.5

 

	
VAT

 

	  	
(a)

 

	
All amounts set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).

 

	  	
(b)

 

	
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

 

 

  

32

 

 

 

	
12.6

 

	
FATCA Information

 

	  	
(a)

 

	
Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:

 

	  	  	
(i)

 

	
confirm to that other Party whether it is:

 

	  	  	  	
(A)

 

	
a FATCA Exempt Party; or

 

	  	  	  	
(B)

 

	
not a FATCA Exempt Party; and

 

	  	 	(ii)	
supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

  

	  	
(b)

 

	
If a Party confirms to another Party pursuant to 12.6 (a) (i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

 

	  	
(c)

 

	
Paragraph (a) above shall not oblige any Finance Party to do anything which would or might in its reasonable opinion constitute a breach of:

 

	  	  	
(i)

 

	
any law or regulation;

 

	  	  	
(ii)

 

	
any fiduciary duty; or

 

	  	  	
(iii)

 

	
any duty of confidentiality.

 

	  	
(d)

 

	
If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then:

 

	  	  	
(i)

 

	
if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

 

	  	  	
(ii)

 

	
if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

 

	  	  	
until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

	
12.7

 

	
FATCA Deduction and gross-up by Obligor

 

	  	
(a)

 

	
If an Obligor is required to make a FATCA Deduction, that Obligor shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

 

	  	
(b)

 

	
If a FATCA Deduction is required to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

 

 

 

  

33

 

 

 

	  	
(c)

 

	
An Obligor shall promptly upon becoming aware that an Obligor must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Agent accordingly. Similarly, a Finance Party shall notify the Agent on becoming so aware in respect of a payment payable to that Finance Party. If the Agent receives such notification from a Finance Party it shall notify the Obligors.

 

	  	
(d)

 

	
Within thirty (30) days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Obligor making that FATCA Deduction or payment shall deliver to the Agent (on behalf of the Finance Party entitled to the payment) evidence reasonably satisfactory to that Finance Party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.

 

	
12.8

 

	
FATCA Deduction by a Finance Party

 

	  	
(a)

 

	
Each Finance Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Finance Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. A Finance Party which becomes aware that it must make a FATCA Deduction in respect of a payment to another Party (or that there is any change in the rate or the basis of such FATCA Deduction) shall notify that Party and the Agent.

 

	  	
(b)

 

	
If the Agent is required to make a FATCA Deduction in respect of a payment to a Finance Party under Clause 30.2 (Distributions by the Agent) which relates to a payment by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after the Agent has made such FATCA Deduction), leaves the Agent with an amount equal to the payment which would have been made by the Agent if no FATCA Deduction had been required.

 

	  	
(c)

 

	
The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Finance Party under Clause 30.2 (Distributions by the Agent) which relates to a payment by an Obligor (or that there is any change in the rate or the basis of such a FATCA Deduction) notify the relevant Obligor and the relevant Finance Party.

 

	  	
(d)

 

	
The relevant Obligor shall (within three (3) Business Days of demand by the Agent) pay to a Finance Party an amount equal to the loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly) suffered by that Finance Party as a result of another Finance Party making a FATCA Deduction in respect of a payment due to it under a Finance Document. This paragraph shall not apply to the extent a loss, liability or cost is compensated for by an increased payment under paragraph (b) above.

 

	  	
(e)

 

	
A Finance Party making, or intending to make, a claim under paragraph (d) above shall promptly notify the Agent of the FATCA Deduction which will give, or has given, rise to the claim, following which the Agent shall notify the Obligors.

 

	
12.9

 

	
Tax Credit and FATCA

 

	  	
If an Obligor makes a FATCA Payment and the relevant Finance Party determines that:

 

	  	
(a)

 

	
a Tax Credit is attributable to an increased payment of which that FATCA Payment forms part, to that FATCA Payment or to a FATCA Deduction in consequence of which that FATCA Payment was required; and

 

 

 

  

34

 

 

 

	  	
(b)

 

	
that Finance Party has obtained, utilised and retained that Tax Credit,

 

	  	
the Finance Party shall pay an amount to that Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the FATCA Payment not been required to be made by that Obligor.

 

 

 

	
13.

 

	
INCREASED COSTS

 

	
13.1

 

	
Increased costs

 

	  	
(a)

 

	
Subject to Clause 13.3 (Exceptions) the Borrowers shall, within three (3) Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.

 

	  	
(b)

 

	
In this Agreement "Increased Costs" means:

 

	  	  	
(i)

 

	
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

 

	  	  	
(ii)

 

	
an additional or increased cost; or

 

	  	  	
(iii)

 

	
a reduction of any amount due and payable under any Finance Document,

 

	  	  	
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

 

	
13.2

 

	
Increased cost claims

 

	  	
(a)

 

	
A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.

 

	  	
(b)

 

	
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

 

	
13.3

 

	
Exceptions

 

	  	
(a)

 

	
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

 

	  	  	
(i)

 

	
attributable to a Tax Deduction required by law to be made by the Borrowers and/or the Guarantor

 

	  	  	
(ii)

 

	
attributable to a FATCA Deduction required to be made by an Obligor or a Finance Party;

 

	  	  	
(iii)

 

	
compensated for by paragraph (d) of Clause 12.8 (FATCA Deduction by a Finance Party);

 

	  	  	
(iv)

 

	
compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);

 

 

 

  

35

 

 

 

	  	  	
(v)

 

	
compensated for by any payment made pursuant to Clause 14.4 (Mandatory Cost); or

 

	  	  	
(vi)

 

	
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or

 

	  	  	
(vii)

 

	
attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Lender or any of its Affiliates)

 

	  	
(b)

 

	
In this Clause 13.3 (Exceptions),

 

	  	  	
(i)

 

	
a reference to a "Tax Deduction" has the same meaning given to the term in Clause 12.1 (Definitions); and

 

	  	  	
(ii)

 

	
“Basel III" means the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III:  A global regulatory framework for more resilient banks and banking systems", "Basel III:  International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated, and any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III”.

 

 

 

	
14.

 

	
OTHER INDEMNITIES

 

	
14.1

 

	
Currency indemnity

 

	  	
(a)

 

	
If any sum due from the Obligors 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 that Sum is payable into another currency (the "Second Currency") for the purpose of:

 

	  	  	
(i)

 

	
making or filing a claim or proof against that Obligor;

 

	  	  	
(ii)

 

	
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

	  	  	
that Obligor shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party 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 that person at the time of its receipt of that Sum.

 

	  	
(b)

 

	
Each Obigor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

 

 

  

36

 

 

 

	
14.2

 

	
Other indemnities

 

	  	
The Obligors shall, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party in any jurisdiction (including but not limited to any cost, loss or liability incurred by any of the Finance Parties arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions Laws) as a result of:

 

	  	
(a)

 

	
the occurrence of any Event of Default;

 

	  	
(b)

 

	
a failure by the Borrowers and/or the Guarantor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 29 (Sharing among the Finance Parties);

 

	  	
(c)

 

	
funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in the Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement;

 

	  	
(d)

 

	
a third party claim related to the Finance Documents, the Obligors or the Vessels, hereunder any Environmental Claims or any non-compliance by any Obligor, the Technical Manager, the Commercial Manager and/or any Charterer with applicable laws including Sanctions Laws;

 

	  	
(e)

 

	
any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred by the Agent or any other Finance Party as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions Laws; or

 

	  	
(f)

 

	
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.,

 

	  	  	
in each case other than by reason of default or negligence by that Finance Party alone.

 

	
14.3

 

	
Indemnity to the Agent

 

	  	
The Obligors shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

 

	  	
(a)

 

	
investigating any event which it reasonably believes is a Default; or

 

	  	
(b)

 

	
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

 

	
14.4

 

	
Mandatory Cost

 

	  	
The Borrowers shall, on demand by the Agent, pay to the Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Agent to be its good faith determination of the amount necessary to compensate it for complying with:

 

	  	
(a)

 

	
in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and

 

	  	
(b)

 

	
in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),

 

 

 

  

37

 

 

 

	  	
which, in each case, is referable to that Lender's participation in the Loan.

 

	
15.

 

	
MITIGATION BY THE LENDERS

 

	
15.1

 

	
Mitigation

 

	  	
(a)

 

	
Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.3 (Illegality), Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

	  	
(b)

 

	
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

	
15.2

 

	
Limitation of liability

 

	  	
(a)

 

	
The Borrowers shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

 

	  	
(b)

 

	
A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

 

	
16.

 

	
COSTS AND EXPENSES

 

	
16.1

 

	
Transaction expenses

 

	  	
The Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, shall promptly on demand pay the Agent, the Finance Parties and the Hedging Banks the amount of all costs and third party expenses (including legal fees, travel expenses and out of pocket expenses) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:

 

	  	
(a)

 

	
this Agreement and any other documents referred to in this Agreement; and

 

	  	
(b)

 

	
any other Finance Documents executed after the date of this Agreement.

 

	
16.2

 

	
Amendment and enforcement costs

 

	  	
The Borrowers shall, within three (3) Business Days of demand, reimburse the Agent and any Finance Party or Hedging Bank for the amount of all duly documented costs and expenses (including but not limited to legal fees and other professional fees) incurred by the Agent and any such Finance Party or Hedging Bank in connection with:

 

	  	
(a)

 

	
responding to, evaluating, negotiating or complying with a request or requirement for any amendment, waiver or consent;

 

	  	
(b)

 

	
the granting of any release, waiver or consent under the Finance Documents;

 

	  	
(c)

 

	
any amendment or variation of a Finance Document; and

 

 

 

  

38

 

 

 

	  	
(d)

 

	
the enforcement of, or the preservation, protection or maintenance of, or attempt to preserve or enforce, any of the rights of the Finance Parties under the Finance Documents.

 

	  	
For the avoidance of doubt, costs payable by the Borrowers under Clause 16.1 (Transaction Expenses) and this Clause 16.2 (Amendment and enforcement costs) remain payable whether or not any Utilisation is ever made.

 

 

  

39

 

 

 

SECTION 7

SECURITY

 

	
17.

 

	
SECURITY

 

	
17.1

 

	
Security

 

	  	
The obligations and liabilities of the Borrowers and the Guarantor under the Finance Documents and any Hedging Agreement, whether present and future, actual or contingent, whether as primary obligor or as guarantor, including (without limitation) the Borrowers’ obligation to repay the Loan together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrowers towards the Finance Parties or the Hedging Banks in connection with this Agreement or any Hedging Agreement, shall at any time until all amounts due to the Finance Parties or the Hedging Banks under any Finance Document and any Hedging Agreement have been paid and/or repaid in full, be secured on a cross-collateralized basis by the following security:

 

	  	
(a)

 

	
the Mortgages;

 

	  	
(b)

 

	
the Guarantee;

 

	  	
(c)

 

	
the Assignment Agreement;

 

	  	
(d)

 

	
the Pledge of Earnings Accounts;

 

	  	
(e)

 

	
any Intra Group Loans Assignment Agreement;

 

	  	
(f)

 

	
any Deed of Assignment; and

 

	  	
(g)

 

	
the Pledge of Shares, including customary power of attorney for sale of the Shares and signed but undated letters of resignation from each director.

 

	  	
and any other document that may have been or shall from time to time hereafter be executed as Security for the Borrowers’ obligations under or pursuant to the Finance Documents and any Hedging Agreement.

 

	  	
The Security Documents shall rank with first priority, save for the Pledge of Earnings Accounts which will rank after a general first ranking right of pledge in favour of the Account Bank subject to the Account Bank's general banking conditions, and shall include any obligations under the Finance Documents and any Hedging Agreement, always subject to the provision of Clause 30.5 (Partial Payments).

 

 

 

  

40

 

 

 

	
17.2

 

	
Perfection etc.

 

	  	
The Borrowers undertake to ensure that the Security Documents are duly executed by the parties thereto in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) and/or the Lenders (as the case may be) in accordance with Clause 4 (Conditions of Utilisation), legally valid and in full force and effect, and to execute or procure the execution of such further documentation as the Security Agent may reasonable require in order for the relevant Finance Parties and the Hedging Banks, to maintain the security position envisaged hereunder.

 

	
17.3

 

	
Further assignment of Earnings and Charterparty and Shareholders Loans

 

	  	
In the event that any of the Borrowers enters into any Charterparty, the relevant Borrower shall prior to the relevant commencement date do its best endeavours to assign by way of a Deed of Assignment such Charterparty and any Earnings accruing thereunder in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	  	
In the event that any of the Obligors enter into any Intra Group Loans, the relevant Obligor shall prior to the relevant commencement date assign by way of an Intra Group Loans Assignment Agreement such claims the relevant Obligor may have thereunder in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	
17.4

 

	
Security - Hedging Agreement

 

	  	
The Borrowers’ obligations and liabilities under any Hedging Agreement, whether present and future, actual or contingent, whether as primary obligor or as guarantor, together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrowers towards a Hedging Bank in connection with any Hedging Agreement, shall at any time until all amounts due to a Hedging Bank under any Hedging Agreement have been paid and/or repaid in full, be secured by the Security Documents and the guarantee liabilities of the Guarantor pursuant to Clause 18 (Guarantee, indemnity and joint and several liability), however on subordinated basis to the rights of the other Finance Parties.

 

	
17.5

 

	
Parallel Debt

 

	
 

  

	
(a)

 

	
In this Clause:

 

	  	  	
(i)

 

	
Corresponding Debt means any amount which an Obligor owes to a Finance Party under or in connection with the Finance Documents and the Hedging Banks under or in connection with the Hedging Agreement.

 

	  	  	
(ii)

 

	
Parallel Debt means any amount which an Obligor owes to the Security Agent under this Clause.

 

	  	
(b)

 

	
Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent as creditor in its own right and not as representative of the other Finance Parties or the Hedging Banks amounts equal to, and in the currency or currencies of, its Corresponding Debt.

 

	  	
(c)

 

	
The Parallel Debt of each Obligor:

 

	  	  	
(i)

 

	
shall become due and payable at the same time as its Corresponding Debt;

 

	  	  	
(ii)

 

	
is independent and separate from, and without prejudice to, its Corresponding Debt.

 

	  	
(d)

 

	
For purposes of this Clause, the Security Agent:

 

	  	  	
(i)

 

	
is the independent and separate creditor of each Parallel Debt;

 

 

 

  

41

 

 

 

	  	  	
(ii)

 

	
acts in its own name and not as agent, representative or trustee of the Finance Parties or the Hedging Banks and its claims in respect of each Parallel Debt shall not be held on trust; and

 

	  	  	
(iii)

 

	
shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

 

	  	
(e)

 

	
The Parallel Debt of an Obligor shall be (a) decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged, and (b) increased to the extent to that its Corresponding Debt has increased, and the Corresponding Debt of an Obligor shall be (x) decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged, and (y) increased to the extent that its Parallel Debt has increased, in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.

 

	  	
(f)

 

	
All amounts received or recovered by the Security Agent in connection with this Clause, to the extent permitted by applicable law, shall be applied in accordance with Clause 30.5 (Partial payments).

 

	
18.

 

	
GUARANTEE, INDEMNITY AND JOINT AND SEVERAL LIABILITY

 

	
18.1

 

	
Guarantee and indemnity

 

	  	
The Guarantor irrevocably and unconditionally:

 

	  	
(a)

 

	
guarantees to each Finance Party and the Hedging Banks punctual performance by the Borrowers of all the Borrowers’ obligations under the Finance Documents and any Hedging Agreement.

 

	  	
(b)

 

	
undertakes with each Finance Party and the Hedging Banks that whenever the Borrowers do not pay any amount when due under or in connection with any Finance Document and any Hedging Agreement, it shall immediately on demand pay that amount as if it was the principal obligor; and

 

	  	
(c)

 

	
agrees with each Finance Party and the Hedging Banks that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party or Hedging Banks immediately on demand against any cost, loss or liability it incurs as a result of the Borrowers not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document and any Hedging Agreement on the date when it would have been due. The amount payable by the relevant Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 (Guarantee, indemnity and joint and several liability) if the amount claimed had been recoverable on the basis of a guarantee;

 

	  	
provided, however, that the maximum guarantee liability of the Guarantor hereunder shall always be limited to USD 153,000,000 plus (i) any interest, default interest, Break Cost or other costs, fees and expenses related to the Borrowers’ obligations under the Finance Documents and any Hedging Agreement and (ii) any default interest or other costs, fees and expenses related to the liability of the relevant Guarantor hereunder.

 

 

 

  

42

 

 

 

	
18.2

 

	
Continuing guarantee

 

	  	
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents and any Hedging Agreement, regardless of any intermediate payment or discharge in whole or in part.

 

	
18.3

 

	
Reinstatement

 

	  	
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party or the Hedging Banks in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 18 (Guarantee, indemnity and joint and several liability) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

	
18.4

 

	
Joint and several liability of the Borrowers

 

	  	
Notwithstanding anything to the contrary herein contained, each Borrower shall be and remain jointly and severally liable with the other Borrowers for (i) the payment of each and every sum from time to time due from the Borrowers, (ii) each and every obligation undertaken and (iii) each and every liability incurred on the part of the Borrowers under or pursuant to the Finance Documents.

 

	  	
If at any time a Borrower has paid to the Lenders or the Lenders have recovered from such Borrower a sum which was due from the Borrowers under or pursuant to the Finance Documents and such sum is higher than the amount such Borrower was obliged to contribute in its relation (if any) with the other Borrowers, then such Borrower shall not have the benefit of any right of subrogation and shall not exercise any right of recourse or claim any set-off or counterclaim against the other Borrowers or prove otherwise in competition with the Finance Parties (all such rights being hereby irrevocably waived by each Borrower) unless and until the Loan has been paid and discharged in full.

 

	
18.5

 

	
Waiver of defences

 

	  	
The obligations of the Guarantor under this Clause 18 (Guarantee, indemnity and joint and several liability), and the joint and several obligations and liability of the Borrowers under this Agreement and the other Finance Documents and any Hedging Agreement, will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18 (Guarantee, indemnity and joint and several liability) (without limitation and whether or not known to it or any Finance Party or the Hedging Banks) including:

 

	  	
(a)

 

	
any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

	  	
(b)

 

	
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of the Obligor;

 

	  	
(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, any Obligor 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 an Obligor or any other person;

 

	  	
(e)

 

	
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any Hedging Agreement or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document, any Hedging Agreement or other document or security;

 

 

 

  

43

 

 

 

	  	
(f)

 

	
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Hedging Agreement or any other document or security; or

 

	  	
(g)

 

	
any insolvency or similar proceedings.

 

	
18.6

 

	
Immediate recourse

 

	  	
Each of the Borrowers and the Guarantor waives any right it may have of first requiring any Finance Party or the Hedging Banks (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Borrowers or the Guarantor under this Clause 18 (Guarantee, indemnity and joint and several liability). This waiver applies irrespective of any law or any provision of a Finance Document and any Hedging Agreement to the contrary.

 

	
18.7

 

	
Appropriations

 

	  	
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents and any Hedging Agreement have been irrevocably paid in full, each Finance Party and the Hedging Banks (or any trustee or agent on its behalf) may:

 

	  	
(a)

 

	
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party or Hedging Banks (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Borrowers and the Guarantor shall not be entitled to the benefit of the same; and

 

	  	
(b)

 

	
hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 18 (Guarantee, indemnity and joint and several liability).

 

	
18.8

 

	
Deferral of the Borrowers’ and the Guarantor's rights

 

	  	
Until all amounts which may be or become payable by the Borrowers or the Guarantor under or in connection with the Finance Documents and any Hedging Agreement have been irrevocably paid in full and unless the Agent otherwise directs, the Borrowers and the Guarantor will not exercise any rights which they may have by reason of performance by them of their obligations under the Finance Documents and any Hedging Agreement or by reason of any amount being payable, or liability arising, under this Clause 18 (Guarantee, indemnity and joint and several liability):

 

	  	
(a)

 

	
to be indemnified by another Obligor;

 

	  	
(b)

 

	
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents or any Hedging Agreement;

 

	  	
(c)

 

	
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties or the Hedging Banks under the Finance Documents and any Hedging Agreement or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents and any Hedging Agreement by any Finance Party or the Hedging Banks;

 

	  	
(d)

 

	
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 18.1 (Guarantee and indemnity);

 

	  	
(e)

 

	
to exercise any right of set-off against any other Obligor; and/or

 

 

 

  

44

 

 

 

	  	
(f)

 

	
to claim or prove as a creditor of any other Obligor in competition with any Finance Party or the Hedging Banks.

 

	  	
If  any Borrower or any Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties and the Hedging Banks by the Obligors under or in connection with the Finance Documents and any Hedging Agreement to be repaid in full on trust for the Finance Parties and the Hedging Banks and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 30 (Payment mechanics).

 

	
18.9

 

	
Additional security

 

	  	
The guarantee given by the Guarantor herein is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party or the Hedging Banks.

 

	
18.10

 

	
Norwegian Financial Agreements Act

 

	  	
The Guarantor and each Borrower, to the extent it is to be considered a guarantor for the obligations of the other Borrowers pursuant to the FA Act, specifically waives all rights under the provisions of the FA Act not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as indicated in the brackets):

 

	  	
(a)

 

	
§ 29 (as the Agent and/or any Finance Party and/or the Hedging Banks shall be entitled to exercise all its rights under this Agreement and applicable law in order to secure payment. Such rights shall include the right to set-off any credit balance in any currency, on any bank account the Guarantor might have with each of the Finance Parties or the Hedging Banks individually against the amount due);

 

	  	
(b)

 

	
§ 63 (1) – (2) (to be notified of an Event of Default hereunder and to be kept informed thereof);

 

	  	
(c)

 

	
§ 63 (3) (to be notified of any extension granted to the Borrowers in payment of principal and/or interest);

 

	  	
(d)

 

	
§ 63 (4) (to be notified of another Obligor’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter);

 

	  	
(e)

 

	
§ 65 (3) (that its consent is required for it to be bound by amendments to the Finance Documents or any Hedging Agreement that may be detrimental to its interest);

 

	  	
(f)

 

	
§ 67 (2) (about any reduction of its liabilities hereunder, since no such reduction shall apply as long as any amount is outstanding under the Finance Documents and any Hedging Agreement);

 

	  	
(g)

 

	
§ 67 (4) (that its liabilities hereunder shall lapse after ten (10) years, as it shall remain liable hereunder as long as any amount is outstanding under any of the Finance Documents and any Hedging Agreement);

 

	  	
(h)

 

	
§ 70 (as it shall not have any right of subrogation into the rights of the Finance Parties and the Hedging Banks under the Finance Documents and any Hedging Agreement until and unless the Finance Parties and the Hedging Banks shall have received all amounts due or to become due to them under the Finance Documents and any Hedging Agreement);

 

 

 

  

45

 

 

 

	  	
(i)

 

	
§ 71 (as the Finance Parties and the Hedging Banks shall have no liability first to make demand upon or seek to enforce remedies against any other Obligor or any other Security Interest provided in respect of the Borrowers’ liabilities under the Finance Documents and any Hedging Agreement before demanding payment under or seeking to enforce its guarantee obligations hereunder);

 

	  	
(j)

 

	
§ 72 (as all interest and default interest due under any of the Finance Documents and any Hedging Agreement shall be secured by its obligations hereunder);

 

	  	
(k)

 

	
§ 73 (1) – (2) (as all costs and expenses related to a termination event or an Event of Default under this Agreement shall be secured by its guarantee obligations hereunder); and

 

	  	
(l)

 

	
§ 74 (1) – (2) (as it shall not make any claim against the other Obligors for payment by reason of performance by it of its obligations under the Finance Documents and any Hedging Agreement until and unless the Finance Parties and the Hedging Banks first shall have received all amounts due or to become due to them under the Finance Documents and any Hedging Agreement).

 

	
18.11

 

	
Guarantee Limitations

 

	  	
The guarantee and liability set out in this Clause 18 (Guarantee, indemnity and joint and several liability) does not apply to any liability if and to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of applicable provisions under the laws of the relevant jurisdiction of the Obligors.

 

  

46

 

SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

	
19.

 

	
REPRESENTATIONS

 

	  	
Each of the Borrowers and the Guarantor makes the representations and warranties set out in this Clause 19 (Representations) to each Finance Party on the date of this Agreement, provided however that the representations and warranties set out in this Clause 19 (Representations) will not apply for the Borrowers until the date of the execution of the relevant Accession Letter.

 

	
19.1

 

	
Status

 

	  	
(a)

 

	
Each Obligor is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

 

	  	
(b)

 

	
Each Obligor and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

 

	  	
(c)

 

	
No Obligor is a FATCA FFI or a US Tax Obligor.

 

	
19.2

 

	
Binding obligations

 

	  	
(a)

 

	
The obligations expressed to be assumed by the relevant Obligor in each Finance Document are, subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation), legal, valid, binding and enforceable obligations.

 

	  	
(b)

 

	
Save as provided herein or therein and/or as have been or shall be completed prior to the relevant Utilisation Date, no registration, filing, payment of tax or fees or other formalities are necessary or desired to render the Finance Documents enforceable against the Obligors, and in respect of the Vessels, for the Mortgages to constitute valid and enforceable first priority mortgage over the Vessels.

 

	
19.3

 

	
Non-conflict with other obligations

 

	  	
The entry into and performance by any of the Obligors of, and the transactions contemplated by, the Finance Documents and the Transaction Documents do not and will not conflict with:

 

	  	
(a)

 

	
any law, statute, rule or regulation applicable to it, or any order, judgment, decree or permit to which it is subject, including any law, statute, rule or regulation implemented to combat money laundering and bribery;

 

	  	
(b)

 

	
its or any of its Subsidiaries' constitutional documents; or

 

	  	
(c)

 

	
any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets.

 

	
19.4

 

	
Power and authority

 

	  	
(a)

 

	
Each Obligor has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents and the Transaction Documents to which it is a party and the transactions contemplated by those Finance Documents and Transaction Documents.

 

	  	
(b)

 

	
All necessary corporate, shareholder and other action have been taken by each Obligor to approve and authorize the execution of the Finance Documents and the Transaction Documents, the compliance with the provisions thereof and the performance of its obligations thereunder.

 

 

 

  

47

 

 

 

	  	
(c)

 

	
Each of the Borrowers acts for its own account by entering into the Finance Documents and obtaining the Facility.

 

	
19.5

 

	
Validity and admissibility in evidence

 

	  	
All Authorisations required or desirable:

 

	  	
(a)

 

	
to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents and the Transaction Documents to which it is a party;

 

	  	
(b)

 

	
to make the Finance Documents and the Transaction Documents admissible in evidence in its jurisdiction of incorporation; and

 

	  	
(c)

 

	
in connection with each Obligor’s business and ownership of assets,

 

	  	
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.

 

	
19.6

 

	
Governing law and enforcement

 

	  	
(a)

 

	
The choice of Norwegian law and any other applicable law respectively as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.

 

	  	
(b)

 

	
Any judgment obtained in Norway and/or any other applicable jurisdiction in relation to a Finance Document will be recognised and enforced in the relevant Obligor’s jurisdiction of incorporation.

 

	
19.7

 

	
Insolvency

 

	  	
No corporate action, legal proceeding or other procedure or step described in Clause 24.6  (Insolvency), Clause 24.8 (Insolvency proceedings) or Clause 24.9 (Creditors' process) is currently pending or, to its knowledge, threatened in relation to any Obligor, and none of the circumstances described in Clause 24.6  (Insolvency), Clause 24.8 (Insolvency proceedings) or Clause 24.9 (Creditors' process) applies to any of the Obligors.

 

	
19.8

 

	
Deduction of Tax

 

	  	
No Obligor is required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.

 

	
19.9

 

	
No filing or stamp taxes

 

	  	
Under the law of the relevant Obligor’s jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents, other than the Mortgages.

 

	
19.10

 

	
No default

 

	  	
(a)

 

	
No Event of Default is continuing or might reasonably be expected to result from the making of a Utilisation.

 

	  	
(b)

 

	
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on any Obligor or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect.

 

 

 

 

  

48

 

 

 

	
19.11

 

	
No misleading information

 

	  	
(a)

 

	
Any factual information provided by  any Obligor was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

 

	  	
(b)

 

	
The financial information provided by any Obligor has been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

 

	  	
(c)

 

	
Nothing has occurred or been omitted and no information has been given or withheld that results in the information provided by any Obligor being untrue or misleading in any material respect.

 

	
19.12

 

	
Financial statements

 

	  	
(a)

 

	
Its Original Financial Statements were prepared in accordance with GAAP consistently applied.

 

	  	
(b)

 

	
Its Original Financial Statements fairly represent its financial condition and operations (consolidated in the case of the Guarantor) during the relevant financial year.

 

	  	
(c)

 

	
There has been no material adverse change in its business or financial condition (or the business or consolidated financial condition of any Obligor) since the date of delivery of its latest financial statements.

 

	
19.13

 

	
Pari passu ranking

 

	  	
The relevant Obligor's 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 mandatorily preferred by law applying to companies generally.

 

	
19.14

 

	
No proceedings pending or threatened

 

	  	
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor or any of its Subsidiaries.

 

	
19.15

 

	
Title

 

	  	
The relevant Obligor will hold the legal title and/or will be the beneficial party, as the case may be, to the Mortgaged Assets.

 

	
19.16

 

	
No security

 

	  	
None of the Mortgaged Assets will from the first Utilisation Date be affected by any Security, and no Obligor will be a party to, nor is it or any of the Mortgaged Assets bound by any order, agreement or instrument under which it is, or in certain events may be, required to create, assume or permit to arise any Security over any of the Mortgaged Assets, save for the Security created under the Security Documents, for liens arising solely by operation of law and/or in the ordinary course of business or otherwise as agreed with the Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	
19.17

 

	
No immunity

 

	  	
No Obligor, nor any of their assets, are entitled to immunity from suit, execution, attachment or other legal process, and the relevant Obligor’s entry into of the Finance Documents and the Transaction Documents constitutes, and the exercise of its rights and performance of and compliance with its obligations under Finance Documents and the Transaction Documents will constitute, private and commercial acts done and performed for private and commercial purposes.

 

 

 

 

  

49

 

 

 

	
19.18

 

	
Ranking of Security Documents

 

	  	
The Security created by the Security Documents has or will have the ranking in priority which it is expressed to have in the Security Documents and the Security is not subject to any prior ranking.

 

	
19.19

 

	
Taxation

 

	  	
(a)

 

	
No Obligor is overdue in the filing of any Tax returns.

 

	  	
(b)

 

	
To the best of its knowledge and belief, no claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor with respect to Taxes which is reasonably likely to have a material adverse effect on its ability to perform its obligations under the Finance Documents.

 

	  	
(c)

 

	
The relevant Obligor is resident for Tax purposes only in the jurisdiction of its incorporation, unless the Agent shall have been otherwise informed in writing.

 

	
19.20

 

	
Environmental compliance

 

	  	
Each of the Borrowers (and any of its Affiliates), the Technical Manager and any Charterers have performed and observed all Environmental Laws, Environmental Approvals and all other covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with the Vessels.

 

	
19.21

 

	
Environmental Claims

 

	  	
No Environmental Claim has been commenced or (to the best of its knowledge and belief, having made due and careful enquiry) is threatened against it where that claim has or is reasonably likely  to have a material adverse effect on its ability to perform its obligations under the Finance Documents and the Transaction Documents.

 

	
19.22

 

	
ISM Code and ISPS Code compliance

 

	  	
All requirements of the ISM Code and the ISPS Code as they relate to the Borrowers (or any of their Affiliates), the Technical Manager, any Charterers and the Vessels have been complied with.

 

	
19.23

 

	
The Vessels

 

	  	
The Vessels will on the relevant Utilisation Date be:

 

	  	
(a)

 

	
in the absolute ownership of the relevant Borrower free and clear of all encumbrances (other than current crew wages and the Mortgages) and the relevant Borrower will be the sole, legal and beneficial owner of the relevant Vessel;

 

	  	
(b)

 

	
registered in the name of the relevant Borrower with the relevant Approved Ship Registry under the laws and flag applicable for the relevant Approved Ship Registry;

 

	  	
(c)

 

	
operationally seaworthy in every way and fit for service; and

 

	  	
(d)

 

	
classed with ABS or such other classification society as approved by the Agent, free of all overdue requirements and other recommendations.

 

	
19.24

 

	
Financial Indebtedness

 

	  	
No Obligor 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).

 

 

 

 

  

50

 

 

 

	
19.25

 

	
Sanctions

 

	  	
(a)

 

	
Each Obligor, each of their Affiliates, their joint ventures, and their respective directors, officers, employees, agents or representatives has been and is in compliance with Sanctions Laws;

 

	  	
(b)

 

	
No Obligor, nor any of their Affiliates, their joint ventures, and their respective directors, officers, employees, agents or representatives:

 

	  	  	
(i)

 

	
is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or

 

	  	  	
(ii)

 

	
is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

 

	
19.26

 

	
Repetition

 

	  	
The Repeating Representations are deemed to be made by each of the Borrowers and the Guarantor by reference to the facts and circumstances then existing on the date of the Utilisation Request and the first day of each Interest Period and on the date of delivery of each Compliance Certificate (or, if no such Compliance Certificate is forwarded, on each day such certificate should have been forwarded to the Agent at the latest).

 

	
20.

 

	
INFORMATION UNDERTAKINGS

 

	  	
The undertakings in this Clause 20 (Information undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

	
20.1

 

	
Financial statements

 

	  	
The Borrowers, or the Guarantor if no Borrower has acceded to the Agreement, shall supply to the Agent copies for all the Lenders of:

 

	  	  	
(i)

 

	
their most recent quarterly management accounts (profit and loss statements and balance sheet) to be delivered as soon as the same become available but in any event within 60 days after the reporting period, provided however, that quarterly management accounts of the relevant Borrower shall only be delivered from the beginning at the first quarter after Delivery of the respective Vessels;

 

	  	  	
(ii)

 

	
the most recent annual audited accounts of the Guarantor and the unaudited annual accounts of the Borrowers to be delivered as soon as the same become available but in any event within 180 days after the end of the reported fiscal year;

 

	  	
Cash flow projections shall be delivered by the Borrowers by 31 December for the following 12 months, or upon request of any Lender.

 

	
20.2

 

	
Compliance Certificate

 

	  	
The Borrowers shall supply to the Agent, with each set of financial statements delivered pursuant to paragraph (i) and (ii) Clause 20.1 (Financial statements), a Compliance Certificate signed by an authorised officer of the Borrowers and the Guarantor setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial covenants) as at the date as at which those financial statements were drawn up.

 

	
20.3

 

	
Requirements as to financial statements

 

	  	
(a)

 

	
Each set of financial statements delivered by the Borrowers pursuant to Clause 20.1 (Financial statements) shall be certified by an authorised officer of the relevant company as fairly representing its financial condition as at the date as at which those financial statements were drawn up.

 

 

 

 

  

51

 

 

 

	  	
(b)

 

	
The Borrowers shall procure that each set of financial statements delivered pursuant to Clause 20.1 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the relevant Obligor) deliver to the Agent:

 

	  	  	
(i)

 

	
a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and

 

	  	  	
(ii)

 

	
sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 21 (Financial covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.

 

	  	  	
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

 

	
20.4

 

	
Information: miscellaneous

 

	  	
The Borrowers shall supply to the Agent (with copies for all the Lenders, if the Agent so requests):

 

	  	
(a)

 

	
all documents dispatched by the Borrowers and the Guarantor to their shareholders generally (or any class of them) or their creditors generally at the same time as they are dispatched;

 

	  	
(b)

 

	
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Obligor, and which might, if adversely determined, have a Material Adverse Effect;

 

	  	
(c)

 

	
promptly, such further information regarding the financial condition, business and operations of any Obligor as any Finance Party (through the Agent) may reasonably request, promptly, such information about the Vessels’ classification records and status as the Agent may reasonably request;

 

	  	
(d)

 

	
promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its direct or indirect owners, Affiliates, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives, as well as information on what steps are being taken with regards to answer or oppose such; and

 

	  	
(e)

 

	
promptly upon becoming aware that it, any of its direct or indirect owners, Affiliates, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has become or is likely to become a Restricted Party.

 

	
20.5

 

	
Notification of default

 

	  	
(a)

 

	
Each of the Borrowers and the Guarantor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Borrower or Guarantor is aware that a notification has already been provided by another Borrower or Guarantor).

 

 

 

  

52

 

 

 

	  	
(b)

 

	
Promptly upon a request by the Agent, the Borrowers shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

 

	
20.6

 

	
Notification of Environmental Claims

 

	  	
The Borrowers shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same:

 

	  	
(a)

 

	
if any Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against the Borrowers (or any of its Affiliates), any Charterers, the Technical Manager or the Vessels; and

 

	  	
(b)

 

	
of any fact and circumstances which will or are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Borrowers (or any of their Affiliates), any Charterers, the Technical Manager or any of the Vessels,

 

	  	
where the claim would be reasonably likely, if determined against the Borrowers (or any of its Affiliates) or the Vessels, to have a Material Adverse Effect.

 

	
20.7

 

	
Market Value

 

	  	
The Borrowers shall:

 

	  	
(a)

 

	
Arrange for, at their own expense, the Market Value of the Vessels to be determined on a quarterly basis, and deliver such market valuations to the Agent (on behalf of the Finance Parties) together with the financial statements to be delivered in accordance with Clause 20.1 (Financial statements); and

 

	  	
(b)

 

	
Should the Agent reasonably assume that a Default has occurred or may occur, or should a Vessel be sold or suffer a Total Loss, the Agent may arrange, or require the Borrowers to arrange, additional determinations of the Market Value of the Vessels at such frequency as the Agent (on behalf of Finance Parties) may request and at the Borrowers' expense.

 

	
20.8

 

	
"Know your customer" checks

 

	  	
(a)

 

	
If:

 

	  	  	
(i)

 

	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

	  	  	
(ii)

 

	
any change in the status of the Borrowers or the Guarantor after the date of this Agreement; or

 

	  	  	
(iii)

 

	
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

 

	  	  	
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers and/or the Guarantor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, 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 described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

 

 

 

  

53

 

 

 

	  	
(b)

 

	
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

	  	
(c)

 

	
The Lenders to carry out and be satisfied with the results of all applicable know your customer requirements.

 

	
20.9

 

	
Disclosure of information

 

	  	
The Borrowers and the Guarantor irrevocably authorise the Finance Parties to give, divulge and reveal from time to time information and details relating to its account, the Vessels, the Finance Documents, and the Loan and any other agreement entered into by the Obligors or information provided by the Obligors in connection with the Loan to (i) any private, public or internationally recognised authorities, (ii) the Finance Parties’ respective head office, branches and affiliates, and professional advisers, (iii) any other parties to the Finance Documents, (iv) a rating agency or their professional advisers, (v) any person with whom they propose to enter (or contemplate entering) into contractual relations in relation to the Loans, (vi) any insurance company relevant to the Finance Parties, the Obligors, the Vessels and/or the Loan, and (vii) any other person(s) regarding the funding, refinancing, transfer, assignment, sale, sub-participation or operational arrangement or other transaction in relation thereto, including without limitation, for purposes in connection with a securitization or any enforcement, preservation, assignment, transfer, sale or sub-participation of any of the Finance Parties’ rights and obligations. The Finance Parties agree not to disclose information to any third party outside of the scope of the disclosure described above and further agree not to disclose any more information for such purposes than is reasonably necessary.

 

	
21.

 

	
FINANCIAL COVENANTS

 

	
21.1

 

	
The Guarantor

 

	  	
The Guarantor shall on a consolidated basis, measured and documented quarterly, at all times maintain:

 

	  	
(a)

 

	
unencumbered consolidated Cash of minimum the higher of (i) USD 20.000.000 and (ii) six per cent (6 %) of the Total Interest Bearing Debt;

 

	  	
(b)

 

	
a Value Adjusted Tangible Net Worth of at least USD 100.000.000, but in any event the Value Adjusted Tangible Net Worth shall at all times be no less than twenty five per cent (25 %) of the Value Adjusted Total Assets; and

 

	  	
(c)

 

	
a positive Working Capital.

 

	
21.2

 

	
Each Borrower

 

	  	
Each Borrower shall at all times, measured and documented quarterly, maintain a positive Working Capital.

 

 

 

  

54

 

 

 

	
22.

 

	
GENERAL UNDERTAKINGS

 

	  	
The undertakings in this Clause 22 (General undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

	
22.1

 

	
Authorisations

 

	  	
Each Obligor shall promptly obtain, comply with and do all that is necessary to maintain in full force and effect, any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

 

	
22.2

 

	
Compliance with laws

 

	  	
(a)

 

	
Each Obligor, their Affiliates, the Technical Manager, the Commercial Manager and any Charterer, shall comply in all respects with all laws, directives, regulations, decrees, rulings and such analogous rules to which it or its business may be subject.

 

	  	
(b)

 

	
Each Obligor shall, and shall procure that any Affiliate, the Technical Manager, the Commercial Manager and any Charterer comply in all respect with all Sanctions Laws and the laws of the Approved Ship Registry.

 

	  	
(c)

 

	
Each Obligor and parties acting on its behalf shall observe and abide with any law, official requirement or other regulatory measure or procedure implemented to combat (a) money laundering (as defined in Article 1 of the Directive (2005/60/EC) of the council of the European Communities (as amended, supplemented and/or replaced from time to time)) and (b) bribery and corrupt practices.

 

	
22.3

 

	
Negative pledge

 

	  	
(a)

 

	
The Borrowers shall not create or permit to subsist any Security over the Vessels or any of their assets.

 

	  	
(b)

 

	
No Borrower shall:

 

	  	  	
(i)

 

	
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by any Obligor;

 

	  	  	
(ii)

 

	
sell, transfer or otherwise dispose of any of its receivables on recourse terms;

 

	  	  	
(iii)

 

	
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

 

	  	  	
(iv)

 

	
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.

 

	  	
(c)

 

	
Paragraphs (a) and (b) above do not apply to any Security listed below:

 

	  	  	
(i)

 

	
any netting or set-off arrangement entered into by any Obligor in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances, hereunder any rights of pledge and set-off in relation to a cash pool arrangement approved by the Agent (on behalf of the Finance Parties and the Hedging Banks);

 

 

 

  

55

 

 

 

 

	  	  	
(ii)

 

	
any lien arising by operation of law and in the ordinary course of trading and securing obligations not more than thirty (30) days overdue;

 

	  	  	
(iii)

 

	
any Security entered into pursuant to any Finance Document;

 

	  	  	
(iv)

 

	
any cash collateral from an Obligor to any Hedging Bank as security (for its own account) for any swap transaction to be entered to between that Hedging Bank and an Obligor, and any cash collateral so placed by an Obligor with a Hedging Bank shall be released, discharged and (if required) deregistered immediately after evidence of registration of the Mortgages on all of the Vessels;

 

	  	  	
(v)

 

	
arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a Borrower in the ordinary course of trading on arm's length terms and on the supplier's standard and usual terms;

 

	  	  	
(vi)

 

	
Security consented to in writing by the Agent (on behalf of the Finance Parties); or

 

	  	  	
(vii)

 

	
any Security or quasi-Security over bank accounts arising under the general terms and conditions (algemene bankvoorwaarden) of any member of the Dutch Bankers' Association (Nederlandse Vereniging van Banken).

 

	
22.4

 

	
Disposals and acquisitions

 

	  	
The Borrowers shall not:

 

	  	
(a)

 

	
Whether by a single transaction or a series of related or unrelated transactions and whether at the same time or over a period of time, sell, transfer, lease out, grant options, grant rights of first refusal or otherwise dispose of the whole or any part of its undertakings, assets, including but not limited to the Vessels, or revenues (present or future) or agree to do so; or

 

	  	
(b)

 

	
acquire or replace an asset or acquire any shares; or

 

	  	
(c)

 

	
charter in any vessel or make any investment other than in the normal course of business related to the operation of the Vessels or incur any Financial Indebtedness other than in the normal course of business related to the operation of the Vessels, provided, however, that the Borrowers shall be entitled to obtain non-amortizing, Intra Group Loans from the Guarantor as long as such loans are fully subordinated to the Borrowers’ obligations under the Finance Documents with any interest thereunder to be accumulated and added to the outstanding loan amount and shall not be repaid as long as any amounts are outstanding under the Finance Documents and/or any Hedging Agreements, and pledged/assigned to the Agent (on behalf of the Finance Parties and the Hedging Banks) under an Intra Group Loans Assignment Agreement.

 

	
22.5

 

	
Merger

 

	  	
No Obligor shall enter into any form of amalgamation, merger, demerger or corporate reconstruction, or any acquisition of any other company or corporate entity.

 

	
22.6

 

	
Shareholding

 

	  	
The Guarantor shall always remain the 100 % owner of the Shares.

 

	
22.7

 

	
Change of business

 

	  	
No substantial change shall be made to the general nature of the business of Obligors from that carried on at the date of this Agreement, and the Borrowers shall not engage in any other business other than ownership and operation of the Vessels. The Guarantor shall always remain listed at the New York Stock Exchange.

 

 

 

 

  

56

 

 

 

	
22.8

 

	
Title

 

	  	
The Borrowers and/or the Guarantor (as the case may be) shall hold legal title to and own the entire beneficial interest in the Mortgaged Assets, free of all Security and other interests and rights of every kind, except for those created by the Financial Documents and as permitted in Clause 22.3 (c) (Negative pledge).

 

	
22.9

 

	
Insurances – general

 

	  	
Each of the Borrowers and the Guarantor shall maintain appropriate insurance cover with respect to its properties, assets and operations of such types, in such amounts and against such risks as are maintained by prudent companies carrying on the same or substantially similar business. All insurances must be with financially sound and reputable insurance companies, funds or underwriters.

 

	
22.10

 

	
Earnings Accounts

 

	  	
The Borrowers shall maintain the Earnings Accounts with the Account Bank and ensure that all Earnings are paid to the Earnings Accounts.

 

	
22.11

 

	
Derivative transactions

 

	  	
The Borrowers shall not enter into any derivative transactions with other parties than the Hedging Banks unless the Hedging Banks have received a reasonable opportunity, in writing, to provide competitive rates to the Borrowers.

 

	
22.12

 

	
Distribution restrictions and subordination of inter-company debt

 

	  	
(a)

 

	
The Borrowers may not distribute any dividend until 6 months after the Delivery Date of the last Vessel.

 

	  	
(b)

 

	
No Obligor shall distribute any dividends if a Default has occurred and is continuing.

 

	  	
(c)

 

	
All (i) Intra Group Loans to the Borrowers, (ii) claims of the Guarantor against the Borrowers and (iii) amounts owed to the Technical Managers and/or Commercial Managers (provided the Technical Managers and/or Commercial Managers are Affiliates of the Borrowers or the Guarantor) shall always be fully subordinated to the obligations of the Borrowers under the Finance Documents.

 

	
22.13

 

	
Transaction Documents

 

	  	
The Borrowers shall procure that no material terms of any of the Transaction Documents are amended or terminated, or any waivers of any material terms thereof are agreed, without the prior written consent of the Agent (on behalf of the Finance Parties).

 

	
22.14

 

	
Taxation

 

	  	
Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that such payment is being contested in good faith or can be lawfully withheld.

 

	
22.15

 

	
No change of name etc.

 

	  	
No Obligor shall change:

 

	  	
(a)

 

	
the end of its fiscal year;

 

	  	
(b)

 

	
its nature of business;

 

	  	
(c)

 

	
(applicable for the Borrowers only) its constitutional documents;

 

 

 

 

  

57

 

 

 

	  	
(d)

 

	
its legal name;

 

	  	
(e)

 

	
its type of organization; or

 

	  	
(f)

 

	
its jurisdiction;

 

	  	
without the prior written consent of the Agent (on behalf of the Finance Parties).

 

	
22.16

 

	
Sanctions

 

	  	
(a)

 

	
Without prejudice to the other provisions of this Agreement, each of the Obligors undertakes to the Finance Parties from the date of this Agreement that:

 

	  	  	
(i)

 

	
it, and any Affiliate of any of them, or any director, officer, agent, employee, representative or person acting on behalf of the foregoing, is not a Restricted Party and does not act directly or indirectly on behalf of a Restricted Party;

 

	  	  	
(ii)

 

	
it shall, and shall procure that each Affiliate of any of them shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Finance Parties;

 

	  	  	
(iii)

 

	
it shall procure that no proceeds from any activity or dealing with a Restricted Party are credited to any bank account held with any Finance Party in its name or in the name of any Affiliate of any of them;

 

	  	  	
(iv)

 

	
it, and each Affiliate of any of them, has taken reasonable measures to ensure compliance with Sanctions Laws;

 

	  	  	
(v)

 

	
it shall, and shall procure that each Affiliate of any of them shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions Laws by any Sanctions Authority; and

 

	  	  	
(vi)

 

	
it shall not accept, obtain or receive any goods or services from any Restricted Party, except (without limiting Clause 22.2 (Compliance with laws)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred in respect of an activity or dealing with a Restricted Party by an Obligor in accordance with this Agreement.

 

	  	
(b)

 

	
The Obligors shall not, and shall procure that any Affiliate of any of them shall not, permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Facility or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Party; or (ii) in any other manner that could result in any Obligor or a Finance Party being in breach of any Sanctions Laws or becoming a Restricted Party.

 

	
22.17

 

	
Application of FATCA

 

	  	
No Obligor shall become a FATCA FFI or a US Tax Obligor.

 

 

 

 

  

58

 

 

 

	
23.

 

	
VESSELS UNDERTAKINGS

 

	
23.1

 

	
General

 

	  	
The undertakings in this Clause 23 (Vessels undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

	
23.2

 

	
Insurance – Vessels

 

	  	
(a)

 

	
The Borrowers shall maintain or ensure that the Vessels are insured against such risks, including but not limited to, hull and machinery, protection & indemnity (including cover for pollution liability as normally adopted by the industry for similar units for an amount not less than USD 1,000,000,000, and freight, demurrage and defence cover), hull interest, freight interest and war risk insurances, including blocking and trapping, confiscation, terrorism and piracy, in such amounts, on such terms and placed through first class insurance brokers with such first class insurers as the Agent shall approve, and always subject to the Nordic Marine Insurance Plan of 2013 latest version.

 

	  	
(b)

 

	
The aggregate insurance value, except for protection & indemnity and Loss of Hire, shall be at least equal to the higher of (i) the aggregate Market Value of the Vessels and (ii) hundred and twenty per cent (125%) of the Loan, whereof the hull and machinery insurance shall at all times cover at least eighty per cent (80%) of the insurable value (Hull and Machinery and Hull Interest). The deductible of the Hull and Machinery insurance shall never be higher than such amount as the Agent may from time to time approve.

 

	  	
(c)

 

	
The Borrowers shall procure that the Security Agent (on behalf of the Finance Parties and the Hedging Banks) is noted as first priority mortgagee in the insurance contracts, together with the confirmation from the underwriters, or confirmations from insurance brokers confirming this on behalf of underwriters, to the Security Agent thereof that the notice of assignment with regards to the Insurances and the loss payable clauses are noted in the insurance contracts and that standard letters of undertaking/cover notes/policies/certificates of entry are executed by the insurers and/or the insurance broker(s).

 

	  	
(d)

 

	
Within 15 days prior to the Utilisation Date inform the Agent of with whom the Insurances will be placed and on what main terms they will be effected, and within reasonable time prior to the expiry date of the relevant Insurances, the Borrowers shall procure the delivery to the Agent of a certificate from the insurance broker(s) through whom the Insurances referred to in paragraph (a) above have been renewed and taken out in respect of the Vessel with insurance values as required by paragraph (b) above, that such Insurances are in full force and effect and that the Security Agent (on behalf of the Finance Parties and the Hedging Banks) have been noted as first priority mortgagee by the relevant insurers.

 

 

 

 

  

59

 

 

 

	  	
(e)

 

	
The Borrowers shall allow for the Agent and/or any other Finance Party and/or any Hedging Bank to take out for the Borrowers' accounts a Mortgagee’s Interest Insurance and a Mortgagee’s Interest - Additional Perils Pollution Insurance (covering one hundred and twenty per cent (120%) of the Loan).

 

	  	
(f)

 

	
The Agent may also for the account of the Borrowers take out such other Insurances as the Finance Parties and the Hedging Banks may reasonably require considering the trading and flag of the Vessels.

 

	  	
(g)

 

	
If any of the Insurances referred to in paragraph (a) above form part of a fleet cover, the Borrowers shall procure, except for protection & indemnity (where the Borrowers shall procure to obtain standard market undertakings in favour of the Security Agent with respect to protection & indemnity from the insurers or the insurance broker), that the insurers or the insurer broker shall undertake to the Security Agent that they shall neither set-off against any claims in respect of the Vessels any premiums due in respect of other units under such fleet cover or any premiums due for other insurances, nor cancel this Insurance for reason of non-payment of premiums for other units under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of a Vessel if and when so requested by the Security Agent.

 

	  	
(h)

 

	
The Borrowers shall procure that the Vessels always are employed in conformity with the terms of the instruments of Insurances (including any warranties expressed or implied therein) and comply with such requirements as to extra premium or otherwise as the insurers may prescribe.

 

	  	
(i)

 

	
The Borrowers will not make any material change to the insurances described under (a) above without the prior written consent of the Agent.

 

	  	
(j)

 

	
The Borrowers shall pay for an insurance opinion commissioned by the Agent to be prepared by an independent insurance consultant, in form and contents acceptable to the Agent.

 

	
23.3

 

	
Flag, name and registry

 

	  	
The Vessels shall be registered in an Approved Ship Registry. The Borrowers may not move any of the Vessels to any other Approved Ship Register without the prior written approval of the Agent (on behalf of the Finance Parties and the Hedging Banks).

 

	
23.4

 

	
Classification and repairs

 

	  	
The Borrowers shall, and shall procure that any Charterer shall, keep or shall procure that the Vessels are kept in a good, safe and efficient condition consistent with first class ownership and management practice and in particular:

 

 

 

 

  

60

 

 

 

	  	
(a)

 

	
so as to maintain its class at the highest level with ABS or another IACS classification society approved to the Agent, free of overdue recommendations and qualifications; and

 

	  	
(b)

 

	
so as to comply with the laws and regulations (statutory or otherwise) applicable to units registered under the flag state of the Vessels or to vessels trading to any jurisdiction to which the Vessels may trade from time to time;

 

	  	
(c)

 

	
not, without the prior written consent of the Agent (which shall not be unreasonably withheld), change the classification society of any of the Vessels; and

 

	  	
(d)

 

	
not, without the prior written consent of the Agent, conduct modifications, repairs or remove parts which may reduce the value of the Vessels.

 

	  	
Within 15 days prior to the first Utilisation Date the Borrowers shall inform the Agent of the classification society the Vessels will be classed.

 

	
23.5

 

	
Inspections and class records

 

	  	
(a)

 

	
The Borrowers shall procure that the Agent's surveyor at the Borrowers’ cost, is permitted to inspect the condition of the Vessels once a year, if so requested by the Agent, 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.

 

	  	
(b)

 

	
The Borrowers shall instruct the classification society to give the Agent access to class records and other information from the classification society in respect of the Vessels, by sending a written instruction in such form and substance as the Agent may require. The Agent shall also be granted electronic access to class records.

 

	
23.6

 

	
Surveys

 

	  	
The Borrowers shall submit to or cause the Vessels to be submitted to such periodic or other surveys as may be required for classification purposes and to ensure full compliance with regulations of the flag state of the Vessels and to supply or to cause to be supplied to the Agent copies of all survey reports and confirmations of class issued in respect thereof whenever such is required by the Agent, however such requests are limited to once a year.

 

	
23.7

 

	
Notification of certain events

 

	  	
The Borrowers shall immediately notify the Agent of:

 

	  	
(a)

 

	
any accident to any of the Vessels involving repairs where the costs will or is likely to exceed five per cent (5 %) of the insurance value of the relevant Vessel;

 

	  	
(b)

 

	
any requirement or recommendation made by any insurer or classification society or by any competent authority which is not, or cannot be, complied with immediately;

 

	  	
(c)

 

	
any exercise or purported exercise of any arrest or lien on any of the Vessels, their Earnings or the Insurances;

 

	  	
(d)

 

	
any occurrence as a result of which any of the Vessels has become or is, by the passing of time or otherwise, likely to become a Total Loss; and

 

	  	
(e)

 

	
any claim for a material breach of the ISM Code or the ISPS Code being made against a Borrower or the Technical Manager or otherwise in connection with a Vessel.

 

	
23.8

 

	
Operation of the Vessels

 

	  	
(a)

 

	
The Borrowers shall procure that the Vessels are managed by the Technical Manager pursuant to a Technical Management Agreement and shall not, without the prior written consent of the Agent (which shall not be unreasonably withheld), change or allow the change of the technical management of the Vessels.

 

 

 

 

  

61

 

 

 

	  	
(b)

 

	
The Borrowers shall procure that each of the Technical Manager and the Commercial Manager signs, executes and deliver a Manager’s undertaking in such form as the Agent (on behalf of the Finance Parties) may require.

 

	  	
(c)

 

	
The Borrowers shall, and shall procure that the Technical Manager shall, comply, or procure the compliance in all material respects with the ISM Code and the ISPS Code, all Environmental Laws, all Sanction Laws, the laws of the Approved Ship Registry, the United States Oil Pollution Act 1990 and all other laws or regulations relating to the Vessels, their ownership, operation and management or to the business of the Borrowers and the Technical Manager and shall not employ the Vessels nor allow their employment:

 

	  	  	
(i)

 

	
in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; and

 

	  	  	
(ii)

 

	
in the event of hostilities in any part of the world (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of the Vessels unless the Borrowers have (at their own expense) effected any special, additional or modified insurance cover which shall be necessary or customary for first class unit owners within the territorial waters of such country at such time and has provided evidence of such cover to the Agent.

 

	  	
Without limitation to the generality of this Clause 23.8 (Operation of the Vessels), the Borrowers and the Technical Manager shall comply or procure compliance, with, as applicable, all requirements of the International Convention for the Safety of Life at Sea (SOLAS) 1974 as adopted, amended or replaced from time to time including, but not limited to, the ISM Code or the ISPS Code. None of the Vessels shall under any circumstances carry any nuclear waste/material.

 

	
23.9

 

	
ISM Code compliance

 

	  	
The Borrowers shall, and shall procure that the Technical Manager:

 

	  	
(a)

 

	
procure that the Vessels remains subject to a SMS;

 

	  	
(b)

 

	
procure that a valid and current SMC is maintained for the Vessels;

 

	  	
(c)

 

	
procure that the Technical Manager maintains a valid and current DOC;

 

	  	
(d)

 

	
immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of any of the Vessels or of the DOC of the Technical Manager; and

 

	  	
(e)

 

	
immediately notify the Agent in writing of any "accident" or "major nonconformity", each as those terms is defined in the Guidelines in the application of the IMO International Safety Management Code issued by the International Chamber of Shipping and International Shipping Federation.

 

	
23.10

 

	
Environmental compliance

 

	  	
The Borrowers shall, and shall to the extent reasonably possible procure that the Technical Manager and any Charterers shall, comply in all respects with all Environmental Laws applicable to any of them or the Vessels, including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with all Environmental Approvals applicable to any of them and/or the Vessel.

 

 

 

 

  

62

 

 

 

	
23.11

 

	
Arrest

 

	  	
The Borrowers shall pay and discharge when due:

 

	  	
(a)

 

	
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Vessels, the Earnings or the Insurances;

 

	  	
(b)

 

	
all tolls, taxes, dues, fines, penalties and other amounts charged in respect of the Vessels, the Earnings or the Insurances; and

 

	  	
(c)

 

	
all other outgoings whatsoever in respect of the Vessels, the Earnings and the Insurances,

 

	  	
and forthwith (however not later than after twenty (20) Business Days) upon receiving a notice of arrest of a Vessel, or its detention in exercise or purported exercise of any lien or claim, the Borrowers shall procure its release by providing bail or providing the provision of security or otherwise as the circumstances may require.

 

	
23.12

 

	
Chartering

 

	  	
The Borrowers shall not, without the prior written consent of the Agent (acting on the instructions of all Lenders):

 

	  	
(a)

 

	
let any of the Vessels on bareboat charter for any period;

 

	  	
(b)

 

	
enter into any other agreement related to the chartering and operation of a Vessel exceeding twelve (12) months or any pooling arrangements related to the Earnings of the Vessels;

 

	  	
(c)

 

	
terminate, cancel, amend or supplement any Charterparty with a duration exceeding twelve (12) months, nor assign such Charterparty or other contract of employment to any other person.

 

	
24.

 

	
EVENTS OF DEFAULT

 

	  	
Each of the events or circumstances set out in Clause 24 (Events of Default) is an Event of Default (save for Clause 24.15 (Acceleration)).

 

	
24.1

 

	
Non-payment

 

	  	
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:

 

	  	
(a)

 

	
its failure to pay is caused by:

 

	  	  	
(i)

 

	
administrative or technical error; or

 

	  	  	
(ii)

 

	
a Disruption Event; and

 

	  	
(b)

 

	
payment is made within three (3) Business Days of its due date.

 

	
24.2

 

	
Financial covenants

 

	  	
Any requirement of Clause 21 (Financial covenants) is not satisfied.

 

	
24.3

 

	
Other obligations

 

	  	
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.1 (Non-payment) and Clause 24.2 (Financial covenants), and Clauses 24.4 – 24.14), provided that if such non-compliance is, in the opinion of the Agent, capable of remedy:

 

 

 

 

  

63

 

 

 

	  	
(a)

 

	
the Agent notifies the Borrowers of such non-compliance; and

 

	  	
(b)

 

	
such non-compliance remains unremedied for a period of 30 calendar days.

 

	  	
For the avoidance of doubt, a breach of Clause 22.16 (Sanctions), Clause 23.2 (Insurances - Vessels), Clause 23.3 (Flag, name and registry) and Clause 23.4 (Classification and repairs) are not capable of remedy

 

	
24.4

 

	
Misrepresentation

 

	  	
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

 

	
24.5

 

	
Cross default

 

	  	
(a)

 

	
Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.

 

	  	
(b)

 

	
Any Financial Indebtedness of any Obligor 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).

 

	  	
(c)

 

	
Any commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor of any Obligor as a result of an event of default (however described).

 

	  	
(d)

 

	
Any creditor of any Obligor becomes entitled to declare any Financial Indebtedness of any Obligor due and payable prior to its specified maturity as a result of an event of default (however described).

 

	  	
(e)

 

	
No Event of Default will occur under this Clause 24.5 (Cross default) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than USD 100,000 in respect of the Borrowers and USD 5,000,000 of the Guarantor.

 

	
24.6

 

	
Insolvency

 

	  	
(a)

 

	
Any Obligor 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.

 

	  	
(b)

 

	
The value of the assets of any Obligor is less than its liabilities (taking into account contingent and prospective liabilities).

 

	  	
(c)

 

	
A moratorium is declared in respect of any indebtedness of any Obligor.

 

	
24.7

 

	
Insolvency proceedings

 

	  	
Any corporate action, legal proceedings or other procedure or step is taken in relation to:

 

	  	
(a)

 

	
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Obligor;

 

	  	
(b)

 

	
a composition, compromise, assignment or arrangement with any Obligor;

 

 

 

 

  

64

 

 

 

	  	
(c)

 

	
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor or any of their assets ; or

 

	  	
(d)

 

	
enforcement of any Security over any assets of any Obligor,

 

	  	
or any analogous procedure or step is taken in any jurisdiction.

 

	  	
This Clause 24.8 (Insolvency proceedings) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within thirty (30) days of commencement.

 

	
24.8

 

	
Creditors' process

 

	  	
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of any Obligor having an aggregate value of USD 1,000,000 and is not discharged within thirty (30) days.

 

	
24.9

 

	
Unlawfulness

 

	  	
It is or becomes unlawful for an Obligor to perform any of its obligations under the Transaction Documents.

 

	
24.10

 

	
Repudiation

 

	  	
(a)

 

	
An Obligor repudiates a Transaction Document or evidences an intention to repudiate a Transaction Document.

 

	  	
(b)

 

	
Any Transaction Document ceases to be legal, valid, binding, enforceable or effective.

 

	
24.11

 

	
Material adverse change

 

	  	
Any event or series of events occur which, in the opinion of the Majority Lenders, has or is likely to have a Material Adverse Effect, including but not limited to (i) instability affecting the country where the Vessels are flagged, (ii) changes in global economic and/or political developments and (iii) changes in the international money and/or capital markets.

 

	
24.12

 

	
Cessation of business

 

	  	
An Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a part of its business.

 

	
24.13

 

	
Insurances

 

	  	
Any insurance policy taken out in respect of the Vessels is cancelled, revoked or lapses, or any insurance claim(s) by the Borrowers is repudiated following a Total Loss.

 

	
24.14

 

	
Acceleration

 

	  	
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrowers:

 

	  	
(a)

 

	
cancel the Total Commitments whereupon they shall immediately be cancelled;

 

	  	
(b)

 

	
declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

 

	  	
(c)

 

	
declare that all or part of the Loan be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

 

 

 

  

65

 

 

 

	  	
(d)

 

	
exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

 

 

 

 

  

66

 

 

 

SECTION 9

CHANGES TO PARTIES

 

	
25.

 

	
CHANGES TO THE LENDERS

 

	
25.1

 

	
Assignments and transfers by the Lenders

 

	  	
Subject to this Clause 25 (Changes to the Lenders), a Lender (the "Existing Lender") may assign and transfer any of its rights and/or obligations hereunder to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the "New Lender"), provided that no assignment or transfer can be made to an Obligor or any of their Affiliates.

 

	  	
The Lenders shall notify the Borrower of any proposed assignment or transfer, unless an Event of Default has occurred.

 

	  	
The consent of the Obligors is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

 

	  	  	
(i)

 

	
to another Lender or an Affiliate of a Lender;

 

	  	  	
(ii)

 

	
to a reputable shipping bank which has a minimum rating of "BBB" at S&P or "Baa" at Moody's; or

 

	  	  	
(iii)

 

	
made at a time when an Event of Default is continuing.

 

	
25.2

 

	
Conditions of assignment or transfer

 

	  	
(a)

 

	
A transfer will only be effective if the procedure set out in Clause 25.4 (Procedure for transfer) is complied with.

 

	  	
(b)

 

	
If:

 

	  	  	
(i)

 

	
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

 

	  	  	
(ii)

 

	
as a result of circumstances existing at the date the assignment, transfer or change occurs, a Borrowers or the Guarantor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased Costs),

 

	  	  	
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph (f) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.

 

	  	
(c)

 

	
Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

 

 

 

 

  

67

 

 

 

	
25.3

 

	
Limitation of responsibility of Existing Lenders

 

	  	
(a)

 

	
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

 

	  	  	
(i)

 

	
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

 

	  	  	
(ii)

 

	
the financial condition of any Obligor;

 

	  	  	
(iii)

 

	
the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

 

	  	  	
(iv)

 

	
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

	  	  	
and any representations or warranties implied by law are excluded.

 

	  	
(b)

 

	
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

 

	  	  	
(i)

 

	
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor 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 Existing Lender in connection with any Finance Document; and

 

	  	  	
(ii)

 

	
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

 

	  	
(c)

 

	
Nothing in any Finance Document obliges an Existing Lender to:

 

	  	  	
(i)

 

	
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 25 (Changes to the Lenders); or

 

	  	  	
(ii)

 

	
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

 

	
25.4

 

	
Procedure for transfer

 

	  	
(a)

 

	
Subject to the conditions set out in Clause 25.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

 

	  	
(b)

 

	
The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

 

 

 

 

  

68

 

 

 

	  	
(c)

 

	
Subject to Clause 25.6 (Pro rata interest settlement), on the Transfer Date:

 

	  	  	
(i)

 

	
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the "Discharged Rights and Obligations");

 

	  	  	
(ii)

 

	
each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

 

	  	  	
(iii)

 

	
the Agent, the Mandated Lead Arrangers, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Mandated Lead Arrangers and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

 

	  	  	
(iv)

 

	
the New Lender shall become a Party as a "Lender".

 

	
25.5

 

	
Copy of Transfer Certificate to the Borrowers

 

	  	
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrowers a copy of that Transfer Certificate.

 

	
25.6

 

	
Pro rata interest settlement

 

	  	
If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 25.4 (Procedure for transfer) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

 

	  	
(a)

 

	
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than three (3) Months, on the next of the dates which falls at three (3) Monthly intervals after the first day of that Interest Period); and

 

	  	
(b)

 

	
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

 

	  	  	
(i)

 

	
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

 

	  	  	
(ii)

 

	
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 25.6 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

 

 

 

  

69

 

 

 

	
25.7

 

	
Securitisation

 

	  	
The Agent or the Lenders may include the Loan in a securitisation or similar transaction without the consent of, or any consultation with the Borrowers and/or the Guarantor. The Agent and/or the Lenders (as the case may be) shall have full right of disclosure of information in connection with or in contemplation of such securitisation (or similar transaction). The Borrowers and the Guarantor shall assist the Agent as necessary to achieve a successful securitisation (or similar transaction), hereunder inter alia the following:

 

	  	
(a)

 

	
Keep bank accounts where requested by the Agent and procure that the Earnings are paid to any such account; and

 

	  	
(b)

 

	
Procure that the Insurances according to Clause 23.2 (Insurance – Vessels) are placed with insurers of the requisite rating;

 

	  	
provided however that the Borrowers and/or the Guarantor shall not be required to bear any costs related to any such securitisation.

 

	
25.8

 

	
Security over Lenders' rights

 

	  	
In addition to the other rights provided in this Clause 25, each Lender may, without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure the obligations of that Lender, including, without limitation:

 

	  	
(a)

 

	
any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and

 

	  	
(b)

 

	
in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as Security for those obligations or securities,

 

	  	
except that no such charge, assignment or Security shall:

 

	  	
(c)

 

	
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

 

	  	
(d)

 

	
require any payments to be made by an Obligor or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

 

	
26.

 

	
CHANGES TO THE OBLIGORS

 

	
26.1

 

	
Assignments and transfer by Obligors

 

	  	
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

	
26.2

 

	
Accession as Borrower

 

	
The owners or prospective owners of any Vessel may become a Borrower under this Agreement by execution of the Accession Letter provided it is wholly owned by the Guarantor. The accession shall take effect by the relevant Borrower(s), the Guarantor and the Agent (on behalf of the Finance Parties and the Hedging Banks) signing and executing the relevant Accession Letter, and the Agent is hereby irrevocably authorised by the other Finance Parties and the Hedging Banks to execute any Accession Letter. The Finance Parties and the Hedging Banks agree that this authorisation is given to secure the interest of the Finance Parties and the Hedging Banks under this Agreement and is accordingly irrevocable. After the execution of an Accession Letter the acceding Borrower shall be bound by this Agreement and any other Accession Letters.

 

	
26.3

 

	
Compulsory resignation of FATCA FFIs and US Tax Obligors

 

	  	
If so directed by the Agent (acting on the instructions of all Finance Parties), an Obligor which is a FATCA FFI or a US Tax Obligor shall resign as a Borrower and/or Guarantor prior to the earliest FATCA Application Date relating to any payment by that Obligor (or any payment by the Agent which relates to a payment by that Obligor).

 

  

70

 

SECTION 10

THE FINANCE PARTIES

 

	
27.

 

	
ROLE OF THE AGENT, THE SECURITY AGENT AND THE MANDATED LEAD ARRANGERS

 

	
27.1

 

	
Appointment of the Agent

 

	  	
(a)

 

	
Each other Finance Party and the Hedging Banks appoints the Agent to act as its agent under and in connection with the Finance Documents and each Lender, the Hedging Banks and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.

 

	  	
(b)

 

	
Each other Finance Party and the Hedging Banks authorises the Agent, and each Lender, the Hedging Banks and the Agent authorises the Security Agent, to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions

 

	  	
(c)

 

	
Except where the context otherwise requires, references in this Clause 27 (Role of the Agent, the Security Agent and the Mandated Lead Arrangers) to the "Agent" shall mean the Agent and the Security Agent individually and collectively.

 

	
27.2

 

	
Duties of the Agent

 

	  	
(a)

 

	
Subject to paragraph (b) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

 

	  	
(b)

 

	
Without prejudice to Clause 25.5 (Copy of Transfer Certificate to the Borrowers), paragraph (a) above shall not apply to any Transfer Certificate.

 

	  	
(c)

 

	
Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

	  	
(d)

 

	
If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties and the Hedging Banks.

 

	  	
(e)

 

	
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party and the Hedging Banks (other than the Agent or the Mandated Lead Arrangers) under this Agreement it shall promptly notify the other Finance Parties and the Hedging Banks.

 

	  	
(f)

 

	
The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

 

	
27.3

 

	
Role of the Mandated Lead Arrangers

 

	  	
Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.

 

	
27.4

 

	
No fiduciary duties

 

	  	
(a)

 

	
Nothing in this Agreement constitutes the Agent or the Mandated Lead Arrangers as a trustee or fiduciary of any other person.

 

	  	
(b)

 

	
Neither the Agent nor any Mandated Lead Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

 

 

 

 

  

71

 

 

 

	
27.5

 

	
Business with any Obligor

 

	  	
The Agent and the Mandated Lead Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Obligor.

 

	
27.6

 

	
Rights and discretions of the Agent

 

	  	
(a)

 

	
The Agent may rely on:

 

	  	  	
(i)

 

	
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

	  	  	
(ii)

 

	
any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

 

	  	
(b)

 

	
The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

 

	  	  	
(i)

 

	
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 24.1 (Non-payment));

 

	  	  	
(ii)

 

	
any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

 

	  	  	
(iii)

 

	
any notice or request made by the Borrowers (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Borrowers and the Guarantor.

 

	  	
(c)

 

	
The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

 

	  	
(d)

 

	
The Agent may act in relation to the Finance Documents through its personnel and agents.

 

	  	
(e)

 

	
The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

 

	  	
(f)

 

	
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor any Mandated Lead Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

	
27.7

 

	
Majority Lenders' instructions

 

	  	
(a)

 

	
Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

 

	  	
(b)

 

	
Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.

 

	  	
(c)

 

	
The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

 

 

 

 

  

72

 

 

 

	  	
(d)

 

	
In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

 

	  	
(e)

 

	
The Agent is not authorised to act on behalf of a Lender or the Hedging Banks (without first obtaining that Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.

 

	
27.8

 

	
Responsibility for documentation

 

	  	
Neither the Agent nor any Mandated Lead Arranger:

 

	  	
(a)

 

	
is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, any Mandated Lead Arranger, an Obligor or any other person given in or in connection with any Finance Document; or

 

	  	
(b)

 

	
is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

 

	
27.9

 

	
Exclusion of liability

 

	  	
(a)

 

	
Without limiting paragraph (b) below, the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

 

	  	
(b)

 

	
No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause.

 

	  	
(c)

 

	
The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

 

	  	
(d)

 

	
Nothing in this Agreement shall oblige the Agent or any Mandated Lead Arranger to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Mandated Lead Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any Mandated Lead Arranger.

 

	
27.10

 

	
Lenders' indemnity to the Agent

 

	  	
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three (3) Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

 

 

  

73

 

 

 

	
27.11

 

	
Resignation of the Agent

 

	  	
(a)

 

	
The Agent may resign as Agent and/or Security Agent and appoint one of its Affiliates as successor by giving notice to the other Finance Parties, the Hedging Banks and the Borrowers.

 

	  	
(b)

 

	
Alternatively the Agent may resign as Agent and/or Security Agent by giving thirty (30) days' notice to the other Finance Parties, the Hedging Banks and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a successor Agent and/or Security Agent.

 

	  	
(c)

 

	
If the Majority Lenders have not appointed a successor Agent and/or Security Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrowers) may appoint a successor Agent and/or Security Agent.

 

	  	
(d)

 

	
The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

 

	  	
(e)

 

	
The Agent's resignation notice shall only take effect upon the appointment of a successor.

 

	  	
(f)

 

	
Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation as Agent and/or Security Agent (as the case may be) in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 27 (Role of the Agent and the Mandated Lead Arrangers). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

	  	
(g)

 

	
After consultation with the Borrowers, the Majority Lenders may, by notice to the Agent, require it to resign as Agent and/or Security Agent in accordance with paragraph (b) above. In this event, the Agent shall resign as Agent and/or Security Agent in accordance with paragraph (b) above.

 

	  	
(h)

 

	
The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three (3) months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

 

	  	  	
(i)

 

	
the Agent fails to respond to a request under Clause 12.6 (FATCA Information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

	  	  	
(ii)

 

	
the information supplied by the Agent pursuant to Clause 12.6 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

 

 

 

 

  

74

 

 

 

	  	  	
(iii)

 

	
the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

	  	  	
and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.

 

	
27.12

 

	
Confidentiality

 

	  	
(a)

 

	
In acting as agent for the Finance Parties and the Hedging Banks, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

 

	  	
(b)

 

	
If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

 

	
27.13

 

	
Relationship with the Lenders

 

	  	
(a)

 

	
Subject to Clause 25.6 (Pro rata Interest Settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

 

	  	  	
(i)

 

	
entitled to or liable for any payment due under any Finance Document on that day; and

 

	  	  	
(ii)

 

	
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

 

	  	  	
unless it has received not less than five (5) Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

 

	  	
(b)

 

	
Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 32.5 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 32.2 (Addresses) and paragraph (a)(iii) of Clause 32.5 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

 

	
27.14

 

	
Credit appraisal by the Lenders and the Hedging Banks

 

	  	
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and the Hedging Banks confirms to the Agent and the Mandated Lead Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

 

 

 

  

75

 

 

 

	  	
(a)

 

	
the financial condition, status and nature of each Obligor;

 

	  	
(b)

 

	
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

	  	
(c)

 

	
whether that Lender or Hedging Banks have recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

	  	
(d)

 

	
the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

 

	
27.15

 

	
Reference Banks

 

	  	
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrowers) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

 

	
27.16

 

	
Deduction from amounts payable by the Agent

 

	  	
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

 

	
28.

 

	
CONDUCT OF BUSINESS BY THE FINANCE PARTIES OR THE HEDGING BANKS

 

	  	
No provision of this Agreement will:

 

	  	
(a)

 

	
interfere with the right of any Finance Party or the Hedging Banks to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

 

	  	
(b)

 

	
oblige any Finance Party or the Hedging Banks to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

	  	
(c)

 

	
oblige any Finance Party or the Hedging Banks to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

 

	
29.

 

	
SHARING AMONG THE FINANCE PARTIES

 

	
29.1

 

	
Payments to Finance Parties

 

	  	
If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause 30 (Payment mechanics) (a "Recovered Amount") and applies that amount to a payment due under the Finance Documents then:

 

	  	
(a)

 

	
the Recovering Finance Party shall, within three (3) Business Days, notify details of the receipt or recovery to the Agent;

 

	  	
(b)

 

	
the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 30 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

 

 

 

  

76

 

 

 

	  	
(c)

 

	
the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 30.5 (Partial payments).

 

	
29.2

 

	
Redistribution of payments

 

	  	
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 30.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.

 

	
29.3

 

	
Recovering Finance Party's rights

 

	  	
On a distribution by the Agent under Clause 29.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

 

	
29.4

 

	
Reversal of redistribution

 

	  	
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

 

	  	
(a)

 

	
each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and

 

	  	
(b)

 

	
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

 

	
29.5

 

	
Exceptions

 

	  	
(a)

 

	
This Clause 29 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.

 

	  	
(b)

 

	
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

 

	  	  	
(i)

 

	
it notified that other Finance Party of the legal or arbitration proceedings; and

 

	  	  	
(ii)

 

	
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

 

  

77

 

SECTION 11

ADMINISTRATION

 

	
30.

 

	
PAYMENT MECHANICS

 

	
30.1

 

	
Payments to the Agent

 

	  	
(a)

 

	
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

 

	  	
(b)

 

	
Payment shall be made to such account with such bank as the Agent specifies.

 

	
30.2

 

	
Distributions by the Agent

 

	  	
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 30.3 (Distributions to an Obligor) and Clause 30.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account with such bank as that Party may notify to the Agent by not less than five (5) Business Days' notice.

 

	
30.3

 

	
Distributions to an Obligor

 

	  	
The Agent may (with the consent of the relevant Obligor or in accordance with Clause 31 (Set-off)) apply any amount received by it from that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

 

	
30.4

 

	
Clawback

 

	  	
(a)

 

	
Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

	  	
(b)

 

	
If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

 

	
30.5

 

	
Partial payments

 

	  	
(a)

 

	
If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

 

	  	  	
(i)

 

	
first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents;

 

	  	  	
(ii)

 

	
secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

 

	  	  	
(iii)

 

	
thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement;

 

 

 

 

  

78

 

 

 

	  	  	
(iv)

 

	
fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents; and

 

	  	  	
(v)

 

	
fifthly, in or towards any periodic payments and any other amounts due but unpaid under any Hedging Agreement.

 

	  	
(b)

 

	
The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a) (ii) to (iv) above.

 

	  	
(c)

 

	
Paragraphs (a) and (b) above will override any appropriation made by an Obligor.

 

	
30.6

 

	
No set-off by Borrowers and Guarantor

 

	  	
All payments to be made by a Borrower or the Guarantor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

	
30.7

 

	
Business Days

 

	  	
(a)

 

	
Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

	  	
(b)

 

	
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

	
30.8

 

	
Currency of account

 

	  	
(a)

 

	
Subject to paragraphs (b) and (c) below, USD is the currency of account and payment for any sum due from an Obligor under any Finance Document.

 

	  	
(b)

 

	
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

	  	
(c)

 

	
Any amount expressed to be payable in a currency other than USD shall be paid in that other currency.

 

	
30.9

 

	
Change of currency

 

	  	
(a)

 

	
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

 

	  	  	
(i)

 

	
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and

 

	  	  	
(ii)

 

	
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

 

	  	
(b)

 

	
If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

 

 

 

  

79

 

 

 

 

	
31.

 

	
SET-OFF

 

	  	
(a)

 

	
A Finance Party may set off any matured or un-matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured or un-matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

	  	
(b)

 

	
Each Borrower and Guarantor hereby agrees and accepts that this Clause 31 (Set-off) shall constitute a waiver of the provisions of Section 29 of the FA Act and further agrees and accepts, to the extent permitted by law that Section 29 of the FA Act shall not apply to this Agreement.

 

	
32.

 

	
NOTICES

 

	
32.1

 

	
Communications in writing

 

	  	
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by e-mail, fax or letter.

 

	
32.2

 

	
Addresses

 

	  	
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

 

	  	
(a)

 

	
in the case of the Borrowers and the Guarantor;

 

	  	  	
c/o DHT Management AS

Haakon VII's gate 1

P.O. Box 2039 Vika

0125 Oslo, Norway

	 	 	
 

 

	  	
(b)

 

	
in the case of the Security Agent and Agent, that identified with its name below,

 

	  	  	
ABN AMRO Bank N.V:

Agency Syndicated Loans/PAC HQ8042

Gustav Mahlerlaan 10

1082 PP Amsterdam, The Netherlands

 

	  	  	
E-mail:  Iwan.Rahimbaks@nl.abnamro.com; Salima.Chaouaou@nl.abnamro.com;

	  	  	
Jessie.Chau@nl.abnamro.com; Yvonne.Souw-Portier@nl.abnamro.com

	  	  	  
	  	  	
Attn:   Iwan Rahimbaks / Yvonne Souw-Portier /Salima Chaouaou / Jessie Chau /

	  	  	  
	  	  	

and (for the Agent's loan administration matters):

ABN AMRO Bank N.V:

P.O. Box 283

1000 EA Amsterdam, The Netherlands

E-mail: Agency.Services.Nederland@nl.abnamro.com

Fax no.: +31 20 628 30 30

Attn: Agency Services Nederland (PAC AA8222)

	  	  	

  

	  	
or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days' notice.

 

 

 

  

80

 

 

 

	
32.3

 

	
Delivery

 

	  	
(a)

 

	
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

	  	  	
(i)

 

	
if by way of fax, when received in legible form; or

 

	  	  	
(ii)

 

	
if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

 

	  	  	
and, if a particular department or officer is specified as part of its address details provided under Clause 32.2 (Addresses), if addressed to that department or officer.

 

	  	
(b)

 

	
Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose).

 

	  	
(c)

 

	
All notices from or to an Obligor shall be sent through the Agent.

 

	  	
(d)

 

	
Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

 

	
32.4

 

	
Notification of address, e-mail and fax number

 

	  	
Promptly upon receipt of notification of an address, e-mail or fax number or change of address, e-mail or fax number pursuant to Clause 32.2 (Addresses) or changing its own address, e-mail or fax number, the Agent shall notify the other Parties.

 

	
32.5

 

	
Electronic communication

 

	  	
(a)

 

	
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

 

	  	  	
(i)

 

	
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

 

	  	  	
(ii)

 

	
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

	  	  	
(iii)

 

	
notify each other of any change to their address or any other such information supplied by them.

 

	  	
(b)

 

	
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

 

	
32.6

 

	
English language

 

	  	
(a)

 

	
Any notice given under or in connection with any Finance Document must be in English.

 

	  	
(b)

 

	
All other documents provided under or in connection with any Finance Document must be:

 

	  	  	
(i)

 

	
in English; or

 

 

 

  

81

 

 

 

	  	  	
(ii)

 

	
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

	
33.

 

	
CALCULATIONS AND CERTIFICATES

 

	
33.1

 

	
Accounts

 

	  	
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

	
33.2

 

	
Certificates and Determinations

 

	  	
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

	
33.3

 

	
Day count convention

 

	  	
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

 

	
34.

 

	
PARTIAL INVALIDITY

 

	  	
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

	
35.

 

	
REMEDIES AND WAIVERS

 

	  	
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

	
36.

 

	
AMENDMENTS AND WAIVERS

 

	
36.1

 

	
Required consents

 

	  	
(a)

 

	
Subject to Clause 36.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the relevant Obligors and any such amendment or waiver will be binding on all Parties.

 

	  	
(b)

 

	
The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.

 

	
36.2

 

	
Exceptions

 

	  	
(a)

 

	
An amendment or waiver that has the effect of changing or which relates to:

 

	  	  	
(i)

 

	
the definition of "Majority Lenders" in Clause 1.1 (Definitions);

 

	  	  	
(ii)

 

	
an extension to the date of payment of any amount under the Finance Documents;

 

	  	  	
(iii)

 

	
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

 

 

 

  

82

 

 

 

	  	  	
(iv)

 

	
an increase in or an extension of any Commitment;

 

	  	  	
(v)

 

	
any provision which expressly requires the consent of all the Lenders;

 

	  	  	
(vi)

 

	
Clause 2.2 (Finance Parties' rights and obligations), Clause 25 (Changes to the Lenders) or this Clause 36 (Amendments and waivers);

 

	  	  	
(vii)

 

	
the nature or scope of the guarantee and indemnity granted under Clause 18 (Guarantee, Indemnity and Joint and Several Liability);

 

	  	  	
(viii)

 

	
release of any Security created by the Security Documents unless permitted under the Finance Documents or undertaken by the Agent acting on instruction of the Majority Lenders following an Event of Default which is continuing;

 

	  	  	
(ix)

 

	
change to any Obligor;

 

	  	  	
(x)

 

	
governing law and jurisdiction;

 

	  	  	
(xi)

 

	
the manner in which the proceeds after enforcement are being applied; or

 

	  	  	
(xii)

 

	
any change to the Security Documents

 

	  	  	
shall not be made without the prior consent of all the Lenders.

 

	  	
(b)

 

	
An amendment or waiver which relates to the rights or obligations of the Agent or any Mandated Lead Arranger (each in their capacity as such) may not be effected without the consent of the Agent or, as the case may be, the relevant Mandated Lead Arranger.

 

	  	
(c)

 

	
An amendment or waiver which relates to the rights or obligations of a Hedging Bank (each in its capacity as such) may not be effected without the consent of the relevant Hedging Bank.

 

	
37.

 

	
CONFIDENTIALITY

 

	
37.1

 

	
Confidential information

 

	  	
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 37.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

	
37.2

 

	
Disclosure of Confidential Information

 

	  	
Any Finance Party may disclose:

 

	  	
(a)

 

	
to any of its Affiliates and Related Funds any of its or their officers, directors, employees, professional advisers, auditors, partners and representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information, except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

 

 

  

83

 

 

 

	  	
(b)

 

	
to any person:

 

	  	  	
(i)

 

	
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, representatives and professional advisers;

 

	  	  	
(ii)

 

	
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Obligors and to any of that person's Affiliates, Related Funds, representatives and professional advisers;

 

	  	  	
(iii)

 

	
appointed by any Finance Party or by a person to whom paragraph b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph b) of Clause 27.13 (Relationship with the Lenders));

 

	  	  	
(iv)

 

	
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph b)(i) or b)(ii) above;

 

	  	  	
(v)

 

	
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

 

	  	  	
(vi)

 

	
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

 

	  	  	
(vii)

 

	
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security Interest (or may do so) pursuant to Clause 25.8 (Security over Lenders' rights) ;

 

	  	  	
(viii)

 

	
 who is a Party; or

 

	  	  	
(ix)

 

	
with the consent of the Obligors;

 

	  	
in each case, such Confidential Information as that Finance Party shall consider appropriate if:

 

	  	  	  	
(A)      in relation to paragraphs b)(i), b)(ii) and b(iii) above, the person to whom the Confidential Information is to be given has entered into a confidentiality undertaking except that there shall be no requirement for a confidentiality undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

	  	  	  	
(B)      in relation to paragraph b)(iv) above, the person to whom the Confidential Information is to be given has entered into a confidentiality undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

	  	  	  	
(C)      in relation to paragraphs b)(v), b)(vi) and b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

 

 

 

  

84

 

 

 

	  	
(c)

 

	
to any person appointed by that Finance Party or by a person to whom paragraph b)(i) or b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master confidentiality undertaking for Use With Administration/ Settlement Service Providers or such other form of confidentiality undertaking agreed between the Obligors and the relevant Finance Party;

 

	  	
(d)

 

	
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information;

 

	  	
(e)

 

	
as set out in Clause 25.7 of this Agreement.

 

	
37.3

 

	
Disclosure to numbering service providers

 

	  	
(a)

 

	
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Obligors the following information:

 

	  	  	
(i)

 

	
name of the Obligors;

 

	  	  	
(ii)

 

	
country of domicile of the Obligors;

 

	  	  	
(iii)

 

	
place of incorporation of the Obligors;

 

	  	  	
(iv)

 

	
date of this Agreement;

 

	  	  	
(v)

 

	
the names of the Agent and the Arranger;

 

	  	  	
(vi)

 

	
date of each amendment and restatement of this Agreement;

 

	  	  	
(vii)

 

	
amount of Total Commitments;

 

	  	  	
(viii)

 

	
currencies of the Facility;

 

	  	  	
(ix)

 

	
type of Facility;

 

	  	  	
(x)

 

	
ranking of Facility;

 

	  	  	
(xi)

 

	
the Final Maturity Date;

 

	  	  	
(xii)

 

	
changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and

 

	  	  	
(xiii)

 

	
such other information agreed between such Finance Party and the Borrower,

 

 

 

  

85

 

 

 

	  	  	
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

	  	
(b)

 

	
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

 

	  	
(c)

 

	
The Obligors represent that none of the information set out in paragraphs (i) to (xiii) of paragraph a) above is, nor will at any time be, unpublished price-sensitive information.

 

	
37.4

 

	
Entire agreement

 

	  	
This Clause 37 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

	
37.5

 

	
Inside information

 

	  	
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

	
37.6

 

	
Notification of disclosure

 

	  	
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

 

	  	
(a)

 

	
of the circumstances of any disclosure of Confidential Information made pursuant to paragraph b)(ii) of Clause 37.2 (Disclosure of Confidential Information), except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

	  	
(b)

 

	
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 37 (Confidentiality).

 

	
37.7

 

	
Continuing obligations

 

	  	
The obligations in this Clause 37 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:

 

	  	
(a)

 

	
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

 

	  	
(b)

 

	
the date on which such Finance Party otherwise ceases to be a Finance Party.

 

	
38.

 

	
COUNTERPARTS

 

	  	
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

 

 

  

86

 

 

 

	
39.

 

	
CONFLICT

 

	  	
In case of conflict between the Security Documents and this Agreement, the provisions of this Agreement shall prevail, provided however that this will not in any way be interpreted or applied to prejudice the legality, validity or enforceability of any Security Document.

 

 

 

  

87

 

SECTION 12

GOVERNING LAW AND ENFORCEMENT

 

	
40.

 

	
GOVERNING LAW

 

	  	
This Agreement is governed by Norwegian law.

 

	
41.

 

	
ENFORCEMENT

 

	
41.1

 

	
Jurisdiction

 

	  	
(a)

 

	
The courts of Norway, the venue to be Oslo city court (in Norwegian: Oslo tingrett) have jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement (a "Dispute").

 

	  	
(b)

 

	
The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

	  	
(c)

 

	
This Clause 40.1 (Jurisdiction) is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

 

	
41.2

 

	
Service of process

 

	  	
Without prejudice to any other mode of service allowed under any relevant law, each Borrower and Guarantor:

 

	  	
(a)

 

	
irrevocably appoints DHT Management AS, Haakon VII's gate 1, P.O. Box 2039 Vika, 0125 Oslo, Norway as its agent for service of process in relation to any proceedings before the Norwegian courts in connection with any Finance Document; and

 

	  	
(b)

 

	
agrees that failure by a process agent to notify the relevant Borrower and/or Guarantor of the process will not invalidate the proceedings concerned.

 

	  	
If any process agent appointed shall cease to exist for any reason where process may be served, each Borrower or Guarantor will forthwith appoint another process agent with an office in Norway where process may be served and will forthwith notify the Agent thereof.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

  

88

 

 

SCHEDULE 1

The Original Lenders

 

 

	
Name of Original Lender:

 

	
Commitment:

	
 

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7 EB

United Kingdom

	
 

Up to USD 47,000,000

	  	  
	
ABN AMRO BANK N.V. Oslo Branch

	
Up to USD 47,000,000

	 	 
	Olav Vs gate 5 

0161 Oslo

	 
	 	 
	

Nordea Bank Norge ASA

Middelthunsgate 17

0368 Oslo

Norway

	
Up to USD 47,000,000

 

 

 

 

	 	
Total up to USD 141,000,000 

 

 

  

  

 

SCHEDULE 2

Conditions Precedent

Part I

 

Condition Precedent signing of Agreement

 

	
  

	
 

	
(Borrowers' document only to be provided upon signing of an Accession Letter)

 

	
  

	
1.

	
Borrowers and Guarantor

 

	
  

	
(a)

	
Certified copies of the constitutional documents of the relevant company.

 

	
  

	
(b)

	
Certificate of Incorporation, extract from the relevant Company Registry and/or updated Certificate of Good Standing;

 

	
  

	
(c)

	
A certified copy of a resolution of the board of directors, and if required by the Agent shareholders resolutions, of the relevant company:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, the Finance Documents and any Hedging Agreement to which it is a party and resolving that it execute the Finance Documents and any Hedging Agreement to which it is a party;

 

	
  

	
(ii)

	
authorising a specified person or persons to execute the Finance Documents and any Hedging Agreement to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents and any Hedging Agreement to which it is a party.

 

	
  

	
(d)

	
A copy of the passports of any Director of the relevant company and of each other person signing any Finance Documents and any Hedging Agreement, and  specimen of the signature of such persons if not evidenced by the passport copy;

 

	
  

	
(e)

	
An original Power of Attorney (notarised and legalised if requested by the Agent);

 

	
  

	
(f)

	
Evidence of the shareholder structure of the Borrowers and the 10 largest shareholders of the Guarantor based on latest publicly available filings; and

 

	
  

	
(g)

	
A certificate of an authorised signatory of the relevant company setting out the name of the Directors of the relevant Obligor certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

	
  

	
2.

	
Authorisations

 

	
  

	
All approvals, authorisations and consents required by any government or other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the other  Transaction Documents to which they are respective parties.

 

	
  

	
3.

	
Finance Documents

 

	
  

	
(a)

	
The Agreement;

 

	
  

	
(All Finance Documents to be delivered in original).

 

 

  

  

 

 

 

	
  

	
4.

	
Vessel Documents

 

	
  

	
(a)

	
Copy of the Shipbuilding Contracts;

 

	
  

	
5.

	
Legal opinions

 

	
  

	
(a)

	
If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement; and

 

	
  

	
(b)

	
Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

 

	
  

	
6.

	
Other documents and evidence

 

	
  

	
(a)

	
Evidence that any process agent referred to in Clause 40.2 (Service of process), if not an Obligor, has accepted its appointment;

 

	
  

	
(b)

	
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Guarantor accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document;

 

	
  

	
(c)

	
Evidence that all instalments due under the Shipbuilding Contracts prior to signing of the Agreement have been paid;

 

	
  

	
(d)

	
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the date hereof; and

 

	
  

	
(e)

	
Any other documents as reasonably requested by the Agent, hereunder any additional documentation required for any Finance Party to comply with their Know Your Customer requirements;

 

 

Part II

 

Condition Precedent Utilisation

 

	
  

	
1.

	
Borrowers and Guarantor

 

	
  

	
(a)

	
Certified copies of the constitutional documents of the relevant company;

 

	
  

	
(b)

	
Certificate of Incorporation, extract from the relevant Company Registry and/or updated Certificate of Good Standing;

 

	
  

	
(c)

	
A certified copy of a resolution of the board of directors, and if required by the Agent shareholders resolutions, of the relevant company:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, the Finance Documents and any Hedging Agreement to which it is a party and resolving that it execute the Finance Documents and any Hedging Agreement to which it is a party;

 

 

  

  

 

 

 

	
  

	
(ii)

	
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.

 

	
  

	
(d)

	
A copy of the passports of any Director of the relevant company and of each other person signing any Finance Documents, and specimen of the signature of such persons if not evidenced by the passport copy;

 

	
  

	
(e)

	
An original Power of Attorney (notarised and legalised if requested by the Agent);

 

	
  

	
(f)

	
Evidence of the shareholder structure of the Borrowers and the 10 largest shareholders of the Guarantor based on latest publicly available filings; and

 

	
  

	
(g)

	
A certificate of an authorised signatory of the relevant company setting out the name of the Directors of the relevant Obligor certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

	
  

	
2.

	
Authorisations

 

	
  

	
All approvals, authorisations and consents required by any government or other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the other  Transaction Documents to which they are respective parties.

 

	
  

	
3.

	
Finance Documents

 

	
  

	
(a)

	
The Mortgages;

 

	
  

	
(b)

	
The Assignment Agreement;

 

	
  

	
(c)

	
A Notice of Assignment of Insurances and acknowledgement thereof or standard letters of undertaking;

 

	
  

	
(d)

	
A Notice of Assignment of Earnings and acknowledgement thereof;

 

	
  

	
(e)

	
The Pledge of Earnings Accounts;

 

	
  

	
(f)

	
The Pledge of Shares with the notices, transcripts and evidence required thereunder;.

 

	
  

	
(g)

	
Any Deed of Assignment and the notices and acknowledgements required thereunder; and

 

	
  

	
(h)

	
Any Intra Group Loans Assignment Agreement the notices, transcripts and evidence required thereunder.

 

	
  

	
(All Finance Documents to be delivered in original).

 

	
  

	
4.

	
Documents relating to the Vessels

 

	
  

	
(a)

	
A certified copy of the Builder Certificate;

 

	
  

	
(b)

	
Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the Vessels in accordance with Clause 23.2 (Insurances - Vessels), and evidencing that the Agent's Security in the insurance policies have been noted in accordance with the relevant notices as required under the Assignment Agreement;

 

 

  

  

 

 

 

	
  

	
(c)

	
A certified copy of the Protocol of Delivery and Acceptance under the relevant Shipbuilding Contract;

 

	
  

	
(d)

	
A certified copy of any Charterparty;

 

	
  

	
(e)

	
A copy of the current DOC;

 

	
  

	
(f)

	
A certified copy of any Technical Management Agreement;

 

	
  

	
(g)

	
A certified copy of any Commercial Management Agreement;

 

	
  

	
(h)

	
A survey report in respect of each Vessel;

 

	
  

	
(i)

	
A certified copy of updated confirmations of class (or equivalent) in respect of the Vessels from the relevant classification society, confirming that the Vessels are classed in accordance with Clause 23.4 (Classification and repairs), free of extensions and overdue recommendations;

 

	
  

	
(j)

	
A copy of the Vessels’ current SMC;

 

	
  

	
(k)

	
A copy of the Vessels’ ISSC; and

 

	
  

	
(l)

	
Updated valuation certificates in respect of each of the Vessels issued no more than thirty (30) days prior to the relevant Utilisation Date.

 

	
  

	
The following documents to be received by the Agent latest on the relevant Utilisation Date:

 

	
  

	
(m)

	
Evidence (by way of transcript of registry) that the Vessels are registered in the name of the relevant Borrower in an Approved Ship Registry acceptable to the Agent, that the Mortgages have been, or will in connection with Utilisation of the Facility be, executed and recorded with their intended first priority against the relevant Vessel and that no other encumbrances, maritime liens, mortgages or debts whatsoever are registered against the Vessels.

 

	
  

	
5.

	
Legal opinions

 

	
  

	
The following documents to be received by the Agent latest on the Utilisation Date:

 

	
  

	
(a)

	
If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement;

 

	
  

	
(b)

	
If any Mortgaged Asset is situated in a jurisdiction other than Norway, or any Finance Document is subject to any other choice of law than Norwegian law, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement; and

 

	
  

	
(c)

	
Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

 

 

  

  

 

 

	
  

	
6.

	
Other documents and evidence

 

	
  

	
(a)

	
Evidence that any process agent referred to in the Security Documents , if not a Party to this Agreement, has accepted its appointment;

 

	
  

	
(b)

	
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document;

 

	
  

	
(c)

	
A Utilisation Request at least three (3) Business Days prior to the Utilisation Date;

 

	
  

	
(d)

	
Evidence that all instalments due under the relevant Shipbuilding Contract prior to the Utilisation Date have been paid;

 

	
  

	
(e)

	
A favourable opinion from the Agent's insurance consultants at the expense of the Borrowers confirming that the required insurances have been placed and are acceptable to the Agent and that the underwriters are acceptable to the Agent;

 

	
  

	
(f)

	
An original Compliance Certificate confirming that the Borrowers and the Guarantor are in compliance with the financial covenants as set out in Clause 21 (Financial covenants);

 

	
  

	
(g)

	
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the Utilisation Date;

 

	
  

	
(h)

	
Any agreements in respect of Intra Group Loans and evidence that they are subordinated to the obligations of the Borrowers under the Finance Documents and any Hedging Agreements;

 

	
  

	
(i)

	
Manager’s undertakings from the Technical Manager and the Commercial Manager in such form as the Agent may require; and

 

	
  

	
(j)

	
Any other documents as reasonably requested by the Agent, hereunder any additional documentation required for any Finance Party to comply with their Know Your Customer requirements.

 

  

  

 

SCHEDULE 3

 

PART I

 

Utilisation Request

 

From:   [                                 ], [                                 ] and [                                 ]

 

To:       ABN AMRO BANK N.V.

 

Dated:

 

Dear Sirs

 

[                        ], [                              ] and[                          ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
  

	
1.

	
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

	
  

	
2.

	
We wish to borrow the Loan on the following terms:

 

	
Proposed Utilisation Date:

	
[ ] (or, if that is not a Business Day, the next 

Business Day)

	
Amount:

	
[ ] or, if less, the Available Facility

	
  

	
3.

	
We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request.

 

	
  

	
4.

	
The proceeds of this Loan should be credited to [account].

 

	
  

	
5.

	
This Utilisation Request is irrevocable.

 

Yours faithfully

 

 

.......................................

authorised signatory for

[                           ], [                           ] and [                           ]

 

  

  

 

Part II

 

Selection Notice

 

From:   [                           ], [                           ] and [                           ]

 

To:       [name of Agent]

 

Dated:

 

Dear Sirs

 

[                           ], [                           ] and[                           ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
  

	
1.

	
We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

 

	
  

	
2.

	
We refer to the [Loan] [Tranche in respect of the Vessel [    ]] with an Interest Period ending on [               ].

 

	
  

	
3.

	
We request that the next Interest Period for the [Loan] [above Tranche] is [      ].

 

	
  

	
4.

	
This Selection Notice is irrevocable.

 

Yours faithfully

 

.....................................

authorised signatory for

[name of Borrowers]

 

  

  

 

 

SCHEDULE 4

Form of Transfer Certificate

 

 

To:       ABN AMRO BANK N.V. as Agent

 

	
From:

	
[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

 

Dated:

 

[                           ], [                           ]and [                            ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

	
  

	
1.

	
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

	
  

	
2.

	
We refer to Clause 25.4 (Procedure for transfer):

 

	
  

	
(a)

	
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with Clause 25.4 (Procedure for transfer).

 

	
  

	
(b)

	
The proposed Transfer Date is [ ].

 

	
  

	
(c)

	
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 32.2 (Addresses) are set out in the Schedule.

 

	
  

	
3.

	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 25.3 (Limitation of responsibility of Existing Lenders).

 

	
  

	
4.

	
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

	
  

	
5.

	
This Transfer Certificate is governed by Norwegian law.

 

	
  

	
6.

	
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

 

  

  

 

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments,]

	
[Existing Lender]

	
[New Lender]

	 	 
	
By:

	
By:

 

This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [         ].

 

[Agent]

 

By:

 

  

  

 

SCHEDULE 5

Form of Compliance Certificate

 

To:       ABN AMRO BANK N.V.  as Agent

 

From:   [                                           ], [                                ]  and[],

 

Dated:

 

Dear Sirs

 

[                                ], [                                ] and [                                           ] – USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

	
2.

	
We confirm that as of [insert date] the Guarantor has on a consolidated basis:

 

	
 

	
The Guarantor has on a consolidated basis (Clause 21.1):

 

a)       Minimum Value Adjusted Tangible Net Worth

 

	 	Requirement:	Value Adjusted Tangible Net Worth of at least USD 100,000,000, 

but the Value Adjusted Tangible Net Worth shall in any event 

minimum 25 % of the Value Adjusted Total Assets

	 	 	 
	 	Value Adjusted Tangible Net Worth*	USD................
	 	 	 
	 	Value Adjusted Total Assets*	USD................
	 	 	 
	 	In Compliance         Yes/No
	 	 	 
	*) as per enclosed calculations	 

 

 

b)       Minimum Cash

 

	 	Requirement:	

The higher of USD 20,000,000 and 6 % of the Total Interest Bearing Debt

	 	 	 
	 	Minimum Cash*	USD................/........%
	 	 	 
	 	Total Interest Bearing Debt*	USD................/........%
	 	 	 
	*) as per enclosed calculations	 
	 	 	 
	 	 	 
	 	 	 
	 	In Compliance         Yes/No 
	 	 	 

 

  

  

 

 

 

d)       Working Capital

 

	 	Requirement:	

Positive

	 	 	 
	 	Current Assets	USD................, less
	 	 	 
	 	Current Debt	USD................
	 	 	 
	 	In Compliance         Yes/No 

 

 

	
3.

	
We confirm that as of [insert date] the Borrowers have (Clause 21.2):

 

 

Working Capital

 

	 	Requirement:	

Positive

	 	 	 
	 	Current Assets	USD................, less
	 	 	 
	 	Current Debt	USD................
	 	 	 
	 	In Compliance         Yes/No 

 

	
4.

	
We confirm that no Default is continuing.

 

 

Please find enclosed a copy of our financial statements, together with updated valuation certificates in respect of the Vessels and a statement by the Borrowers’ management giving a fair opinion of the Vessels’ Market Value, the market conditions, a market view and the market outlook, as per [                 ] 20[   ].

 

 

 

Yours faithfully

 

 

	..................................... 	  ..................................... 	  .....................................
	 	 	 
	authorised signatory for	 authorised signatory for	  authorised signatory for
	   	 	 
	[                               ]	[                                          ]	[                                          ]
	 	 	 

 

  

  

 

 

 

SCHEDULE 6

Form of accession letter

 

ACCESSION LETTER

 

Dated:  [                      ]

 

 

USD 141,000,000 TERM LOAN FACILITY AGREEMENT DATED 22 JULY 2014 (THE "AGREEMENT")

 

 

	
  

	
1.

	
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning when used in this Accession Letter.

 

	
  

	
2.

	

By its signature hereto, [                                ], reg. no. [      ], incorporated under the laws of [                    ] hereby agrees to become a Borrower under the Agreement and the Security Documents with effect from the date hereof, and to be bound by the terms of the Agreement and the Security Documents as a Borrower. [                    ] hereby undertakes and agrees to sign and execute such additional Security Documents as may be required under the Agreement.

	
  

	
3.

	
By their signatures hereto, each of the Borrowers, the Guarantor, the Lenders, the Mandate Lead Arrangers, the Agent, the Security Agent and the Hedging Banks accepts the accession of the Borrower to the Agreement.

 

	
  

	
4.

	
Each of the Borrowers and the Guarantor hereby confirms, agrees and undertakes its joint and several liabilities in accordance with Clause 18 of the Agreement.

 

	
  

	
5.

	
[                     ] address is [                                           ].

 

	
  

	
6.

	

The Borrowers hereby confirm that no Default is continuing or would occur as a result of [                       ] becoming a Borrower.

 

	
  

	
7.

	

[                     ] confirm that all representations and warranties in Clause 19 (Representations) are correct as of the date hereof.

 

	
  

	
8.

	
The following amendments shall be made to the Agreement with effect from the accession of the new Borrower: [    ].

 

	
  

	
9.

	
This Accession Letter is governed by Norwegian law. Clauses 39 and 40 of the Agreement apply to this Accession Letter, and the Additional Borrower hereby appoints the process agent described in Clause 40.2 of the Agreement.

 

 

	
Borrower:

	
Guarantor:

	 	 
	
[                                   ]

	

DHT HOLDING INC.

	 	 
	
By: _____________________________________________

	
By: ______________________________________________

	 	 
	
Name: 

	
Name:

	 	 
	
Title: 

	
Title:

 

  

  

 

                                                                  

 

 

	
Lender:

	
Lender:

	 	 
	
DVB BANK SE

	

ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: _____________________________________________

	
By: ______________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Lender:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By: _____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

 

	
Mandated Lead Arranger:

	
Mandated Lead Arranger:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Mandated Lead Arranger:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By:_____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

  

  

 

 

 

	
Hedging Bank:

	
Hedging Bank:

	 	 
	
ABN AMRO BANK N.V.

	
DVB BANK SE

	  	  
	  	  
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Hedging Bank:

	  
	 	 
	
NORDEA BANK FINLAND PLC.

	  
	  	  
	 	 
	
By: _____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

	
Agent:

	
Security Agent:

	 	 
	
ABN AMRO BANK N.V.

	
ABN AMRO BANK N.V.

	  	  
	 	 
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

  

  

 

 

EXECUTION PAGE

 

 

	
Guarantor:

	  
	 	 
	
DHT HOLDING INC.

	  
	  	  
	 	 
	
By: ___/s/ Eirik Ubøe______________________________

	  
	 	 
	
Name:     

	
Eirik Ubøe

	  
	 	 
	Title:     	
CFO

	  

 

 

	
Original Lender:

	
Original Lender:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	Title:     	
Attorney-in-Fact

	Title:     	
Attorney-in-Fact

 

 

	
Original Lender:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	  
	 	 
	
Name:     

	
Erland Lous

	  
	 	 
	
Title:     

	
Attorney-in-Fact

	  

 

 

	
Mandated Lead Arranger:

	
Mandated Lead Arranger:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:      

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	
Title:     

	

Attorney-in-Fact

	
Title:     

	

Attorney-in-Fact

 

 

  

  

 

 

	
Mandated Lead Arranger:

	 
	 	 
	
NORDEA BANK NORGE ASA

	 
	 	 
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	 
	 	 
	
Name:     

	

Erlend Lous

	 
	 	 
	Title:     	

Attorney-in-Fact

	 

 

 

	
Hedging Bank:

	
Hedging Bank:

	 	 
	
ABN AMRO BANK N.V.

	
DVB BANK SE

	 	 
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	
Title:     

	

Attorney-in-Fact

	
Title:      

	

Attorney-in-Fact

 

 

 

	Hedging Bank: 	 
	 	 
	NORDEA BANK FINLAND PLC.	 
	  	  
	 	 
	
By: ____/s/ Erlend Lous____________________________

	  
	 	 
	
Name:     

	

Erlend Lous

	  
	 	 
	
Title:

	

Attorney-in-Fact

	  

 

 

	
Agent:

	
Security Agent:

	 	 
	
ABN AMRO BANK N.V.

	
ABN AMRO BANK N.V.

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	

Erlend Lous

	
Name:     

	

Erlend Lous

	 	 
	Title:     	

Attorney-in-Fact

	
Title:     

	

Attorney-in-Factex4-1_9.htm

Exhibit 4.1.9

 

 

 

 

 

DATED 17 October 2006

SAMCO GAMMA LTD.

(as borrower)

- and -

CALYON

(as lender)

_______________________________________

$49,000,000 SECURED

LOAN FACILITY AGREEMENT

________________________________________

STEPHENSON HARWOOD

One St. Paul’s Churchyard

London EC4M 8SH

Tel: 020 7329 4422

Fax: 020 7329 7100

Ref: 1251/822/01-45-00454

 

 

 

  

  

  

 

CONTENTS

	  	  	
Page

	
1

	
Definitions and Interpretation

	
1

	
2

	
The Loan and its Purpose

	
15

	
3

	
Conditions Precedent and Subsequent

	
17

	
4

	
Representations and Warranties

	
24

	
5

	
Repayment and Prepayment

	
27

	
6

	
Interest

	
30

	
7

	
Fees

	
34

	
8

	
Security Documents

	
34

	
9

	
Covenants

	
35

	
10

	
Earnings Account and Retention Accounts

	
42

	
11

	
Events Of Default

	
44

	
12

	
Set-Off And Lien

	
48

	
13

	
Assignment and Sub-Participation

	
49

	
14

	
Payments, Mandatory Prepayment, Reserve Requirements and Illegality

	
50

	
15

	
Communications

	
56

	
16

	
General Indemnities

	
56

	
17

	
Miscellaneous

	
60

	
18

	
Law and Jurisdiction

	
64

	
APPENDIX A

	
         66

	  	
Drawdown Notice

	
         66

	
APPENDIX B

	
67

	  	
Instalments

	
67

	
APPENDIX C

	
68

	
APPENDIX D

	
69

	  	
Irrevocable Payment Letter

	
69

	  	
(on Calyon headed notepaper)

	
69

 

 

  

  

  

 

 

LOAN AGREEMENT

 

	
Dated:  17 October 2006

 

BETWEEN:-

 

	
(1)

	
SAMCO GAMMA LTD. which is a company incorporated according to the law of the Cayman Islands with registered office at Clifton House, 75 Fort Street, George Town, Grand Cayman, Cayman Islands (the “Borrower”); and

 

	
(2)

	
CALYON, a French “société anonyme” having a share capital of EUR 3,435,953,121 and its registered office at 9, quai du President Paul Doumer, 92920 Paris La Defense Cedex, France and registered under the number siren 304187701 at the Registre du commerce et des Sociétés of Nanterre, France acting as lender and/or Swap Provider (as the case may be) (the “Lender”).

 

WHEREAS:-

 

	
(A)

	
The Borrower has contracted with the Builder to purchase and take delivery of a 320,000 Dwt VLCC having Builder’s hull no. S273 pursuant to a shipbuilding contract dated 19 January 2004 as amended by an addendum No 1 dated 19 January 2004.

 

	
(B)

	
Upon delivery the Vessel will be registered in the ownership of the Borrower under Marshall Islands flag or under such other flag as may be approved by the Lender.

 

	
(C)

	
Subject to and upon the terms and conditions contained in this Agreement, the Lender has agreed to advance to the Borrower, an amount not exceeding forty nine million Dollars ($49,000,000) for the purpose of assisting the Borrower in financing part of the Contract Price payable under the Contract.

 

IT IS AGREED as follows:-

 

	
1

	
Definitions and Interpretation

 

1.1          Definitions

 

               In this Agreement:-

 

  

  

  

 

 

	
  

	
1.1.1

	
“Acceptable Charter” means a time charter of the Vessel for a minimum period of twelve (12) months with an independent third party charterer acceptable to the Lender and on terms approved by the Lender.

 

	
  

	
1.1.2

	
“Acceptable Charter Delivery Date” means the date on which the Vessel is delivered and accepted for service under an Acceptable Charter.

 

	
  

	
1.1.3

	
“Accounts” means together the Earnings Account and the Retention Account.

 

	
  

	
1.1.4

	
“Account Pledges” means each Account Pledge referred to in Clause 8.2.3.

 

	
  

	
1.1.5

	
“Acknowledgement” means the acknowledgement in the form set forth in the Contract Assignment executed or to be executed by the Builder.

 

	
  

	
1.1.6

	
“Address for Service” means Paxton House, 30 Artillery Lane, London E1 7LS (fax: + 44 207 375 3636) or, in relation to any of the Security Parties, such other address in England and Wales as that Security Party may from time to time designate by no fewer than ten days’ written notice to the Lender.

 

	
  

	
1.1.7

	
“Administration” means the Government of the State whose flag the Vessel is entitled to fly as set out in paragraph 1.1.3 of the ISM Code.

 

	
  

	
1.1.8

	
“Advance Date” means the date on which a Drawing is advanced by the Lender to the Borrower pursuant to Clause 2.

 

	
  

	
1.1.9

	
“Annex VI” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978 relating thereto (MARPOL 73/78) (as amended and as amended by the protocol of 1997 (Annex VI) which sets out the limits on sulphur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances.

 

	
  

	
1.1.10

	
“Assignment” means the deed of assignment of any Acceptable Charter, the Insurances, Earnings and Requisition Compensation referred to in Clause 8.2.2.

 

 

  

2

  

 

	
  

	
1.1.11

	
“Availability Termination Date” means the earlier to occur of the Delivery Date and 31 January 2008 or such later date as the Lender may in its discretion agree (such agreement not to be unreasonably withheld).

 

	
  

	
1.1.12

	
“Balloon Amount” means twenty two million Dollars ($22,000,000) or such increased amount as may result from the addition to such balloon of deferred Repayment Instalments pursuant to Clause 5.9 as the same may be decreased by any prepayments.

 

	
  

	
1.1.13

	
“Break Costs” means all costs, losses, premiums or penalties incurred by the Lender in the circumstances contemplated by Clause 16.4, or as a result of it receiving any prepayment of all or any part of the Loan (whether pursuant to Clause 5 or otherwise), or any other payment under or in relation to the Security Documents on a day other than the due date for payment of the sum in question, and includes (without limitation) any losses or costs incurred in liquidating or re-employing deposits from third parties acquired to effect or maintain the Loan and any liabilities, expenses or losses incurred by the Lender as Swap Provider in terminating or reversing, or otherwise in connection with, any Hedging Transaction or any other interest rate and/or currency swap, transaction or arrangement entered into by the Lender as Swap Provider to hedge any exposure arising under this Agreement.

 

	
  

	
1.1.14

	
“Break Gains” means all gains realised by the Lender as Swap Provider in terminating or reversing, or otherwise in connection with, any Hedging Transaction or any other interest rate and/or currency swap, transaction or arrangement entered into by the Lender as Swap Provider to hedge any exposure arising under this Agreement.

 

	
  

	
1.1.15

	
“Builder” means together Hyundai Heavy Industries Co., Ltd., a company organised and existing under the laws of the Republic of Korea having its registered office at 1 Cheonha-Dong, Dong Ku, Ulsan Korea and Hyundai Samho Heavy Industries Co., Ltd., a company organised and existing under the laws of the Republic of Korea having its registered office at 1700 Yongdang-Ri, Samho-Myun, Youngam-Gun, Chollanam-Do, Korea.

 

  

3

  

 

 

	
  

	
1.1.16

	
“Business Day” means a day on which banks are open for the transaction of business of the nature contemplated by this Agreement (and not authorised by law to close) (i) in New York City, United States of America; London, England; Paris, France and any other financial centre which the Lender may consider appropriate for the operation of the provisions of this Agreement and (ii) in Jeddah, Saudi Arabia for the purposes only of sending to or receiving from the Corporate Guarantor any Communications.

 

	
  

	
1.1.17

	
“Charterer” means a charterer under an Acceptable Charter.

 

	
  

	
1.1.18

	
“Charter Acknowledgement” means the acknowledgement to the notice of assignment of an Acceptable Charter to be executed by a Charterer in the form set forth in the Assignment.

 

	
  

	
1.1.19

	
“Commitment Commission” means the commitment commission to be paid by the Borrower to the Lender pursuant to Clause 7.1.

 

	
  

	
1.1.20

	
a “Communication” means any notice, approval, demand, request or other communication from one party to this Agreement to the other party to this Agreement.

 

	
  

	
1.1.21

	
“Communications Address” means Appleby Corporate Services (Cayman) Limited, Clifton House 75 Fort Street George Town, PO Box 1350 GT, Grand Cayman, Cayman Islands fax no: + (345) 949 4901 or such other address for receipt of Communications as may be notified in writing by the Borrower to the Lender.

 

	
  

	
1.1.22

	
a “Confirmation” means a letter of confirmation issued or to be issued (as the case may be) in relation to a Hedging Transaction, by the Lender as Swap Provider to the Borrower as contemplated by the Hedging Agreement and to be acknowledged (or deemed acknowledged) by the Borrower in accordance with the provisions of Part 5(m) of the Schedule incorporated in the Hedging Agreement.

 

	
  

	
1.1.23

	
“Contract Assignment” means the deed of assignment of the Contract referred to in Clause 8.1.1.

 

 

  

4

  

 

 

	
  

	
1.1.24

	
“Contract Price” means the final price payable by the Borrower to the Builder for the cost of construction and delivery of the Vessel under the Contract, such sum being approximately seventy nine million Dollars ($79,000,000).

 

	
  

	
1.1.25

	
“Contract” means the shipbuilding contract referred to in Recital (A).

 

	
  

	
1.1.26

	
“Corporate Guarantee” means the guarantee and indemnity of the Corporate Guarantor referred to in Clause 8.1.2.

 

	
  

	
1.1.27

	
“Corporate Guarantor” means Saudi Maritime Holding Company of Bakhsh Building, Medina Road, Qadat Al Fekr Street, Besides Adwani Gardens, Jeddah, the Kingdom of Saudi Arabia.

 

	
  

	
1.1.28

	
“Currency of Account” means, in relation to any payment to be made to the Lender under or pursuant to any of the Security Documents, the currency in which that payment is required to be made by the terms of the relevant Security Document.

 

	
  

	
1.1.29

	
“Default Rate” means the rate determined by the Lender as being two per centum (2%) per annum above either the interest rate otherwise applicable or the aggregate of the Margin and the cost to the Lender of obtaining funds in amount similar to the amount of the Indebtedness or any relevant part of the Indebtedness for such periods as the Lender shall determine in its reasonable discretion.

 

	
  

	
1.1.30

	
“Deferral Option Date means in relation to each exercise of the deferral option in accordance with Clause 5.9, the Repayment Date occurring first in chronological  order specified in the notice of exercise of that option as a date on which there will be a deferral of part of a Repayment Instalment.

 

	
  

	
1.1.31

	
“Deferral Option Notice Date” means the date on which the Lender receives written notice from the Borrower of its intention to defer part of one or more Repayment Instalments in accordance with Clause 5.9.

 

	
  

	
1.1.32

	
“Delivery Date” means the date on which the Vessel is actually delivered by the Builder to the Borrower pursuant to and in accordance with the Contract.

 

 

  

5

  

 

	
  

	
1.1.33

	
“Delivery Drawing” means the final Drawing to be advanced to finance part of the final Instalment specified in Appendix B.

 

	
  

	
1.1.34

	
“Designated Person” means the person or persons ashore, designated by the ISM Company, having direct access to the highest level of management of the ISM Company as set out in paragraph 4 of the ISM Code.

 

	
  

	
1.1.35

	
“DOC” means, in relation to the Borrower or the Managers, a valid Document of Compliance issued for that company by the Administration which complies with the requirements of the ISM Code as set out in paragraph 1.1.5 of the ISM Code.

 

	
  

	
1.1.36

	
“Dollars” and “$” each means available and freely transferable and convertible funds in lawful currency of the United States of America.

 

	
  

	
1.1.37

	
“Drawdown Notice” means a notice complying with Clause 2.3.

 

	
  

	
1.1.38

	
“Drawing” means a Drawing advanced by the Lender to the Borrower in accordance with Clause 2.2 to finance or reimburse payment of (as the case may be) the fourth, fifth and sixth Instalments as specified in Appendix B.

 

	
  

	
1.1.39

	
“Earnings” means all hires, freights, pool income and other sums payable to or for the account of the Borrower in respect of the Vessel including (without limitation) all hire, all sums due and payable under any Acceptable Charter, all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessel including, without limitation any Acceptable Charter.

 

	
  

	
1.1.40

	
“Earnings Account” means the bank account to be opened in the name of the Borrower with the Lender pursuant to Clause 10 for the receipt and application of Earnings in accordance with this Agreement.

 

 

  

6

  

 

	
  

	
1.1.41

	
“Encumbrance” means any mortgage, charge (fixed or floating), pledge, lien, assignment, hypothecation, preferential right, option, title retention or trust arrangement or any other agreement or arrangement which has the effect of creating security or payment priority.

 

	
  

	
1.1.42

	
“Event of Default” means any of the events set out in Clause 11.2.

 

	
  

	
1.1.43

	
“Facility Period” means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness and the Hedging Liabilities has been repaid in full and the Borrower has ceased to be under any further actual or contingent liability to the Lender under or in connection with the Security Documents.

 

	
  

	
1.1.44

	
“Hedging Agreement” means together the ISDA Master Agreement in 1992 cross border form (or any other form of master agreement relating to interest or currency exchange transactions) and the Schedule thereto made on the date hereof between the Borrower and the Lender as Swap Provider and each Confirmation pursuant thereto.

 

	
  

	
1.1.45

	
“Hedging Liabilities” means, at any relevant time, all liabilities of the Borrower to the Lender as Swap Provider under or pursuant to the Hedging Agreement whether actual or contingent, present or future.

 

	
  

	
1.1.46

	
a “Hedging Transaction” means a hedging transaction governed by the Hedging Agreement and entered into between the  Borrower and the Lender as Swap Provider for the express purpose of hedging all or part of the Borrower’s interest rate risk pursuant to this Agreement.

 

	
  

	
1.1.47

	
“IAPPC” means a valid International Air Pollution Prevention Certificate for the Vessel issued by the Administration pursuant to Annex VI.

 

	
  

	
1.1.48

	
“Indebtedness” means the Loan, all other sums of any nature (together with all interest on any of those sums) which from time to time may be payable by the Borrower to the Lender pursuant to the Security Documents (save for any Hedging Liabilities); any damages payable as a result of any breach by the Borrower of any of the Security Documents (apart from the Hedging Agreement) and any damages or other sums payable as a result of any of the obligations of the Borrower under or pursuant to any of the Security Documents (apart from the Hedging Agreement) being disclaimed by a liquidator or any other person, or, where the context permits, the amount thereof for the time being outstanding.

 

 

  

7

  

 

 

	
  

	
1.1.49

	
“Instalment” means any of the final three instalments of the Contract Price, which three instalments when aggregated with the first three instalments due under the Contract, constitute the Contract Price payable to the Builder for the Vessel as specified in Appendix B.

 

	
  

	
1.1.50

	
“Insurances” means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessel or her increased value or her Earnings and (where the context permits) all benefits thereof, including all claims of any nature and returns of premium.

 

	
  

	
1.1.51

	
“Interest Payment Date” means each date for the payment of interest in accordance with Clause 6.

 

	
  

	
1.1.52

	
“Interest Period” means each interest period selected by the Borrower or agreed by the Lender pursuant to Clause 6.

 

	
  

	
1.1.53

	
“ISM Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as set out in Chapter IX of the International Convention for the Safety of Life at Sea (SOLAS), 1974.

 

	
  

	
1.1.54

	
“ISM Company” means, at any given time, the company responsible for the operation of the Vessel who has assumed the duties and responsibilities imposed by the ISM Code and as defined in the ISM Code at paragraph 1.1.2.

 

	
  

	
1.1.55

	
“ISPS” Code” means the International Ship and Port Facility Security Code as set out in Chapter XI-2 of the Safely of Life at Sea Convention (SOLAS) 1974 (as amended).

 

	
  

	
1.1.56

	
“ISPS Company” means, at any given time, the company responsible for the operation of the Vessel who has assumed the duties and responsibilities imposed by the ISPS Code, as set out in Part A and Part B of the ISPS Code.

 

 

  

8

  

 

 

	
  

	
1.1.57

	
“ISSC” means a valid international ship security certificate or interim international ship security certificate for the Vessel issued under the provisions of Part A of the ISPS Code.

 

	
  

	
1.1.58

	
“law” means any existing applicable law, statute, treaty, convention, regulation, instrument or other subordinate legislation or other legislative or quasi-legislative rule or measure, or any order or decree of any government, judicial or public or other body or authority, or any directive, code of practice, circular, guidance note or other direction issued by any competent authority or agency (whether or not having the force of law) with which compliance is customary.

 

	
  

	
1.1.59

	
“LIBOR” means:

 

	
  

	
(a)

	
the applicable Screen Rate; or

 

	
  

	
(b)

	
(if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Lender in the London interbank market,

 

	
  

	
 

	
at or about 11.00 a.m. (London time) two (2) Business Days before the first day of the relevant Interest Period for the offering of deposits in Dollars in an amount comparable to the Loan (or any relevant part of the Loan) and for a period comparable to the relevant Interest Period.

 

	
  

	
1.1.60

	
“Loan” means the aggregate amount from time to time advanced by the Lender to the Borrower pursuant to Clauses 2.1 and 2.2 or, where the context permits, the amount advanced and for the time being outstanding.

 

	
  

	
1.1.61

	
“Managers” means Samco (Services) Ltd of Paxton House, 30 Artillery Lane, London E1 7LS or its successor within the Samco Group as administrative manager of the Vessel and TESMA Singapore Pte Ltd of 30 Old Toh Tuck Road #05-04, Sembawang Kimtrans Logistics Centre, Singapore 597654 as technical manager of the Vessel or such other managers as the Lender may in its discretion approve (such approval not to be unreasonably withheld).

 

 

  

9

  

 

 

	
  

	
1.1.62

	
“Management Agreement” means any agreement entered into between the Borrower and the Managers or either of them in relation to the provision of management services to the Vessel.

 

	
  

	
1.1.63

	
“Managers’ Undertaking” means the undertaking to be issued pursuant to Clause 3.3.15.

 

	
  

	
1.1.64

	
“Margin” means:-

 

	
  

	
(A)

	
for the period from the first Advance Date until the Delivery Date, nought point eight five per centum (0.85%) per annum; and

 

	
  

	
(B)

	
from the Delivery Date for the remainder of the Facility Period nought point seven five per centum (0.75%) per annum unless either (i) the Vessel is employed under an Acceptable Charter in which case the Margin will be nought point seven per centum (0.70%) per annum from the relevant Acceptable Charter Delivery Date until the termination of such Acceptable Charter or (ii) whether or not the Vessel is employed under an Acceptable Charter, the option pursuant to Clause 5.9 is exercised in which case the Margin will be nought point nine per centum (0.90%) per annum from the Deferral Option Date until the date on which all amounts of deferred Repayment Instalments are repaid.

 

	
  

	
1.1.65

	
“Market Value” means the actual finally determined valuation of the Vessel obtained for the purpose of this Agreement in accordance with the provisions of Clause 9.2.1.

 

	
  

	
1.1.66

	
“Maximum Loan Amount” means forty nine million Dollars ($49,000,000).

 

	
  

	
1.1.67

	
“Minimum Operating Balance” means seven hundred and fifty thousand Dollars ($750,000) where the Vessel is not employed under an Acceptable Charter or two hundred and fifty thousand Dollars ($250,000) for the duration that the Vessel is employed under an Acceptable Charter.

 

 

  

10

  

 

 

	
  

	
1.1.68

	
“Mortgagees’ Insurances” means all policies and contracts of mortgagees’ interest insurance (other than Mortgagees’ Additional Perils Insurance) from time to time taken out by the Lender in relation to the Vessel.

 

	
  

	
1.1.69

	
“Mortgagees’ Additional Perils Insurances” means all polices and contracts of mortgagees’ additional perils (oil pollution) insurance taken out by the Lender in relation to the Vessel.

 

	
  

	
1.1.70

	
“Mortgage” means the first preferred ship mortgage in respect of the Vessel referred to in Clause 8.2.1.

 

	
  

	
1.1.71

	
“Permitted Encumbrance” means any Encumbrance which has the prior written approval of the Lender, or any Encumbrance arising either by operation of law or the ordinary course of the business of any of the Security Parties.

 

	
  

	
1.1.72

	
“Post Delivery Security Documents” means this Agreement, the Mortgage, the Corporate Guarantee, the Assignment, the Account Pledges and the Managers’ Undertaking.

 

	
  

	
1.1.73

	
“Potential Event of Default” means any event which, with the giving of notice and/or the passage of time and/or the satisfaction of any materiality test, would constitute an Event of Default.

 

	
  

	
1.1.74

	
“Pre Delivery Security Documents” means this Agreement, the Corporate Guarantee and the Contract Assignment.

 

	
  

	
1.1.75

	
“Prepayment Fee” means the fee calculated by reference to the amount of the Loan prepaid being an amount equal to nought point two five per cent (0.25%) of (5-n)/5 of such amount where “n” is the number of years elapsed since the last Advance Date to occur, payable only in the event that the Loan is partly or fully refinanced by another lender (whether via an operating or capital lease or otherwise).

 

	
  

	
1.1.76

	
“Proceedings” means any suit, action or proceedings begun by the Lender arising out of or in connection with the Security Documents.

 

	
  

	
1.1.77

	
“Repayment Date” means any date for payment of a Repayment Instalment in accordance with Clause 5.

 

 

  

11

  

 

 

	
  

	
1.1.78

	
“Repayment Instalment” means any instalment of the Loan to be repaid by the Borrower pursuant to Clause 5.

 

	
  

	
1.1.79

	
“Requisition Compensation” means all compensation or other money which may from time to time be payable to the Borrower as a result of the Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

 

	
  

	
1.1.80

	
“Restricted Area” means (a) any waters which are subject to the United States Oil Pollution Act 1990 and (b) any waters of any other territory which are subject to materially similar legislation or which the Lender has given notice to the Borrower are to be a Restricted Area for the purposes of the Security Documents.

 

	
  

	
1.1.81

	
“Retention Account” means the bank account to be opened in the name of the Borrower with the Lender pursuant to Clause 10 for the retention and application of Earnings in accordance with this Agreement.

 

	
  

	
1.1.82

	
“Samco Group” means the Guarantor and its subsidiaries.

 

	
  

	
1.1.83

	
“Screen Rate” means in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate screen page of any information service selected by the Lender on which such rate is displayed.  If the agreed page is replaced or the service ceases to be available, the Lender may specify another page or service displaying the appropriate rate after consultation with the Borrower.

 

	
  

	
1.1.84

	
“the Security Documents” means this Agreement, the Corporate Guarantee, the Contract Assignment, the Acknowledgement, the Hedging Agreement, the Mortgage, the Assignment, the Managers’ Undertaking, the Account Pledges and any Charter Acknowledgements or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and the Hedging Liabilities.

 

	
  

	
1.1.85

	
“Security Parties” means the Borrower, the Corporate Guarantor and any other person or company who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness and the Hedging Liabilities except for the Managers and any party who has executed an acknowledgement to a notice of assignment issued pursuant to any of the Security Documents, and “Security Party” means any one of them.

 

 

  

12

  

 

 

	
  

	
1.1.86

	
“SMC” means a valid safety management certificate issued for the Vessel by or on behalf of the relevant Administration pursuant to paragraph 13.7 of the ISM Code which evidences operation of the Vessel in accordance with an SMS.

 

	
  

	
1.1.87

	
“SMS” means a safety management system for the Vessel developed and implemented in accordance with the ISM Code.

 

	
  

	
1.1.88

	
“Subject Documents” means the Contract and any Acceptable Charter.

 

	
  

	
1.1.89

	
“subsidiary” means any subsidiary as defined in section 736 of the Companies act 1985.

 

	
  

	
1.1.90

	
“Swap Provider” means the Lender when acting in its capacity as the swap provider under the Hedging Agreement.

 

	
  

	
1.1.91

	
“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Security Document.

 

	
  

	
1.1.92

	
“Taxes” means all taxes, levies, imposts, duties, charges, fees, deductions and withholdings (including any related interest, fines, surcharges and penalties) and any restrictions or conditions resulting in any charge, other than taxes on the overall net income or gains received or receivable of the Lender or of the Swap Provider, and “Tax” and “Taxation” shall be interpreted accordingly.

 

	
  

	
1.1.93

	
“Total Debt Service Amount” means, on a quarterly basis (or for the four month period between Delivery and the first Repayment Date, a four month basis), the aggregate of the Vessel’s- operating expenses and debt service obligations under Clauses 5 and 6 of this Agreement excluding any repayment of any amount deferred under Clause 5.9.

 

	
  

	
1.1.94

	
“Total Loss” means:-

 

 

  

13

  

 

 

	
  

	
(a)

	
an actual, constructive, arranged, agreed or compromised total loss of the Vessel; or

 

	
  

	
(b)

	
the requisition for title or compulsory acquisition of the Vessel by or on behalf of any government or other authority (other than by way of requisition for hire); or

 

	
  

	
(c)

	
the capture, seizure, arrest, detention or confiscation of the Vessel, unless the Vessel is released and returned to the possession of the Borrower within one month after the capture, seizure, arrest, detention or confiscation in question.

 

	
  

	
1.1.95

	
“the Vessel” means the 320,000 dwt VLCC newbuilding currently under construction by the Builder and designated with Builder’s hull no. S273 and everything now or in the future belonging to it on board and ashore.

 

1.2          Interpretation

 

               In this Agreement:-

 

	
  

	
1.2.1

	
words denoting the plural number include the singular and vice versa;

 

	
  

	
1.2.2

	
words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;

 

	
  

	
1.2.3

	
references to Recitals, Clauses, Schedules and Appendices are references to recitals and clauses of, and schedules and appendices to, this Agreement;

 

	
  

	
1.2.4

	
references to this Agreement include the Recitals, the Schedules and the Appendices;

 

	
  

	
1.2.5

	
the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement;

 

	
  

	
1.2.6

	
references to any document (including, without limitation, to all or any of the Security Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;

 

 

  

14

  

 

 

	
  

	
1.2.7

	
references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted;

 

	
  

	
1.2.8

	
references to the Lender include its successors, transferees and assignees;

 

	
  

	
1.2.9

	
references to times of day are to Paris time unless otherwise specified.

 

1.3          Offer letter

 

This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrower or its representatives prior to the date of this Agreement.

 

	
2

	
The Loan and its Purpose

 

	
  

	
2.1

	
Agreement to lend  Subject to the terms and conditions of this Agreement, and in reliance on each of the representations and warranties made or to be made in or in accordance with each of the Security Documents, the Lender agrees to advance the Loan to the Borrower to be used by the Borrower for the purposes referred to in Recital (C).

 

	
  

	
2.2

	
Drawings  Subject to satisfaction by the Borrower of the conditions set out in Clause 3.1 and/or Clause 3.3 (as the case may be) and subject to Clause 2.3, the Loan shall be advanced to the Borrower in three (3) Drawings in accordance with Clause 2 and Appendix B, in each case by the Lender transferring the amount of each Drawing to (i) the Builder in accordance with Article X.4 of the Contract or (ii) in the case of the fourth Instalment only to the Borrower by way of reimbursement by such method of funds transfer as the Lender and the Borrower shall agree.

 

	
  

	
2.3

	
Advance of Drawings  Each Drawing shall be advanced in Dollars, on a Business Day, provided that the Borrower shall have given to the Lender not more than ten (10) and not fewer than two (2) Business Days’ notice in writing materially in the form set out in Appendix A of the required Advance Date of the Drawing in question.  Each Drawdown Notice shall be received by the Lender no later than 10.00 am on the relevant Business Day.  Each Drawdown Notice once given shall be irrevocable and shall constitute a warranty by the Borrower that:-

 

 

  

15

  

 

 

	
  

	
2.3.1

	
all conditions precedent to the advance of the Drawing requested in that Drawdown Notice will have been satisfied on or before the Advance Date requested;

 

	
  

	
2.3.2

	
no Event of Default or Potential Event of Default will then have occurred and which is continuing;

 

	
  

	
2.3.3

	
no Event of Default or Potential Event of Default will result from the advance of the Drawing in question; and

 

	
  

	
2.3.4

	
there has been no material adverse change in the business, affairs or financial condition of any of the Security Parties from that pertaining at the date of this Agreement.

 

	
  

	
2.4

	
Availability Termination Date  The Lender shall not be under any obligation to advance all or any part of the Loan after the Availability Termination Date.

 

	
  

	
2.5

	
Application of Loan  Without prejudice to the obligations of the Borrower under this Agreement, the Lender shall not be obliged to concern itself with the application of the Loan by the Borrower.

 

	
  

	
2.6

	
Loan and control accounts  The Borrower will open and maintain with the Lender such loan and control accounts as the Lender shall in its discretion considers necessary or desirable.

 

	
  

	
2.7

	
Payment Confirmations  Subject to Clause 2.2 the Lender hereby agrees that pursuant to Article X,4 of the Contract it will:

 

	
  

	
2.7.1

	
issue an irrevocable confirmation letter substantially in the form set forth at Appendix C;

 

	
  

	
2.7.2

	
issue an irrevocable payment letter to the Builder substantially in the form set forth at Appendix D; and

 

 

  

16

  

 

 

	
  

	
2.7.3

	
advise the Builder’s bank of the details of the Drawing advanced by the Lender in respect of the fifth Instalment pursuant to Article X,4(b) of the Contract.

 

	
3

	
Conditions Precedent and Subsequent

 

	
  

	
3.1

	
Pre Delivery Drawings Conditions Precedent  Before the Lender shall have any obligation to advance a Drawing (other than the Delivery Drawing), the Borrower shall pay to the Lender any fees then payable pursuant to Clause 7 and shall deliver or cause to be delivered to or to the order of the Lender (save to the extent not already delivered to the Lender prior to the advance of the first Drawing) the following documents and evidence:-

 

	
  

	
3.1.1

	
Evidence of incorporation  In the case of the first Drawing, such evidence as the Lender may reasonably require that the Borrower and the Corporate Guarantor were duly incorporated in their respective countries of incorporation and remain in existence and, where appropriate, in good standing, with power to enter into, and perform their obligations under, the Security Documents to which they are, or are intended to be, a party, including (without limitation) a copy, certified by a duly authorised person on behalf of the Borrower and the Corporate Guarantor as true, complete, accurate and unamended, of all documents establishing or limiting the constitution of the Borrower and the Corporate Guarantor as applicable.  In the case of the second Drawing, a certificate of an authorised officer of the Borrower in such form as the Lender may reasonably require confirming the continuing accuracy and validity of the evidence referred to above.

 

	
  

	
3.1.2

	
Corporate authorities  In the case of the first Drawing, a copy, certified by a director or the secretary of the Security Party in question as true, complete, accurate and neither amended nor revoked, of a resolution of the directors and a resolution of the shareholders of each Security Party (together, where appropriate, with signed waivers of notice of any directors’ or shareholders’ meetings) approving, and authorising or ratifying the execution of, the Security Documents to which that Security Party is or is intended to be a party and all matters incidental thereto.  In the case of the second Drawing, a certificate of an authorised officer of the Borrower in such form as the Lender may reasonably require confirming the continuing accuracy and validity of the evidence referred to above.

 

 

  

17

  

 

 

	
  

	
3.1.3

	
Officer’s certificate  A certificate signed by a duly authorised officer of each of the Security Parties setting out the names of the directors, officers and shareholders of that Security Party together with an official certificate of good standing in respect of each of the Security Parties (other than the Corporate Guarantor).

 

	
  

	
3.1.4

	
Power of attorney  The notarially attested and legalised power of attorney of each of the Security Parties under which any documents are to be executed or transactions undertaken by that Security Party.

 

	
  

	
3.1.5

	
The Pre Delivery Security Documents  The Pre Delivery Security Documents together with the Hedging Agreement and all notices and other documents required by any of them, duly executed.

 

	
  

	
3.1.6

	
Drawdown Notice  A Drawdown Notice.

 

	
  

	
3.1.7

	
Contract and Builder’s Confirmation  A certified true copy of the Contract and a copy of the confirmation(s) issued by the Builder evidencing that the first three instalments of the Contract Price have been paid in relation to the Vessel.

 

	
  

	
3.1.8

	
Instalments  Evidence that the relevant Instalment under the Contract has fallen due and payable or in the case of reimbursement of the fourth Instalment, evidence that such Instalment has been paid by the Borrower to the Builder.

 

	
  

	
3.1.9

	
Builder’s Acknowledgement  A copy of the Acknowledgement duly executed by the Builder.

 

	
  

	
3.1.10

	
“Know your customer” documents  Such documentation and other evidence as the Lender reasonably requires to comply with its identification procedures in relation to the Borrower and the Corporate Guarantor and the transactions contemplated by the Subject Documents.

 

	
  

	
3.1.11

	
Financial Statements  the latest audited financial statements of the Corporate Guarantor in accordance with Clause 8.1.1 of the Guarantee.

 

 

  

18

  

 

 

	
  

	
3.1.12

	
Process agent  A letter from Samco (Services) Limited accepting their appointment by the Borrower and the Corporate Guarantor as agent for service of Proceedings pursuant to the Security Documents.

 

	
  

	
3.1.13

	
Legal opinions  Confirmation satisfactory to the Lender that all legal opinions required by the Lender in respect of the laws of Korea, the Cayman Islands, the Kingdom of Saudi Arabia and of England and Wales will be given substantially in the form required by the Lender.

 

	
  

	
3.2

	
Conditions Subsequent  The Borrower undertakes to deliver or to cause to be delivered to the Lender on, or as soon as practicable after, the Advance Date of the first and second Drawing (save to the extent already delivered to the Lender) but in any event not later than sixty (60) days following such Advance Date:-

 

	
  

	
3.2.1

	
Legal Opinions  Such legal opinions referred in Clause 3.1.13 as the Lender shall require.

 

	
  

	
3.2.2

	
Builder’s Acknowledgement  A copy of the acknowledgement issued by the Builder for the fifth Instalment of the Contract Price paid in relation to the Vessel.

 

	
  

	
3.3

	
Delivery Drawing Conditions Precedent  Before the Lender shall have any obligation to advance the Delivery Drawing, the Borrower shall have paid to the Lender all fees then payable pursuant to Clause 7 and delivered all documents and evidence required under Clauses 3.1 and 3.2 not previously delivered or paid to the Lender and shall deliver or cause to be delivered to or to the order of the Lender the following documents and evidence (to the extent not already delivered to the Lender under Clauses 3.1 or 3.2):-

 

	
  

	
3.3.1

	
Minimum Operating Balance  Evidence of the credit to the Earnings Account of the appropriate Minimum Operating Balance.

 

	
  

	
3.3.2

	
Confirmatory Certificate  A certificate signed by an authorised officer of the relevant Security Parties confirming that the documents previously delivered to the Lender pursuant to Clauses 3.1.1 to 3.1.4 inclusive have not been amended or revoked and remain in full force and effect or if amended, together with such amendments.

 

 

  

19

  

 

 

	
  

	
3.3.3

	
Vessel documents  Photocopies, certified as true, accurate and complete by a director or the secretary or other duly authorised signatory of the Borrower, of:-

 

	
  

	
(a)

	
any bill of sale transferring title in the Vessel to the Borrower free of all encumbrances, maritime liens or other debts whatsoever;

 

	
  

	
(b)

	
the builder’s certificate issued by the Builder as evidence that the Vessel has been delivered by the Builder to the Borrower free of all liens, claims, mortgages, encumbrances and other debts and claims of any description;

 

	
  

	
(c)

	
the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Builder to the Borrower pursuant to the Contract;

 

	
  

	
(d)

	
the declaration of warranty issued by the Builder confirming that the Vessel is free of all liens, encumbrances and other debts and claims of any description whatsoever;

 

	
  

	
(e)

	
a commercial invoice issued by the Builder for the whole of the Contract Price in relation to the Vessel;

 

	
  

	
(f)

	
an interim classification certificate for hull and machinery confirming that the Vessel is classed +A1(E), Oil Carrier ESP, SH, +AMS, +ACCU, VEC, RES, CPP, RW, Spm, UWILD by American Bureau of Shipping free of all recommendations and qualifications;

 

	
  

	
(g)

	
any Acceptable Charter or any other charterparty or contract of employment of the Vessel which will be in force on the Advance Date in respect of the Delivery Drawing for which the consent of the Lender is required under the Security Documents;

 

	
  

	
(h)

	
any Management Agreement which will be in force on the Advance Date in respect of the Delivery Drawing;

 

	
  

	
(i)

	
the Vessel’s current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;

 

 

  

20

  

 

 

	
  

	
(j)

	
if the Vessel is trading, or is to trade, on the Advance Date in respect of the Delivery Drawing, in a Restricted Area, the Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990 or equivalent document;

 

	
  

	
(k)

	
the Vessel’s current SMC;

 

	
  

	
(l)

	
the ISM Company’s current DOC;

 

	
  

	
(m)

	
the Vessel’s current ISSC;

 

	
  

	
(n)

	
the Vessel’s current IAPPC; and

 

	
  

	
(o)

	
the Vessel’s current Tonnage Certificate;

 

	
  

	
 

	
in each case together with all addenda, amendments or supplements.

 

	
  

	
3.3.4

	
Evidence of ownership and registration of Mortgage  Certificate(s) of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) at the Vessel’s port of registry confirming that the Vessel is on the Advance Date in respect of the Delivery Drawing owned by the Borrower and free of registered Encumbrances other than the Mortgage.

 

	
  

	
3.3.5

	
Evidence of insurance  Evidence that the Vessel will on the Advance Date in respect of the Delivery Drawing be insured in the manner required by the relevant Post Delivery Security Documents and that letters of undertaking will be issued in the manner required by the relevant Post Delivery Security Documents, together with the written approval of the Insurances by an insurance adviser appointed by the Lender.

 

	
  

	
3.3.6

	
The Post Delivery Security Documents  The Post Delivery Security Documents, together with all notices and other documents required by any of them, duly executed and, in the case of the Mortgage, registered on the Advance Date in respect of the Delivery Drawing with first priority through the Registrar of Ships (or equivalent official) at the port of registry of the Vessel.

 

	
  

	
3.3.7

	
Drawdown Notice  A Drawdown Notice.

 

 

  

21

  

 

 

	
  

	
3.3.8

	
Process agent  A letter from Samco (Services) Limited accepting their appointment by each of the Security Parties as agent for service of Proceedings pursuant to the Post Delivery Security Documents.

 

	
  

	
3.3.9

	
Funding  Evidence that any shortfall between the Loan and the Contract Price has been fully covered by way of a subordinated shareholder loan by a member of the Samco Group.

 

	
  

	
3.3.10

	
Delivery Instalment  An invoice from the Builder evidencing the final net amount of the Instalment of  the Contract Price payable on the Delivery Date.

 

	
  

	
3.3.11

	
Managers’ subordination and confirmation  The written confirmation of the Managers that (i) for the currency of their Management Agreement they will not, without the prior written consent of the Lender, (such consent not to be unreasonably withheld or delayed) sub-contract or delegate the whole or substantially the whole of the administrative or technical management of the Vessel to any third party and (ii) they will subordinate their respective rights in respect of the Borrower, the Vessel, the Earnings, Insurances and Requisition Compensation to those of the Lender throughout the Facility Period provided that such subordination shall not restrict the rights of the Managers in respect of the Borrower, Vessel, the Earnings, Insurances and Requisition Compensation when no Potential Event of Default or Event of Default has occurred or, after a Potential Event of Default or an Event of Default has occurred, when that Potential Event of Default or Event of Default is no longer continuing.

 

	
  

	
3.3.12

	
Mandates  Such duly signed forms of mandate and supporting documentation and or other evidence of the opening of the Accounts as the Lender may require.

 

	
  

	
3.3.13

	
Legal opinions  Confirmation satisfactory to the Lender that the Cayman Islands law, Marshall Islands law and English law legal opinions required by the Lender will be given substantially in the form required by the Lender.

 

 

  

22

  

 

 

	
  

	
3.3.14

	
Charter Acknowledgement  The Charter Acknowledgement duly signed by the Charterer if any Acceptable Charter is in place on the Delivery Date.

 

	
  

	
3.4

	
Delivery Drawings Conditions Subsequent  The Borrower undertakes to deliver or to cause to be delivered to the Lender on, or immediately after (save as provided below), the Advance Date of the Delivery Drawing, the following additional documents and evidence:-

 

	
  

	
3.4.1

	
Evidence of registration  If not already provided to the Lender pursuant to Clause 3.3.4, evidence of registration of the Mortgage, with first priority, with the Registrar of Ships (or equivalent official) at the port of registry of the Vessel within a period of sixty (60) days following the Advance Date of the Delivery Drawing, subject to the Mortgage having been duly recorded on the Delivery Date and remaining in full force and effect as a first preferred ship mortgage throughout such period.

 

	
  

	
3.4.2

	
Letters of undertaking  The Insurances and letters of undertaking as required by the relevant Post Delivery Security Documents.

 

	
  

	
3.4.3

	
Legal opinions  Such legal opinions as the Lender shall require no later than sixty days following the Advance Date of the Delivery Drawing.

 

	
  

	
3.4.4

	
ISM Code  Certified true copies of the interim SMC and, if appropriate, interim DOC or SMC and DOC relating to the Vessel and ISM Company (unless already provided under Clause 3.3.6) once the same have been issued.

 

	
  

	
3.4.5

	
Master’s receipt  The master’s receipt for the Mortgage no later than sixty (60) days following the Advance Date of the Delivery Drawing.

 

	
  

	
3.5

	
No waiver If the Lender in its sole discretion agrees to advance any part of the Loan to the Borrower before all of the documents and evidence required by Clauses 3.1 to 3.4 (inclusive) in respect of the amount advanced have been delivered to or to the order of the Lender, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Lender no later than the date specified by the Lender, and the advance of any part of the Loan shall not be taken as a waiver of the Lender’s right to require production of all the documents and evidence required by Clauses 3.1 to 3.4 (inclusive).

 

 

  

23

  

 

 

	
  

	
3.6

	
Form and content  All documents and evidence delivered to the Lender pursuant to this Clause shall:-

 

	
  

	
3.6.1

	
be in form and substance acceptable to the Lender;

 

	
  

	
3.6.2

	
be accompanied, if required by the Lender, by translations into the English language, certified in a manner acceptable to the Lender;

 

	
  

	
3.6.3

	
if required by the Lender, be certified, notarised, legalised or attested in a manner acceptable to the Lender.

 

	
  

	
3.7

	
Event of Default  The Lender shall not be under any obligation to advance any part of the Loan nor to act on any Drawdown Notice if, at the date of the Drawdown Notice or at the date on which the advance of a Drawing is requested in the Drawdown Notice, an Event of Default or Potential Event of Default shall have occurred and be continuing, or if an Event of Default or Potential Event of Default would result from the advance of the Drawing in question.

 

	
4

	
Representations and Warranties

 

	
  

	
4.1

	
The Borrower represents and warrants to the Lender at the date of this Agreement as follows:-

 

	
  

	
4.1.1

	
Satisfaction of conditions  All acts, conditions and things required to be done and satisfied and to have happened prior to the execution and delivery of the Hedging Agreement, the Pre-Delivery Security Documents, the Contract and any Acceptable Charter then in existence in order to constitute the Hedging Agreement, the Pre-Delivery Security Documents the Contract and any Acceptable Charter then in existence the legal, valid and binding obligations of the Security Parties in accordance with their respective terms have been done, satisfied and have happened in compliance with all applicable laws to which any relevant Security Party is subject.

 

	
  

	
4.1.2

	
Disclosure of material facts  The Borrower is not aware of any material facts or circumstances which have not been disclosed to the Lender and which might, if disclosed, have adversely affected the decision of a person considering reasonably whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrower.

 

 

  

24

  

 

 

	
  

	
4.1.3

	
Use of Loan  The Loan will be used for the purposes specified in Recital (C) (or in reimbursement to the Borrower of any amount paid by the Borrower to the Builder in respect of the fourth and/or fifth Instalments).

 

	
  

	
4.1.4

	
No material litigation  There is no action, suit, arbitration or administrative proceeding nor any contemplated action, suit, arbitration or administrative proceeding pending or to its knowledge about to be pursued before any court, tribunal or governmental or other authority which would, or would be likely to, have a materially adverse effect on the business, assets, financial condition or creditworthiness of any of the Security Parties.

 

	
  

	
4.1.5

	
No breach of law or contract  The execution, delivery and performance of the Security Documents and the Subject Documents will not contravene any contractual restriction or any law binding on any of the Security Parties or on any shareholder (whether legal or beneficial) of any of the Security Parties, or the constitutional documents of any of the Security Parties, nor result in the creation of, nor oblige any of the Security Parties to create, any Encumbrance over all or any of its assets, with the exception of the Encumbrances created by or pursuant to the Security Documents and in entering into those of the Security Documents to which it is, or is to be, a party and in borrowing the Loan, the Borrower is acting for its own account.

 

	
  

	
4.1.6

	
No deductions  The Borrower is not required to make any deduction or withholding from any payment which it may be obliged to make to the Lender under or pursuant to the Security Documents.

	 

 

	
  

	
4.2

	
The Borrower represents and warrants to the Lender at the date of this Agreement and (by reference to the facts and circumstances then pertaining) at the date of each Drawdown Notice, at each Advance Date and at each Interest Payment Date as follows:-

 

	
  

	
4.2.1

	
Incorporation and capacity  Each of the Security Parties is a body corporate duly constituted and existing and (where applicable) in good standing under the law of its country of incorporation, in each case with perpetual corporate existence (save in respect of the Corporate Guarantor whose existence is until 21 November 2019) and the power to sue and be sued, to own its assets and to carry on its business, and all of the corporate shareholders (if any) of each Security Party are duly constituted and existing under the laws of their countries of incorporation with perpetual corporate existence and the power to sue and be sued, to own their assets and to carry on their business.

 

 

  

25

  

 

 

	
  

	
4.2.2

	
Solvency  None of the Security Parties is insolvent or in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any of the Security Parties or all or any part of their assets.

 

	
  

	
4.2.3

	
Binding obligations  The Security Documents when duly executed and delivered will constitute the legal, valid and binding obligations of the Security Parties enforceable in accordance with their respective terms save to the extent qualified in the legal opinions delivered or to be delivered (as the case may be) to the Lender pursuant to Clause 3.

 

	
  

	
4.2.4

	
Registrations and consents  With the exception only of the registrations referred to in Clauses 3.1 to 3.4 (inclusive) all (if any) consents, licences, approvals and authorisations of, or registrations with or declarations to, any governmental authority, bureau or agency which may be required in connection with the execution, delivery, performance, validity or enforceability of the Hedging Agreement, the Security Documents which exist at that time and the Subject Documents have been obtained or made and remain in full force and effect and the Borrower is not aware of any event or circumstance which could reasonably be expected adversely to affect the right of the Borrower to hold and/or obtain renewal of any such consents, licences, approvals or authorisations.

 

	
  

	
4.2.5

	
Completeness and accuracy of the Subject Documents and information supplied  (i) The certified copies of the Subject Documents provided or to be provided by the Borrower to the Lender in accordance with Clauses 3.1 or 3.3 (as the case may be) do or will evidence the agreement between the Borrower and the Builder in relation to the Contract and the Borrower and the Charterer in relation to any Acceptable Charter (ii) save as disclosed by the Borrower to the Lender, there are no commissions, rebates, premiums or other payments due in connection with the Subject Documents other than as contemplated by the Subject Documents delivered to the Lender under this Agreement (iii) the Borrower has or will obtain the consent of the Lender in relation to any material amendments to such Subject Documents and (iv) all information contained in the Subject Documents and in any information provided by or on behalf of any Security Party pursuant to any of the Security Documents is accurate and true in all material respects when so provided.

 

 

  

26

  

 

 

	
  

	
4.2.6

	
No established place of business in the United Kingdom or United States  None of the Security Parties has, nor will any of them have during the Facility Period, an established place of business in the United Kingdom or the United States of America unless all steps which are required by law to have been taken, have been taken to (i) attend to the registration of any charges created by that Security Party and contained in the Security Documents at Companies House or complete any UCC1 filings required in the United States of America in respect of the Security Documents to which that Security Party is a party and (ii) preserve the Lender’s priority of security under the Security Documents in the jurisdiction where that place of business is established.

 

 

	
  

	
4.3

	

The Borrower represents and warrants to the Lender at the date of each Drawdown Notice and each Advance Date that all acts, conditions and things required to be done and satisfied and to have happened prior to the execution and delivery of the Security Documents which exist at that time in order to constitute such Security Documents the legal, valid and binding obligations of the Security Parties in accordance with their respective terms have been done, satisfied and have happened in compliance with all applicable laws to which any relevant Security Party is subject.

 

	
5

	
Repayment and Prepayment

 

	
  

	
5.1

	

Repayment of Loan  Subject to Clauses 5.4, 5.8 and 5.9, the Borrower agrees to repay the Loan to the Lender by forty (40) consecutive Repayment Instalments together with the Balloon Amount, with each such Repayment Instalment being (subject to any adjustment in the amount of the Loan as set forth in Clause 5.2 or 5.6 below) in an amount equal to six hundred and seventy five thousand Dollars ($675,000).  The first Repayment Instalment shall be due and payable on the date falling four months after the Delivery Date and subsequent Repayment Instalments shall be due and payable at consecutive intervals of three (3) calendar months thereafter.  The Balloon Amount shall be payable concurrently with the final Repayment Instalment.

 

 

  

27

  

 

 

	
  

	
5.2

	
Reduction of Repayment Instalments  If the aggregate amount of the Loan advanced to the Borrower is less than the Maximum Loan Amount, the amount of each Repayment Instalment and the Balloon Amount shall be reduced pro rata to the amount actually advanced.

 

	
  

	
5.3

	
Voluntary Prepayment  The Borrower may prepay the Loan in whole or in part in an amount of not less than one million Dollars ($1,000,000) or an integral multiple of that amount (or as otherwise may be agreed by the Lender) provided that it has first (i) given to the Lender not fewer than fifteen (15) days’ prior written notice expiring on a Business Day of its intention to do so and (ii) paid to the Lender, in addition to the amount prepaid, any Prepayment Fee due in respect of the prepayment in question.  Any notice pursuant to this Clause once given shall be irrevocable and shall oblige the Borrower to make the prepayment referred to in the notice on the Business Day specified in the notice, together with all interest accrued on the amount prepaid up to and including that Business Day.

 

	
  

	
5.4

	
Mandatory Prepayment on Contract termination or transfer, sale of Vessel or Total Loss or Illegality  (a) If the Contract is terminated, revoked, cancelled or otherwise ceases to remain in full force and effect or is transferred before the Delivery Date or the Vessel is sold by the Borrower or becomes a Total Loss or (b) if any event occurs which would, or would with the passage of time, render performance of any of the Security Documents by any of the Security Parties impossible, unlawful or unenforceable by the Lender (an “Illegality Event”) and the Borrower fails to provide the Lender with alternative security acceptable to the Lender within ten (10) Business Days of such Illegality Event arising, the Borrower shall, on or before the date of any such termination, revocation, cancellation, transfer, completion of sale or within one hundred and fifty days (150) of the date of such Total Loss (as determined in accordance with the Mortgage) or within ten (10) Business Days of such Illegality Event, (i) prepay the whole of the Indebtedness and any Hedging Liabilities outstanding and (ii) terminate the Hedging Agreement.  However Borrower need not terminate the Hedging Agreement nor repay the Hedging Liabilities if the Hedging Liabilities are secured by (i) a cash deposit secured in favour of the Lender or (ii) a mortgage in favour of the Lender over an existing vessel already financed by the Lender, such secured cash deposit or mortgage to be in a form acceptable to the Lender in its absolute discretion.

 

 

  

28

  

 

 

	
  

	
5.5

	
Prepayment indemnity  If the Borrower shall, subject always to Clause 5.3 or Clause 5.4 (as the case may be) , make a prepayment on a Business Day other than the last day of an Interest Period in respect of the whole or any part of the Loan, it shall, in addition to the amount prepaid, any Prepayment Fee and accrued interest, pay to the Lender any amount which the Lender may certify is necessary to compensate the Lender for any Break Costs incurred by the Lender as a result of the making of the prepayment in question.  The Borrower shall also pay on demand, in all circumstances and irrespective of the date on which any prepayment is made, such amount as the Lender as Swap Provider shall certify as shall be necessary to compensate the Lender for any losses under the Hedging Agreement arising out of such prepayment or any payment deferral under Clause 5.9.  The Hedging Agreement shall be adjusted by the Lender upon (i) any prepayment howsoever made or (ii) any payment deferral under Clause 5.9, to reflect such prepayment or payment deferral (as the case may be). No further fees or penalties shall be payable in respect of any such prepayment or deferral.  The Borrower shall be entitled to be credited with and the Lender agrees to pay to the Borrower any Break Gains subject always to any right of set-off on the part of the Lender and provided no Potential Event of Default or Event of Default shall have occurred.

 

	
  

	
5.6

	
Application of prepayments  Any prepayment in an amount less than the Indebtedness shall be applied in satisfaction or reduction first of any costs and other amounts outstanding; secondly of all interest outstanding; and thirdly of the Repayment Instalments and the Balloon Amount in inverse order of maturity provided that where all or any part of the Loan is subject to a fixed rate of interest pursuant to Clause 6.10 then the Borrower have the option to elect that any such prepayment be applied against the Repayment Instalments and the Balloon Amount either on a pro rata basis or on an inverse order of maturity basis.  Any such election by the Borrower shall be specified in the prepayment notice given to the Lender pursuant to Clause 5.3.  If no such election is made by the Borrower in the relevant prepayment notice the Lender shall apply such prepayment against the Repayment Instalments and the Balloon Amount on an inverse order of maturity basis.

 

 

  

29

  

 

 

	
  

	
5.7

	
No reborrowing  No amount repaid or prepaid pursuant to this Agreement may in any circumstances be reborrowed.

 

	
  

	
5.8

	
Non Delivery  In the event that the Vessel is not delivered to the Borrower on or before the Availability Termination Date, the Borrower shall on that date repay to the Lender the entire Indebtedness and pay any Hedging Liabilities.

 

	 	
5.9

	

Deferral of Repayment Instalments  Notwithstanding the provisions of Clause 5.1, the Borrower shall have the option to defer payment of up to fifty per cent (50%) of four or less Repayment Instalments.  Such Repayment Instalments may or may not be consecutive.  The Borrower may exercise such option from time to time by giving to the Lender not less than fifteen (15) days prior written notice of its intention to defer specifying the amount to be deferred and the relevant Repayment Instalments concerned.  The amount of any Repayment Instalment which is deferred shall be added to the Balloon Amount until such deferred amount is repaid.  With effect from the Deferral Option Notice Date until the date on which all deferred amounts of the Repayment Instalments are repaid, all Earnings in excess of Total Debt Service Amount shall remain credited to and be accumulated in the Earnings Account.  On each date during such period that falls at six monthly intervals from the Deferred Option Notice Date and on each Repayment Date commencing on the second Repayment Date to occur after the relevant Deferral Option Date such accumulated Earnings shall be applied against reduction of the deferred amounts of Repayment Instalments. If a further option to defer is exercised during any period when deferred amounts of Repayment Instalments are still outstanding the repayment of all deferred amounts of Repayment Instalments shall be made on the same Repayment Date that applies to the subsisting deferred amounts of Repayment Instalments.

 

	
6

	
Interest

 

	
  

	
6.1

	
Interest Periods  Subject to Clauses 6.2 and 6.10, the period during which the Loan shall be outstanding pursuant to this Agreement shall be divided into consecutive Interest Periods of three (3), six (6) or nine (9)  months’ duration (or, in respect of the first and second Drawings exclusively, one (1) or two (2) months’ duration) as selected by the Borrower by written notice to the Lender not later than 11.00 a.m. on the third Business Day before the beginning of the Interest Period in question, or such other longer duration as may be agreed by the Lender (in its discretion).

 

 

  

30

  

 

 

	
  

	
6.2

	
Beginning and end of Interest Periods  The first Interest Period in respect of each Drawing shall begin on its Advance Date.  Notwithstanding Clause 6.1, (i) the last Interest Periods applicable to the first and second Drawings immediately prior to the advance of the Delivery Drawing shall be of such length as to end on the Advance Date for the Delivery Drawing, upon which the Loan shall be consolidated and subject only to Clause 6.10, all Interest Periods for all three (3) Drawings shall be concurrent, and (ii) the first Interest Period applicable to the Loan from the Advance Date for the Delivery Drawing shall be of four (4) months’ duration.  The final Interest Period for the Loan shall end on the Repayment Date applicable to the final Repayment Instalment.

 

	
  

	
6.3

	
Interest Periods to meet Repayment Dates  If the Borrower shall select, or the Borrower and the Lender shall agree, an Interest Period which does not expire on the next Repayment Date, there shall, in respect of a part of the Loan equal to the Repayment Instalment falling due for payment before the expiry of that Interest Period, be a separate Interest Period which shall expire on the relevant Repayment Date, and the Interest Period selected or agreed shall apply to the balance of the Loan only.

 

	
  

	
6.4

	
Interest rate  During each Interest Period interest shall accrue on the Loan at the rate determined by the Lender to be the aggregate of (a) the applicable Margin and (b) LIBOR determined at or about 11.00 a.m. (London time) on the second Business Day prior to the beginning of that Interest Period.

 

	
  

	
6.5

	
Failure to select Interest Period  If the Borrower at any time fails to select or agree an Interest Period in accordance with Clause 6.1, the interest rate applicable after the expiry of the then current Interest Period shall be the rate determined by the Lender in accordance with Clause 6.4 for consecutive Interest Periods each of three (3) months duration.

 

 

  

31

  

 

 

	
  

	
6.6

	
Accrual and payment of interest  Interest shall accrue on the Loan (and on any amounts owing by the Borrower to the Lender) from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed  and shall be paid by the Borrower to the Lender on the last day of each Interest Period as regards the Loan (otherwise on demand) and additionally, during any Interest Period exceeding three (3) months (other than the Interest Period commencing on the date of the advance of the Delivery Drawing), on the last day of each successive three (3) month period after the beginning of that Interest Period.

 

	
  

	
6.7

	
Ending of Interest Periods  Without prejudice to Clause 6.1, each Interest Period shall, subject to Clauses 6.2 and 6.3, end on the date which numerically corresponds to the date on which the immediately preceding Interest Period ended (or, in the case of the first Interest Period in respect of the Loan, to the first Advance Date) in the calendar month which is the number of months selected or agreed after the calendar month in which the immediately preceding Interest Period ended (or, in the case of the first Interest Period in respect of the Loan, in which the first Advance Date occurred), except that:-

 

	
  

	
6.7.1

	
if there is no numerically corresponding date in the calendar month in which the Interest Period ends, the Interest Period shall end on the last Business Day in that calendar month; and

 

	
  

	
6.7.2

	
if any Interest Period would end on a day which is not a Business Day, that Interest Period shall end on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month, in which event the Interest Period in question shall end on the next preceding Business Day).

 

Any adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored for the purpose of determining the date on which any subsequent Interest Period shall end.

 

 

	
  

	
6.8

	

Default Rate  If an Event of Default shall occur pursuant to Clause 11.2.1 or the Loan shall be accelerated pursuant to Clause 11.1, the whole of any unpaid amount of the Indebtedness which is due and owing shall, from the date of the occurrence of such Event of Default or date of acceleration (as the case may be), bear interest up to the date of actual payment (both before and after judgment) at the Default Rate, compounded at such intervals as the Lender shall in its discretion reasonably determine, which interest shall be payable from time to time by the Borrower to the Lender on demand.

 

 

  

32

  

 

 

	
  

	
6.9

	
Determinations conclusive  Each determination of an interest rate made by the Lender in accordance with Clause 6 shall (save in the case of manifest error or on any question of law) be final and conclusive.

 

	
  

	
6.10

	
Fixed Rate Option  Notwithstanding any other provisions of this Clause 6, the Borrower shall have an option from time to time during the Facility Period to change the basis on which interest is calculated on all or part of the Loan from a floating rate to a fixed rate of interest.  If the Borrower wishes to change from a floating rate to a fixed rate of interest in respect of all or part of the Loan the Borrower shall notify the Lender in writing not less than five (5) Business Days (or such shorter period as the Lender may agree) prior to the date of (i) the Drawdown Notice (if the Loan has not been fully advanced) or (ii) the end of the current Interest Period applicable to the Loan (if the Loan has been fully advanced) of its desire to do so and of (i) the period for which the fixed rate is required and (ii) the amount of the Loan (being not less than fifty per centum (50%) of the Loan outstanding at any time) which the Borrower wishes to change from a floating rate to a fixed rate provided that for the period from the advance of the second Drawing until the Delivery Date the amount of the Loan which may be subject to a fixed rate of interest shall not be less than twenty four million five hundred thousand Dollars ($24,500,000).  The Lender as Swap Provider shall notify the Borrower in writing of the fixed rate of interest which the Lender as Swap Provider can offer the Borrower for the amount of the Loan and the period specified (the “Swap Period”) pursuant to a Hedging Transaction. If the Borrower wishes to accept the fixed rate so notified, the Borrower shall accept the same and the Borrower shall then enter into one or more Hedging Transactions pursuant to the Hedging Agreement (the terms and conditions of each of which will be specified in a Confirmation) and the Lender as Swap Provider shall issue a Confirmation which the Borrower shall acknowledge (or be deemed to acknowledge) in accordance with the provisions of Part 5(m) of the Schedule incorporated in the Hedging Agreement that the Confirmation correctly reflects the parties’ agreement on the terms of the relevant Hedging Transaction  and the agreed fixed rate shall thereupon apply to the relevant portion of the Loan from the relevant Advance Date or the start of the next Interest Period (as the case may be) and for the duration of the Swap Period.  Interest on all or any part of the Loan which is fixed pursuant to this Clause 6.10 shall be paid quarterly and each Interest Period whilst the Loan or any part of it is fixed pursuant to this Clause 6.10 shall be of three (3) months duration as regards the Loan or the relevant part of it so fixed.

 

 

  

33

  

 

 

	
  

	
6.11

	
The amount of interest from time to time paid by the Borrower by virtue of one or more Hedging Transactions entered into between the Borrower and the lender as Swap Provider shall, provided no Event of Default shall have occurred that is continuing, be applied by the Lender in its capacity as lender under this Agreement against the amount of interest payable under this Agreement in order to discharge in way of agreed set-off the obligation of the Borrower to pay the amount of interest under this Agreement to which the amount of interest paid under the relevant Hedging Transactions or Transactions relates.

 

	
7

	
Fees

 

	
  

	
7.1

	
Loan commitment commission The Borrower shall pay to the Lender a commitment commission calculated at the rate of nought point one five per centum (0.15%) per annum on any undrawn part of the Maximum Loan Amount for the period commencing on the date of this Agreement and ending on the earlier to occur of the Availability Termination Date and the date on which the Delivery Drawing is advanced to the Borrower, all dates inclusive.  The Commitment Commission will accrue from day to day on the basis of a 360 day year and the actual number of days elapsed, and shall be paid to the Lender quarterly in arrears with the first such quarterly payment being due and payable on the day falling three (3) months after the date of this Agreement.

 

	
  

	
7.2

	
Structuring Fee  The Borrower shall pay to the Lender a flat fee for the structuring and negotiation of the transaction described in this Agreement as agreed in a letter signed by both parties on the date hereof.

 

	
8

	
Security Documents

 

	
  

	
8.1

	
The Borrower shall on the date hereof execute and deliver to the Lender, or cause to be executed and delivered to the Lender, the Hedging Agreement and, as security for the repayment of the Indebtedness and the Hedging Liabilities, the following Pre Delivery Security Documents in such forms and containing such terms and conditions as the Lender shall require:-

 

 

  

34

  

 

 

	
  

	
8.1.1

	
the Contract Assignment  a first priority assignment of the Contract; and

 

	
  

	
8.1.2

	
the Corporate Guarantee  the guarantee and indemnity of the Corporate Guarantor.

 

The Lender agrees to release and re-assign the Contract to the Borrower on the Advance Date for the Delivery Drawing.

 

	
  

	
8.2

	
As security for repayment of the Indebtedness and the Hedging Liabilities, the Borrower shall in addition to the Security Document delivered pursuant to Clause 8.1.2 execute and deliver to the Lender, or cause to be executed and delivered to the Lender, on or before the Advance Date of the Delivery Drawing the following Security Documents (which shall be in a form agreed by the Lender and the Borrower:-

 

	
  

	
8.2.1

	
the Mortgage  a first preferred Marshall Islands (or such other flag as the Lender in its discretion may agree) ship mortgage over the Vessel;

 

	
  

	
8.2.2

	
the Assignment  a deed of assignment of any Acceptable Charter, the Insurances, Earnings and Requisition Compensation of the Vessel; and

 

	
  

	
8.2.3

	
the Account Pledges  Account Pledges in respect of all amounts from time to time standing to the credit of the Accounts.

 

	
9

	
Covenants

 

	
  

	
The Borrower covenants with the Lender in the following terms.

 

	
  

	
9.1

	
Negative covenants

 

The Borrower will not without the Lender’s prior written consent :-

 

	
  

	
9.1.1

	
no disposals or third party rights  dispose of or create or permit to arise or continue any Encumbrance (other than Permitted Encumbrances) or other third party right (other than Acceptable Charters or any other charters which may be permitted in accordance with the terms of any of the Security Documents) on or over all or any part of its present or future assets or undertaking; nor

 

 

  

35

  

 

 

	
  

	
9.1.2

	
no borrowings  except in the ordinary course of business borrow any money, other than any shareholder loan from a member of the Samco Group which is fully subordinated to the Indebtedness and the Hedging Liabilities or incur any obligations under leases; nor

 

	
  

	
9.1.3

	
no repayments  save for the Loan and except in the ordinary course of business, repay any loans made to it; nor

 

	
  

	
9.1.4

	
no liabilities  except in the ordinary course of business, incur any liability to any third party which is, in the opinion of the Lender, of a substantial nature; nor

 

	
  

	
9.1.5

	
no other business  engage in any business other than the ownership, operation, chartering and management of the Vessel owned by it; nor

 

	
  

	
9.1.6

	
no loans or other financial commitments  enter into any hedging agreement or derivative or futures contract of any description except with the Lender (save that, in the ordinary course of its business, the Borrower may enter into bunker hedging transactions) in relation to (and in the ordinary course of operating the Vessel) nor except in the ordinary course of business, make any loan nor enter into any guarantee or indemnity or otherwise voluntarily assume any actual or contingent liability in respect of any obligation of any other person;

 

	
  

	
9.1.7

	
no chartering after Event of Default  following the occurrence and during the continuation of an Event of Default let the Vessel on charter or renew or extend any charter or other contract of employment of the Vessel (nor agree to do so); nor

 

	
  

	
9.1.8

	
no change in management  appoint anyone other than the Managers as commercial or technical managers of the Vessel, nor terminate or materially vary the arrangements for the commercial or technical management of the Vessel, nor permit the Managers to sub-contract or delegate the whole or substantially the whole of the commercial or technical management of the Vessel to any third party; nor

 

 

  

36

  

 

 

	
  

	
9.1.9

	
no change in ownership or control  permit any change in its beneficial ownership and control from that advised to the Lender at the date of this Agreement (in which respect the consent of the Lender shall not be unreasonably withheld); nor

 

	
  

	
9.1.10

	
no merger enter into any amalgamation, demerger, merger or corporate reconstruction; nor

 

	
  

	
9.1.11

	
no amendment of Subject Documents  materially amend, supplement or vary any of the Subject Documents delivered to the Lender pursuant to Clause 3.

 

	
  

	
9.2

	
Positive covenants

 

	
  

	
9.2.1

	
Additional security From the Delivery Date until the end of the Facility Period, if and so often as the aggregate of (a) the Market Value of the Vessel (as determined as stated below) and (b) the value of any additional security (other than cash security) for the time being provided to the Lender pursuant to this Clause (together the “Security Asset Value”) shall be less than (a) where the Vessel is not employed under an Acceptable Charter of at least two (2) years duration and for a minimum net time charter rate of thirty thousand Dollars ($30,000) per day, one hundred and twenty per cent (120%) of the Indebtedness less the amount standing to the credit of the Retention Account and the amount of any cash deposited by the Borrower with the Lender and pledged  by way of security, or (b) where the Vessel is employed under an Acceptable Charter of at least two (2) years duration and for a minimum net time charter rate of thirty thousand Dollars ($30,000) per day (provided such Acceptable Charter has more than six months duration at any time left to run), one hundred and ten per cent (110%) of the Indebtedness less the amount standing to the credit of the Retention Account and the amount of any cash deposited by the Borrower with the Lender and pledged by way of security, (in each instance the “Relevant Percentage”) the Borrower will within thirty (30) days of the request of the Lender to do so, at the Borrower’s option:-

 

 

  

37

  

 

 

	
  

	
(a)

	
pay to the Lender a cash deposit in the amount of the shortfall to be secured in favour of the Lender as additional security for the payment of the Indebtedness; or

 

	
  

	
(b)

	
give to the Lender other additional security in amount and form acceptable to the Lender in its discretion; or

 

	
  

	
(c)

	
prepay such amount of the Indebtedness as will ensure that the Security Asset Value is not less than the Relevant Percentage.

 

PROVIDED THAT if the aggregate of the Market Value of the Vessel (as determined as stated below) and the value of any additional security for the time being provided to the Lender pursuant to this Clause shall subsequently exceed the Relevant Percentage the Lender shall (on the request and at the expense of the Borrower and provided that no Event of Default or Potential Event of Default shall then have occurred and be continuing) release that proportion of such additional security causing the said aggregate of the Market Value of the Vessel and the value of such additional security provided pursuant to this Clause to exceed the Relevant Percentage and shall execute and procure the execution of such documents in connection therewith as the Borrower may reasonably require.

 

Clauses 5.5, 5.6 and 5.7 shall apply, mutatis mutandis, to any prepayment made pursuant to this Clause and the value of any additional security provided pursuant to this Clause shall be reasonably determined by the Lender in its discretion except that cash shall be valued at its full face value.  For the purpose of determining the Market Value of the Vessel pursuant to this Clause the Borrower shall provide to the Lender (at the Borrower’s expense), annually throughout the Facility Period commencing on the Delivery Date and on each anniversary of the Delivery Date, a valuation determining the Vessel’s Market Value provided that if the Borrower and the Lender disagree on the Market Value contained in such valuation, the Lender shall have the right to appoint another reputable ship sale and purchase broker to prepare a second valuation (at the Borrower’s expense) and the Market Value shall be the average of the two valuations so obtained.  Such valuation or valuations (as the case may be) shall be addressed to the Lender by a reputable sale and purchase shipbroker approved by the Lender and shall be prepared without physical inspection of the Vessel on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and a willing buyer free of any charter or other contract of employment.

 

  

38

  

 

 

	
  

	
9.2.2

	
Financial statements  The Borrower will supply to the Lender, without request, (i) the annual financial statements of each of the Borrower and the Guarantor for each of their respective financial years ending during the Facility Period, containing (amongst other things) their profit and loss account for, and balance sheet at the end of, each such financial year, prepared in accordance with International Financial Reporting Standards consistently applied, and audited by KPMG or such other firm of chartered accountants (or equivalent) acceptable to the Lender (which acceptance shall not be unreasonably withheld), in each case within one hundred and eighty (180) days of the end of the financial year to which they relate, and (ii) copies of their semi-annual management accounts, no later than ninety (90) days from the end of the six month period to which they relate.

 

	
  

	
9.2.3

	
Other information  The Borrower will promptly supply to the Lender copies of all financial and other information from time to time given by the Borrower to its shareholders and such information and explanations as the Lender may from time to time require in connection with the operation of the Vessel and the Borrower’s profit and liquidity, and will procure that the Lender be given the like information and explanations relating to the Corporate Guarantor.

 

	
  

	
9.2.4

	
Inspection of records  The Borrower will permit the inspection of its financial records and accounts from time to time by the Lender or its nominee.

 

	
  

	
9.2.5

	
Pari passu obligations  The Borrower will ensure that, throughout the Facility Period, the obligations of the Borrower and the Corporate Guarantor under or pursuant to the Security Documents rank at least pari passu with all other existing or future indebtedness, obligations or liabilities of the Borrower and the Corporate Guarantor, other than any obligations of the Borrower to the Corporate Guarantor which are subordinated to the Indebtedness or the Hedging Liabilities or any mandatorily preferred by law.

 

 

  

39

  

 

 

	
  

	
9.2.6

	
Notification of Event of Default  The Borrower will, upon becoming aware of the same, immediately notify the Lender in writing of the occurrence of any Event of Default or Potential Event of Default.

 

	
  

	
9.2.7

	
Subordination of Debt  The Borrower agrees that any liability of the Borrower to the Corporate Guarantor or any other member of the Samco Group shall, save as regards any application of surplus earnings under Clause 10.7 below in respect of any such liability, be fully subordinated to the Indebtedness and the Hedging Liabilities and shall procure an acknowledgement of any such creditor in favour of the Lender in such terms as the Lender shall require.

 

	
  

	
9.2.8

	
Maintenance of corporate status The Borrower shall and shall procure that the Corporate Guarantor shall maintain its corporate status in good standing and if so requested by the Lender will provide the Lender with evidence thereof.

 

	
  

	
9.2.9

	
Notification of litigation The Borrower shall and shall procure that the Corporate Guarantor shall promptly notify the Lender with full details of any litigation commenced by or against the Borrower or the Corporate Guarantor in respect of or relating to an amount or property having a value of more than one million Dollars ($1,000,000) in relation to the Borrower and five million Dollars ($5,000,000) in relation to the Corporate Guarantor or where any injunction affecting any party to such litigation is sought.

 

	
  

	
9.3

	
Vessel Covenants

 

	
  

	
9.3.1

	
Registration of Vessel The Borrower undertakes to maintain the registration of the Vessel under Marshall Islands flag for the duration of the Facility Period.

 

	
  

	
9.3.2

	
Evidence of current COFR/Trading to a Restricted Area  The Borrower will promptly notify the Lender if at any time during the Facility Period it is proposed that the Vessel trade to a Restricted Area (the “Notification”) and will provide the Lender with such evidence as the Lender may reasonably require that the Vessel has a valid and current Certificate of Financial Responsibility pursuant to the United States Oil Pollution Act 1990 or equivalent document (if required) under the law of the jurisdiction(s) within the Restricted Area to which it is proposed that the Vessel trades.

 

 

  

40

  

 

 

	
  

	
9.3.3

	
ISM Code compliance   The Borrower will:

 

	
  

	
(a)

	
procure that the Vessel remains for the duration of the Facility Period subject to a SMS;

 

	
  

	
(b)

	
maintain a valid and current SMC for the Vessel throughout the Facility Period and provide a copy to the Lender;

 

	
  

	
(c)

	
procure that the ISM Company maintains a valid and current DOC throughout the Facility Period and provide a copy to the Lender; and

 

	
  

	
(d)

	
provide the Lender on its demand with such information and documentation regarding ISM Code compliance as the Lender may reasonably require.

 

	
  

	
9.3.4

	
ISPS Code compliance   The Borrower will:

 

	
  

	
(a)

	
for the duration of the Facility Period comply with the ISPS Code in relation to the Vessel and procure that the Vessel and the ISPS Company comply with the ISPS Code;

 

	
  

	
(b)

	
maintain a valid and current ISSC for the Vessel throughout the Facility Period and provide a copy to the Lender; and

 

	
  

	
(c)

	
provide the Lender on its demand with such information and documentation regarding ISPS compliance as the Lender may reasonably require.

 

	
  

	
9.3.5

	
Annex VI compliance   The Borrower will:

 

	
  

	
(a)

	
for the duration of the Facility Period comply with Annex VI in relation to the Vessel and procure that the Vessel’s master and crew are familiar with, and that the Vessel complies with, Annex VI;

 

 

  

41

  

 

 

	
  

	
(b)

	
maintain a valid and current IAPPC for the Vessel throughout the Facility Period and provide a copy to the Lender; and

 

	
  

	
(c)

	
provide the Lender on its demand with such information and documentation regarding IAPPC compliance as the Lender may reasonably require.

 

	
10

	
Earnings Account and Retention Accounts

 

	
  

	
10.1

	
Maintenance of Accounts  The Borrower shall maintain the Accounts with the Lender from the date of advance of the Delivery Drawing and for the duration of the balance of the Facility Period free of Encumbrances, other than as created by or pursuant to the Security Documents.  The Borrower shall ensure that from the Delivery Date and throughout the remainder of the Facility Period the appropriate Minimum Operating Balance remains credited to the Earnings Account.  Amounts standing to the credit of the Accounts shall, (unless otherwise agreed between the Lender and the Borrower) bear interest at the rates from time to time offered by the Lender to its customers for Dollar deposits in comparable amounts for comparable periods. Interest shall accrue on the Accounts from day to day and be calculated on the basis of actual days elapsed and a 360 day year and shall be credited to the Accounts at such times as the Lender and the Borrower shall agree.

 

	
  

	
10.2

	
Earnings  The Borrower shall procure that unless and until an Event of Default or a Potential Event of Default shall have occurred and be continuing (in which event the Lender may designate such account as it shall in its discretion determine for the receipt of Earnings) there is credited to the Earnings Account all Earnings relating to the Vessel.

 

	
  

	
10.3

	
Monthly Retentions  With effect from the Delivery Date the day in each calendar month during the Facility Period which numerically corresponds to the Delivery Date commencing as from the second month after the Delivery Date (or, in any month in which there is no such day, on the last Business Day of that month), the Borrower shall procure that there is transferred from the Earnings Account (and irrevocably authorises the Lender to transfer from the Earnings Account to the Retention Account):-

 

 

  

42

  

 

 

	
  

	
10.3.1

	
one-third of the amount of the next Repayment Instalment due on the next Repayment Date; and

 

	
  

	
10.3.2

	
the amount of interest due on the next Interest Payment Date in respect of the Loan or any part thereof on which interest is payable at a floating rate divided by the number of months between the last Interest Payment Date and the Interest Payment Date in question; and

 

	
  

	
10.3.3

	
the amount payable under the Hedging Agreement on the next Interest Payment Date in respect of any part of the Loan to which a Hedging Transaction relates, divided by the number of months between the last Interest Payment Date and the Interest Payment Date in question.

 

	
  

	
10.4

	
Additional payments to Earning Accounts  If for any reason the amount standing to the credit of the Earnings Account shall be insufficient to make any monthly retentions and transfers to the Retention Account required by Clause 10.3, the Borrower shall, without demand, procure that there is credited to the Retention Account, on the date on which the relevant amount would have been transferred from the Earnings Account, an amount equal to the amount of the shortfall.

 

	
  

	
10.5

	
Application of Retention Amounts  The Borrower shall procure that there is transferred from the Retention Account and the Borrower irrevocably authorises the Lender to transfer from the Retention Account to the Lender:-

 

	
  

	
10.5.1

	
on each Interest Payment Date, the amount of interest and/or Hedging Liabilities then due; and

 

	
  

	
10.5.2

	
on each Repayment Date, the amount of the Repayment Instalment then due.

 

	
  

	
10.6

	
Borrower’s obligations not affected  If for any reason the amount standing to the credit of the Accounts shall be insufficient to pay any Repayment Instalment or to make any payment of interest when due in accordance with this Clause, the Borrower’s obligation to pay that Repayment Instalment or to make that payment of interest shall not be affected.

 

 

  

43

  

 

 

	
  

	
10.7

	
Release of surplus  Any amount remaining to the credit of the Earnings Account after compliance with Clause 10.1 and following the making of the transfers and retentions required by Clause 10.3 shall subject to Clause 5.9 and unless a Potential Event of Default or an Event of Default shall have occurred and be continuing, be released to or to the order of the Borrower.

 

	
  

	
10.8

	
Restriction on withdrawal  During the Facility Period no sum may be withdrawn from the Accounts (except in accordance with this Clause 10 and Clause 5.9) without the prior written consent of the Lender.

 

	
11

	
Events Of Default

 

	
  

	
11.1

	
The Lender’s rights  If any of the events set out in Clause 11.2 occurs and for so long as the same is continuing, the Lender may, by notice to the Borrower declare the Lender to be under no further obligation to the Borrower under or pursuant to this Agreement and may declare all or any part of the Indebtedness (including such unpaid interest as shall have accrued) and any Hedging Liabilities (or the part of the Hedging Liabilities referred to in the Lender’s notice) to be immediately payable, in which event the Indebtedness (or the part of the Indebtedness referred to in the Lender’s notice) and any Hedging Liabilities (or the part of the Hedging Liabilities referred to in the Lender’s notice) shall immediately become due and payable without any further demand or notice of any kind.

 

	
  

	
11.2

	
Events of Default  The events referred to in Clause 11.1 are:-

 

	
  

	
11.2.1

	
payment default  if the Borrower or any other of the Security Parties defaults in the payment of any part of the Indebtedness or the Hedging Liabilities at the place and in the currency in which it is expressed to be payable when due or, if no due date for payment has been specified in the Security Documents, within five (5) Business Days after demand has been made on the Borrower by the Lender for payment provided that an Event of Default shall be deemed not to have occurred for a period of three (3) days after any payment was made if the Borrower or the Security Party in question has made the relevant payment in accordance with the relevant Security Document or the Hedging Agreement and it has not been received by the Lender due to a technical delay in the banking system; or

 

 

  

44

  

 

 

	
  

	
11.2.2

	
other default  if any of the Security Parties fails to observe or perform any of the covenants, conditions, undertakings, agreements or obligations on its part contained in any of the Security Documents or shall in any other way be in breach of or do or cause to be done any act repudiating or evidencing an intention to repudiate any of the Security Documents and, if the same is capable of remedy, that failure continues unremedied for a period of fifteen (15) Business Days after receipt by the Borrower of notice from the Lender requiring that failure to be remedied; or

 

	
  

	
11.2.3

	
misrepresentation or breach of warranty  if any representation or warranty made or repeated, or any other information given, by any of the Security Parties to the Lender in or leading up to or during the currency of any of the Security Documents or in or pursuant to any notice or other document delivered to the Lender under or pursuant to any of the Security Documents, is false or incorrect or misleading in any respect which the Lender in its reasonable discretion considers to be material and which shall have a materially adverse effect on the Lender; or

 

	
  

	
11.2.4

	
execution  if a distress or execution or other process of a court or authority is levied on any of the property of any of the Security Parties before or after final judgment or by order of any competent court or authority and is not satisfied within ten (10) days of levy; or

 

	
  

	
11.2.5

	
insolvency events  if any of the Security Parties:-

 

	
  

	
(a)

	
resolves to appoint, or applies for, or consents to, the appointment of, a receiver, administrative receiver, trustee, administrator or liquidator of itself or of all or a part of its assets; or

 

	
  

	
(b)

	
is unable or admits its inability to pay its debts as they fall due; or

 

	
  

	
(c)

	
makes a general assignment for the benefit of creditors or any class thereof or takes steps to obtain a moratorium from its creditors or any class thereof; or

 

	
  

	
(d)

	
ceases trading or threatens to cease trading in respect of a substantial part of its business; or

 

 

  

45

  

 

 

	
  

	
(e)

	
has appointed an Inspector under the Companies Act 1985 or any statutory provision which the Lender considers analogous thereto; or

 

	
  

	
11.2.6

	
insolvency proceedings  if any proceedings are commenced, or any order or judgment is given by any court, for the bankruptcy, liquidation, winding up, administration or re-organisation of any of the Security Parties or for the appointment of a receiver, administrative receiver, administrator, liquidator or trustee of any of the Security Parties or of all or a part of the assets of any of the Security Parties, or if any person appoints or purports to appoint such receiver, administrative receiver, administrator, liquidator or trustee; or

 

	
  

	
11.2.7

	
revocation or modification of consents etc.  if any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Security Parties to comply with any of their obligations in or pursuant to any of the Security Documents is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender reasonably considers is, or may be, prejudicial to the interests of the Lender, or ceases to remain in full force and effect and the Borrowers fail to provide the Lender with alternative security reasonably acceptable to the Lender within ten (10) Business Days of such revocation, withdrawal, withholding or modification arising; or

 

	
  

	
11.2.8

	
curtailment of business  if the business of any of the Security Parties is wholly or partially curtailed or suspended by any intervention by or under authority of any government, or if all or a substantial part of the undertaking, property or assets of any of the Security Parties is seized, nationalised, expropriated or compulsorily acquired by or under authority of any government; or

 

	
  

	
11.2.9

	
acceleration of other indebtedness  if any other indebtedness or obligation for borrowed money of either of the Borrower or the Corporate Guarantor for an amount of one million Dollars ($1,000,000) in aggregate becomes due or capable of being declared due prior to its stated maturity by reason of default on the part of the Borrower or the Corporate Guarantor, or is not repaid or satisfied at maturity; or

 

 

  

46

  

 

 

	
  

	
11.2.10

	
reduction of capital  if either of the Borrower or the Corporate Guarantor reduces its authorised or issued or subscribed capital; or

 

	
  

	
11.2.11

	
challenge to registration  if the registration of the Vessel or the Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or if the validity of the Mortgage is contested and the Borrower does not, within ten (10) Business Days of the Lender’s written notice requiring it to do so, procure that the Vessel be validly registered in a manner acceptable to the Lender and/or provide the Lender with such documents and evidence (including, without limitation, a new Mortgage and other new or additional Security Documents) as the Lender may reasonably require in order to maintain its security over the Vessel; or

 

	
  

	
11.2.12

	
war  if the country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion reasonably considers that, as a result, the security conferred by the Security Documents is materially prejudiced and the Borrower, does not, within ten (10) Business Days of the Lender’s written notice requiring it to do so, procure that the Vessel be registered under the laws and flag of a country acceptable to the Lender and provide the Lender with such additional documents and evidence (including, without limitations, new or additional Security Documents) as the Lender may reasonably require in order to maintain its security over the Vessel; or

 

	
  

	
11.2.13

	
material adverse change etc.  if anything is done or permitted or omitted to be done by either of the Borrower or the Corporate Guarantor which in the reasonable opinion of the Lender jeopardises or imperils the rights conferred on the Lender by the Security Documents, or if there occurs (in the reasonable opinion of the Lender) any material adverse change in the business, affairs or financial condition of either of the Borrower or the Corporate Guarantor from that pertaining at the date of this Agreement which may be reasonably considered to adversely affect the ability of either of the Borrower or the Corporate Guarantor to comply with its obligations; or

 

 

  

47

  

 

 

	
  

	
11.2.14

	
Permanent Vessel Registration if the Vessel is not permanently registered within two (2) months from its Delivery Date under the flag of the Marshall Islands or such other registry as the Lender may in its reasonable discretion approve; or

 

	
  

	
11.2.15

	
Hedging Agreement termination  if a notice is given by the Lender as Swap Provider under section 6(a) of the Hedging Agreement, or by any person under section 6(b)(iv) of the Hedging Agreement, in either case designating an Early Termination Date for the purpose of the Hedging Agreement; or

 

	
  

	
11.2.16

	
analogous events  if any event which (in the opinion of the Lender) is analogous to any of the events set out in Clause 11.2.5 or Clause 11.2.6 above shall occur.

 

	
12

	
Set-Off And Lien

 

	
  

	
12.1

	
Set-off  The Borrower irrevocably authorises the Lender at any time after all or any part of the Indebtedness and/or the Hedging Liabilities shall have become due and payable to set off without notice any liability of the Borrower to the Lender (whether present or future, actual or contingent, and irrespective of the branch or office, currency or place of payment) against any credit balance from time to time standing on any account of the Borrower (whether current or otherwise and whether or not subject to notice) with any branch of the Lender in or towards satisfaction of the Indebtedness and the Hedging Liabilities and, in the name of the Lender to do all acts (including, without limitation, converting or exchanging any currency) and execute all documents which may be required to effect such application.

 

	
  

	
12.2

	
Restrictions on withdrawal  Subject to Clause 10.7, in relation to any deposit or credit balance at any time on any account of the Borrower with the Lender, no such deposit or balance shall be repayable or capable of being assigned, mortgaged, charged or otherwise disposed of or dealt with by the Borrower during the Facility Period except in accordance with the Security Documents, but the Lender may from time to time permit the withdrawal of all or any part of any such deposit or balance without affecting the continued application of this Clause.

 

 

  

48

  

 

 

	
  

	
12.3

	
Application  Subject always to the application under Clause 5.6 of prepayments where no Event of Default has occurred and is continuing, the Borrower irrevocably authorises the Lender to apply all sums which the Lender may receive:-

 

	
  

	
12.3.1

	
pursuant to a sale or other disposition of a Vessel or any right, title or interest in the Vessel; or

 

	
  

	
12.3.2

	
otherwise arising under or in connection with any of the Security Documents

 

in or towards satisfaction, or by way of retention on account, of the Indebtedness and the Hedging Liabilities, in such manner as the Lender may in its discretion determine, provided that any part of the sums recovered relating to the Hedging Liabilities shall be satisfied or retained only after every part of the Indebtedness for the time being due and payable has been satisfied in full.

 

Any surplus remaining after full and final satisfaction of the Indebtedness and any Hedging Liabilities shall be paid to the Borrower or to such other persons as the Borrower may direct which direction shall be deemed a warranty by the Borrower hereunder that such other persons are entitled thereto.

 

	
  

	
12.4

	
Master Agreement rights  The rights conferred on the Lender as Swap Provider by this Clause 12 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off conferred on the Lender as Swap Provider by the Hedging Agreement.

 

	
13

	
Assignment and Sub-Participation

 

	
  

	
13.1

	
Right to assign The Lender may assign or transfer all or any of its rights and/or obligations under or pursuant to this Agreement to any other branch of that Bank or with the consent of the Borrower (not to be unreasonably withheld provided, it will be deemed reasonable for the Borrower to withhold consent where such assignment would give rise to an increased obligation of the Borrower under this Agreement) to any other bank or financial institution, and may grant sub-participations in all or any part of the Indebtedness and/or the Hedging Liabilities.  The Borrower shall have no right to assign any of its rights or obligations in respect of the Indebtedness or the Hedging Liabilities or otherwise under any of the Security Documents without the prior written consent of the Lender.

 

 

  

49

  

 

 

	
  

	
13.2

	
If:

 

	
  

	
(a)

	
the Lender assigns or transfers any of its rights or obligations pursuant to clause 13.1 above voluntarily and otherwise than pursuant to the application of Clause 14 below; and

 

	
  

	
(b)

	
as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the assignee or transferee in excess of the amount it would have had to pay had there been no such transfer,

 

then the assignee or transferee is only entitled to receive payment under those clauses to the same extent as the Borrower would have been obliged to pay if the assignment, transfer or change had not occurred.

 

	
  

	
13.3

	
Borrower’s co-operation  The Borrower will co-operate fully with the Lender in connection with any assignment, transfer or sub-participation consented to; will (at the request and expense of the relevant bank(s)) execute and procure the execution of such documents as the Lender may require in connection therewith; and irrevocably authorise the Lender to disclose to any proposed assignee, transferee or sub-participant (whether before or after any assignment, transfer or sub-participation and whether or not any assignment, transfer or sub-participation shall take place) all information relating to the Security Parties, the Loan or the Security Documents which the Lender may in its discretion consider necessary or desirable provided always that the Borrower may require any proposed assignee, transferee or sub-participant to agree that all such information is confidential prior to any such disclosure.

 

	
  

	
13.4

	
Rights of assignee  Any assignee, transferee or sub-participant of the Lender shall (unless limited by the express terms of the assignment, transfer or sub-participation) take the full benefit of every provision of the Security Documents benefiting that person.

 

	
14

	
Payments, Mandatory Prepayment, Reserve Requirements and Illegality

 

	
  

	
14.1

	
Payments  All amounts payable by the Borrower under or pursuant to any of the Security Documents shall be paid to such accounts at such banks as the Lender may from time to time direct to the Borrower, and (unless payable in any other Currency of Account) shall be paid in Dollars in same day funds (or such funds as are required by the authorities in the United States of America for settlement of international payments for immediate value).  Payments shall be deemed to have been received by the Lender on the date on which the Lender receives authenticated advice of receipt, unless that advice is received by the Lender on a day other than a Business Day or at a time of day (whether on a Business Day or not) when the Lender in its discretion reasonably considers that it is impossible or impracticable for the Lender to utilise the amount received for value that same day, in which event the payment in question shall be deemed to have been received by the Lender on the Business Day next following the date of receipt of advice by the Lender.

 

 

  

50

  

 

 

	
  

	
14.2

	
No deductions or withholdings  All payments (whether of principal or interest or otherwise) to be made by the Borrower pursuant to the Security Documents shall, subject only to Clause 14.3, be made free and clear of and without deduction for or on account of any Taxes or other deductions, withholdings, restrictions, conditions or counterclaims of any nature.

 

	
  

	
14.3

	
Grossing-up  If at any time any law to which the Borrower is subject requires (or is interpreted to require) the Borrower to make any deduction or withholding from any payment, or to change the rate or manner in which any required deduction or withholding is made, the Borrower will promptly notify the Lender and, simultaneously with making that payment, will pay to the Lender whatever additional amount (after taking into account any additional Taxes on, or deductions or withholdings from, or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, the Lender receives a net sum equal to the sum which it would have received had no deduction or withholding been made.

 

	
  

	
14.4

	
Evidence of deductions  If at any time the Borrower is required by law to which the Borrower is subject to make any deduction or withholding from any payment to be made by it pursuant to any of the Security Documents, the Borrower will pay the amount required to be deducted or withheld to the relevant authority within the time allowed under the applicable law and will, no later than thirty days after making that payment, deliver to the Lender an original receipt issued by the relevant authority, or other evidence acceptable to the Lender, evidencing the payment to that authority of all amounts required to be deducted or withheld.

 

 

  

51

  

 

 

	
  

	
14.5

	
Rebate  If the Borrower makes any deduction or withholding from any payment under or pursuant to any of the Security Documents, and the Lender subsequently receives a refund or allowance from any tax authority which the Lender identifies as being referable to that deduction or withholding, the Lender shall, as soon as reasonably practicable, pay to the Borrower an amount equal to the amount of the refund or allowance received, if and to the extent that it may do so without prejudicing its right to retain that refund or allowance and without putting itself in any worse financial position than that in which it would have been had the deduction or withholding not been required to have been made.  Nothing in this Clause shall be interpreted as imposing any obligation on the Lender to apply for any refund or allowance nor as restricting in any way the manner in which the Lender organises its tax affairs, nor as imposing on the Lender any obligation to disclose to the Borrower any information regarding its tax affairs or tax computations.

 

	
  

	
14.6

	
Adjustment of due dates  If any payment or transfer of funds to be made under any of the Security Documents, other than a payment of interest on the Loan or a payment pursuant to the Hedging Agreement shall be due on a day which is not a Business Day, that payment shall be made on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month in which event the payment shall be made on the next preceding Business Day).  Any such variation of time shall be taken into account in computing any interest in respect of that payment.

 

	
  

	
14.7

	
Increased Cost  If, after the date of this Agreement, by reason of the introduction of any law to which a Security Party is subject, or any change in any law to which a Security Party is subject, or the interpretation or administration of any law to which a Security Party is subject, or in compliance with any request or requirement from any central bank or any fiscal, monetary or other authority with whose requests or requirements the Lender customarily complies:-

 

	
  

	
14.7.1

	
the Lender shall be subject to any Tax with respect to payments of all or any part of the Indebtedness or the Hedging Liabilities; or

 

	
  

	
14.7.2

	
the basis of Taxation of payments to the Lender in respect of all or any part of the Indebtedness or the Hedging Liabilities shall be changed; or

 

 

  

52

  

 

 

	
  

	
14.7.3

	
any reserve requirements shall be imposed, modified or deemed applicable against assets held by or deposits in or for the account of or loans by any branch of the Lender; or

 

	
  

	
14.7.4

	
the manner in which the Lender allocates capital resources to its obligations under this Agreement and/or the Hedging Agreement or any ratio (whether cash, capital adequacy, liquidity or otherwise) which the Lender is required or requested to maintain shall be affected; or

 

	
  

	
14.7.5

	
there is imposed on the Lender any other condition in relation to the Indebtedness or the Hedging Liabilities or the Security Documents;

 

and the result of any of the above shall be to increase the cost to the Lender of making or maintaining all or any part of the Loan or maintaining in its capacity as Swap Provider its obligations under the Hedging Agreement, or to cause the Lender to suffer (in its reasonable opinion) a material reduction in the rate of return on its overall capital below the level which it reasonably anticipated at the date of this Agreement and which it would have been able to achieve but for its entering into this Agreement or the Hedging Agreement and/or performing its obligations under this Agreement or the Hedging Agreement, the Lender shall notify the Borrower (such notification to include the certificate described hereafter) and the Borrower shall from time to time pay to the Lender within three (3) Business Days of a demand by the Lender the amount which shall compensate the Lender for such additional cost or reduced return.  A certificate signed by an authorised signatory of the Lender, setting out the amount of that payment and the basis of its calculation shall be submitted to the Borrower and shall be conclusive evidence of such amount save for manifest error or on any question of law.

 

	
  

	
14.8

	
Clause 14.7 does not apply to the extent any additional or increased cost is:

 

	
  

	
14.8.1

	
attributable to a Tax Deduction required by law to be made by the Borrower;

 

	
  

	
14.8.2

	
compensated for by Clause 16.8 (or would have been compensated for under that clause but was not so compensated solely because any of the exclusions in that clause applied);

 

 

  

53

  

 

 

	
  

	
14.8.3

	
attributable to the wilful breach by the Lender or its affiliates of any law or regulation; or

 

	
  

	
14.8.4

	
attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, the Lender or any of its affiliates).

 

	
  

	
14.9

	
Illegality and impracticality  Notwithstanding anything contained in the Security Documents, the obligations of the Lender to advance or maintain the Loan shall terminate in the event that a change in any law or in the interpretation of any law by any authority charged with its administration shall make it unlawful or, in the reasonable opinion of any Bank, impracticable for the Lender to advance or maintain the Loan or any Hedging Transaction.  In that event the Lender shall, by written notice to the Borrower, declare the Lender’s obligations under this Agreement and the Hedging Agreement to be immediately terminated.  If all or any part of the Loan shall have been advanced by the Lender to the Borrower, the Indebtedness (including all accrued interest) shall be prepaid no later than the later of (i) thirty (30) days from the date of such notice and (ii) the date on which such illegality takes effect.  If any Hedging Transaction has been entered into by the Lender as Swap Provider with the Borrower, all Hedging Liabilities (including all accrued interest) shall be paid no later than the later of (i) thirty (30) days from the date of such notice or (ii) the date on which such illegality takes effect.  Clause 5.5 shall apply to that prepayment if it is made on a day other than the last day of an Interest Period.

 

	
  

	
14.10

	
Changes in market circumstances  If at any time the Lender reasonably determines (which determination shall be final and conclusive and binding on the Borrower) that, by reason of circumstances affecting the London Interbank market, adequate and fair means do not exist for ascertaining the rate of interest on the Loan pursuant to this Agreement:-

 

	
  

	
14.10.1

	
the Lender shall give notice to the Borrower of the occurrence of such event; and

 

 

  

54

  

 

 

	
  

	
14.10.2

	
the Lender shall as soon as reasonably practicable certify to the Borrower in writing the effective cost to the Lender of maintaining the Loan for such further period as shall be selected by the Lender and the rate of interest payable by the Borrower for that period; or, if that is not acceptable to the Borrower,

 

	
  

	
14.10.3

	
the Lender will negotiate with the Borrower in good faith with a view to modifying this Agreement to provide a substitute basis for the Loan which is financially a substantial equivalent to the basis provided for in this Agreement.

 

If, within thirty days of the giving of the notice referred to in Clause 14.10.1, the Borrower and the Lender fail to agree in writing on a substitute basis for the Loan, the Borrower will immediately prepay the Indebtedness.  Clause 5.5 shall apply to that prepayment if it is made on a day other than the last day of an Interest Period.

 

	
  

	
14.11

	
Non-availability of currency  If the Lender is for any reason unable to obtain Dollars in the London Interbank market and is, as a result, or as a result of any other contingency affecting the London Interbank market, unable to advance or maintain all or any part of the Loan in Dollars, the Lender shall give notice to the Borrower and the Lender’s obligations to make the Loan available shall immediately cease.  In that event, if all or any part of the Loan shall have been advanced by the Lender to the Borrower, the Lender will negotiate with the Borrower in good faith with a view to establishing a mutually acceptable basis for funding the Loan from an alternative source.  If the Lender and the Borrower have failed to agree in writing on a basis for funding the Loan from an alternative source by 11.00 a.m. on the second Business Day prior to the end of the then current Interest Period, the Borrower will (without prejudice to its other obligations under or pursuant to this Agreement, including, without limitation, its obligation to pay interest on the Loan, arising on the expiry of the then current applicable Interest Period) prepay the Indebtedness and the Hedging Liabilities to the Lender on the expiry of the then current applicable Interest Period.

 

 

  

55

  

 

 

	
15

	
Communications

 

	
  

	
15.1

	
Method Any Communication may be given, delivered, made or served (as the case may be) under or in relation to this Agreement by letter or fax and shall be in the English language and sent addressed:-

 

	
  

	
15.1.1

	
in the case of the Lender at its address at the head of this Agreement (fax no: + 331 41 89 29 87) marked for the attention of Stephane Pattonieri; and for administrative matters (fax no: + 331 41 89 19 34) marked for the attention of Sylvie Godet-Couery, Shipping Group Middle Office; in the case of the Lender as Swap Provider in accordance with the Hedging Agreement;

 

	
  

	
15.1.2

	
in the case of the Borrower by the Lender only to the Communications Address with a copy to Samco (Services) Limited at the Address for Service;

 

or to such other address or fax number as the Lender or the Borrower may designate for themselves by written notice to the other.

 

	
  

	
15.2

	
Timing  A Communication shall be deemed to have been duly given, delivered, made or served to or on, and received by, the Borrower, or as the case may be, the Lender:-

 

	
  

	
15.2.1

	
in the case of a fax when the sender receives one or more transmission reports showing the whole of the Communication to have been transmitted to the correct fax number;

 

	
  

	
15.2.2

	
if delivered to an officer of the Borrower or, as the case may be, the Lender, or left at the Communications Address in the case of the Borrower, or in the case of the copy Communication to be provided to Samco (Services) Limited left at the Address for Service, or at the address for the Lender given at the head of this Agreement in the case of the Lender and/or the Lender, at the time of delivery or leaving.

 

	
16

	
General Indemnities

 

	
  

	
16.1

	
Currency  In the event of the Lender receiving or recovering any amount payable under any of the Security Documents in a currency other than the Currency of Account, and if the amount received or recovered is insufficient when converted into the Currency of Account at the date of receipt to satisfy in full the amount due, the Borrower shall, on the Lender’s written demand, pay to the Lender such further amount in the Currency of Account as is sufficient to satisfy in full the amount due and that further amount shall be due to the Lender or to the Lender as Swap Provider (as the case may be) as a separate debt under this Agreement and the Hedging Agreement (as the case may be).

 

 

  

56

  

 

 

	
  

	
16.2

	
Costs and expenses  The Borrower will, within fourteen days of the Lender’s written demand, reimburse the Lender for all reasonable costs and expenses (including Value Added Tax or any similar or replacement tax if applicable) of and incidental to:-

 

	
  

	
16.2.1

	
the negotiation, preparation, execution and registration of the Security Documents (whether or not any of the Security Documents are actually executed or registered and whether or not all or any part of the Loan shall have been advanced);

 

	
  

	
16.2.2

	
any amendments, addenda or supplements to any of the Security Documents (whether or not completed);

 

	
  

	
16.2.3

	
any other documents which may at any time be reasonably required by the Lender to give effect to any of the Security Documents or which the Lender is entitled to call for or obtain pursuant to any of the Security Documents (including, without limitation, all premiums and other sums from time to time payable by the Lender in relation to the Mortgagees’ Insurances and any Mortgagees’ Additional Perils Insurances that may be effected by the Lender); and

 

	
  

	
16.2.4

	
the exercise of the rights, powers, discretions and remedies of the Lender, under or pursuant to the Security Documents other than costs incurred in the administration of the Loan of a day to day nature.

 

	
  

	
16.3

	
Events of Default  The Borrower shall indemnify the Lender from time to time on demand against all losses and costs incurred or sustained by the Lender (including when acting as Swap Provider) as a consequence of any Potential Event of Default or an Event of Default, including (without limitation) any Break Costs provided always that the Lender shall pay to the Borrower any Break Gains following full and final settlement of the Indebtedness and subject always to the right of set-off on the part of the Lender.

 

 

  

57

  

 

 

	
  

	
16.4

	
Funding costs  The Borrower shall indemnify the Lender from time to time on demand against all losses and costs incurred or sustained by the Lender if, for any reason, any Drawing is not advanced to the Borrower after the relevant Drawdown Notice has been given to the Lender, or is advanced on a date other than that requested in the Drawdown Notice (unless, in either case, as a result of any negligence or wilful default by the Lender) including (without limitation) any Break Costs provided always that the Lender shall pay to the Borrower any Break Gains following full and final settlement of the Indebtedness and subject always to the right of set-off on the part of the Lender.

 

	
  

	
16.5

	
Protection and enforcement  The Borrower shall indemnify the Lender from time to time on demand against all losses, costs and liabilities which the Lender may from time to time sustain, incur or become liable for in or about the protection, maintenance or enforcement of the rights conferred on the Lender by the Security Documents or in or about the exercise or purported exercise by the Lender of any of the rights, powers, discretions or remedies vested in it under or arising out of the Security Documents, including (without limitation) any losses, costs and liabilities which the Lender may from time to time sustain, incur or become liable for by reason of the Lender being mortgagees of the Vessel and/or a lender to the Borrower, or by reason of the Lender being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the Vessel except to the extent that those losses, costs or liabilities shall have been sustained or incurred as a result of the Lender’s wilful misconduct or gross negligence.

 

	
  

	
16.6

	
Liability under Payment Confirmation  Except where the Lender is obliged to advance under this Agreement and in accordance herewith an amount equivalent to the sixth instalment under the Contract and notwithstanding any undertaking in that respect incorporated in the letter referred to in Clause 2.7.1 above (the “Payment Confirmation”), the Borrower shall indemnify the Lender from time to time on demand against all losses (excluding loss of profit), costs and liabilities which the Lender may from time to time sustain, incur or become liable for as result (whether directly or indirectly) of the issue by the Lender of the Payment Confirmation or in or about the exercise or purported exercise by the Builder of any of the rights, powers, discretions or remedies vested in it under or arising out of the Payment Confirmation and the undertaking therein contained.

 

 

  

58

  

 

 

	
  

	
16.7

	
Liabilities of Lender  The Borrower will from time to time reimburse the Lender on demand for all sums which the Lender may pay or become actually or contingently liable for on account of the Borrower or in connection with the Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which the Lender may pay or guarantees which the Lender may give in respect of the Insurances, any expenses incurred by the Lender in connection with the maintenance or repair of the Vessel or in discharging any lien, bond or other claim relating in any way to the Vessel, and any sums which the Lender may pay or guarantees which it may give to procure the release of the Vessel from arrest or detention except to the extent that those sums shall have been incurred as a result of the Lender’s wilful misconduct or gross negligence.

 

	
  

	
16.8

	
Mitigation of Loss  Notwithstanding Clause 14, if in relation to the Lender, circumstances arise which would result in (a) any deduction, withholding or payment of the nature referred to in Clause 14.3; or (b) any increased cost of the nature referred to in Clause 14.7; or a notification pursuant to Clause 14.8, or any payment under Clause 16.6 or Clause 16.8 then, without limiting, reducing or otherwise qualifying the rights of the Lender, the Lender shall consult with the Borrower and take such reasonable steps as may be open to it to mitigate the effects of such circumstances provided that the Lender shall not be under any obligation to take any such action if, in its opinion, to do so might have an adverse effect upon its business, operation or financial condition or would involve it in any unlawful activity or any activity that is contrary to any request, guidance or directive of any competent authority (whether or not having the force of law) or would involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

 

	
  

	
16.9

	
Taxes  The Borrower shall pay all Taxes to which all or any part of the Indebtedness or any Hedging Liabilities or any of the Security Documents may be at any time subject and shall indemnify the Lender on demand against all liabilities, costs, claims and expenses resulting from any omission to pay or delay in paying any such Taxes.

 

 

  

59

  

 

 

	
17

	
Miscellaneous

 

	
  

	
17.1

	
Waivers  No failure or delay on the part of the Lender in exercising any right, power, discretion or remedy under or pursuant to any of the Security Documents, nor any actual or alleged course of dealing between the Lender and the Borrower, shall operate as a waiver of, or acquiescence in, any default on the part of any Security Party, unless expressly agreed to do so in writing by the Lender, nor shall any single or partial exercise by the Lender of any right, power, discretion or remedy preclude any other or further exercise of that right, power, discretion or remedy, or the exercise by the Lender of any other right, power, discretion or remedy.

 

	
  

	
17.2

	
No oral variations  No variation or amendment of any of the Security Documents shall be valid unless in writing and signed on behalf of the Lender.

 

	
  

	
17.3

	
Severability  If at any time any provision of any of the Security Documents is invalid, illegal or unenforceable in any respect that provision shall be severed from the remainder and the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way.

 

	
  

	
17.4

	
Successors etc.  The Security Documents shall be binding on the Security Parties and on their successors and permitted transferees and assignees, and shall inure to the benefit of the Lender and its successors, transferees and assignees.

 

	
  

	
17.5

	
Further assurance  If any provision of the Security Documents shall be invalid or unenforceable in whole or in part by reason of any present or future law to which any relevant Security Party is subject or any decision of any court, or if the documents at any time held by the Lender are reasonably considered by the Lender for any reason insufficient to carry out the terms of this Agreement and the Hedging Agreement, then from time to time the Borrower will promptly, on demand by the Lender, execute or procure the execution of such further documents as in the reasonable opinion of the Lender are necessary to provide adequate security for the repayment of the Indebtedness and the Hedging Liabilities.

 

	
  

	
17.6

	
Other arrangements  The Lender may, without prejudice to its other rights under or pursuant to the Security Documents, at any time and from time to time, on such terms and conditions as it may in its discretion determine, and without notice to the Borrower, grant time or other indulgence to, or compound with, any other person liable (actually or contingently) to the Lender and/or the Lender in respect of all or any part of the Indebtedness and the Hedging Liabilities, and may release or renew negotiable instruments and take and release securities and hold funds on realisation or suspense account without affecting the liabilities of the Borrower or the rights of the Lender under or pursuant to the Security Documents.

 

 

  

60

  

 

 

	
  

	
17.7

	
Advisers  The Borrower irrevocably authorises the Lender, at any time and from time to time during the Facility Period, to consult insurance advisers on any matters relating to the Insurances, including, without limitation, the collection of insurance claims, and from time to time to consult or retain advisers or consultants to monitor or advise on any other claims relating to the Vessel.  The Borrower will provide such advisers and consultants with all information and documents which they may from time to time require and will reimburse the Lender on demand for all costs and expenses reasonably incurred by the Lender in connection with the consultation or retention of such advisers or consultants PROVIDED THAT the Lender shall only consult with such advisers and consultants once per calendar year at the Borrower’s expense unless there is any material change in any of the Insurances or in the insurance markets or as regards any of the underwriters and/or brokers under any of the Insurances or a Potential Event of Default or an Event of Default shall have occurred and be continuing in which case all such consultations shall be at the Borrower’s expense.

 

	
  

	
17.8

	
Delegation  The Lender may at any time and from time to time delegate to any person any of its rights, powers, discretions and remedies pursuant to the Security Documents on such terms as it may consider appropriate (including the power to sub-delegate).

 

	
  

	
17.9

	
Rights etc. cumulative  Every right, power, discretion and remedy conferred on the Lender under or pursuant to the Security Documents shall be cumulative and in addition to every other right, power, discretion or remedy to which they may at any time be entitled by law or in equity.  The Lender may exercise each of its rights, powers, discretions and remedies as often and in such order as it deem reasonably appropriate.  The exercise or the beginning of the exercise of any right, power, discretion or remedy shall not be interpreted as a waiver of the right to exercise that or any other right, power, discretion or remedy either simultaneously or subsequently.

 

 

  

61

  

 

 

	
  

	
17.10

	
No enquiry  The Lender shall not be concerned to enquire into the powers of the Security Parties or of any person purporting to act on behalf of any of the Security Parties, even if any of the Security Parties or any such person shall have acted in excess of their powers or if their actions shall have been irregular, defective or informal, whether or not the Lender had notice thereof.

 

	
  

	
17.11

	
Continuing security  The security constituted by the Security Documents shall be continuing and shall not be satisfied by any intermediate payment or satisfaction until the Indebtedness and the Hedging Liabilities shall have been repaid in full and the Lender shall not be under any further actual or contingent liability to any third party in relation to the Vessel, the Insurances, Earnings or Requisition Compensation or any other matter referred to in the Security Documents.

 

	
  

	
17.12

	
Security cumulative  The security constituted by the Security Documents shall be in addition to any other security now or in the future held by the Lender, for or in respect of all or any part of the Indebtedness and the Hedging Liabilities, and shall not merge with or prejudice or be prejudiced by any such security or any other contractual or legal rights of the Lender, nor affected by any irregularity, defect or informality, or by any release, exchange or variation of any such security.  Section 93 of the Law of Property Act 1925 and all provisions which the Lender considers analogous thereto under the law of any other relevant jurisdiction shall not apply to the security constituted by the Security Documents.

 

	
  

	
17.13

	
No liability  Neither the Lender nor any agent or employee of the Lender, nor any receiver and/or manager appointed by the Lender, shall be liable for any losses which may be incurred in or about lawful and proper exercise of any of the rights, powers, discretions or remedies of the Lender under or pursuant to the Security Documents nor liable as mortgagee in possession for any loss on realisation or for any neglect or default of any nature for which a mortgagee in possession might otherwise be liable.

 

	
  

	
17.14

	
Rescission of payments etc.  Any discharge, release or reassignment by the Lender of any of the security constituted by, or any of the obligations of any Security Party contained in, any of the Security Documents shall be (and be deemed always to have been) void if any act (including, without limitation, any payment) as a result of which such discharge, release or reassignment was given or made is subsequently wholly or partially rescinded or avoided by operation of any law to which such Security Party is subject.

 

 

  

62

  

 

 

	
  

	
17.15

	
Subsequent Encumbrances  If the Lender receives notice of any subsequent Encumbrance affecting the Vessel, the Contract, any Acceptable Charter or all or any part of the Insurances, Earnings or Requisition Compensation or any of the Accounts, the Lender may open a new account in its books for the Borrower.  If the Lender does not open a new account, then (unless the Lender gives written notice to the contrary to the Borrower) as from the time of receipt by the Lender of notice of such subsequent Encumbrance, all payments made to the Lender shall be treated as having been credited to a new account of the Borrower and not as having been applied in reduction of the Indebtedness or the Hedging Liabilities.

 

	
  

	
17.16

	
Releases  If  the Lender shall at any time in its discretion release any party from all or any part of any of the Security Documents or from any term, covenant, clause, condition or obligation contained in any of the Security Documents, the liability of any other party to the Security Documents shall not be varied or diminished.

 

	
  

	
17.17

	
Certificates  Any certificate or statement signed by an authorised signatory of the Lender purporting to show the amount of the Indebtedness and the Hedging Liabilities (or any part of the Indebtedness and the Hedging Liabilities) or any other amount referred to in any of the Security Documents shall, save for manifest error or on any question of law, be conclusive evidence as against the Borrower of that amount.

 

	
  

	
17.18

	
Survival of representations and warranties  The representations and warranties on the part of the Borrower contained in Clause 4.2 of this Agreement shall survive the execution of this Agreement and the advance of the Loan.

 

	
  

	
17.19

	
Counterparts  This Agreement may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.

 

	
  

	
17.20

	
Contracts (Rights of Third Parties) Act 1999  Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it other than any permitted assignee or transferee of the Lender.

 

 

  

63

  

 

 

	
18

	
Law and Jurisdiction

 

	
  

	
18.1

	
Governing law  This Agreement shall in all respects be governed by and interpreted in accordance with English law.

 

	
  

	
18.2

	
Jurisdiction  For the exclusive benefit of the Lender, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any Proceedings may be brought in those courts.

 

	
  

	
18.3

	
Alternative jurisdictions  Nothing contained in this Clause shall limit the right of the Lender to commence any Proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any Proceedings against the Borrower in one or more jurisdictions preclude the commencement of any Proceedings in any other jurisdiction, whether concurrently or not.

 

	
  

	
18.4

	
Waiver of objections  The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any Proceedings in any court referred to in this Clause, and any claim that those Proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any Proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction.

 

	
  

	
18.5

	
Service of process  Without prejudice to the right of the Lender to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to the Address for Service, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, on actual receipt.

 

 

 

  

64

  

  

 

IN WITNESS  of which the parties to this Agreement have executed this Agreement the day and year first before written.

 

	
SIGNED  by  BENGT HERMELIN

	
) /s/ Bengt Hermelin

	
duly authorised for and on behalf

	
)

	
of  SAMCO GAMMA LTD.

	
)

	
as Borrower

	
)

	in the presence of:	
  /s/ Zhou Hongkai

	
)

	 	HONGKAI ZHOU	 
	 	One, St. Paul’s Churchyard	 
	 	London EC4M 8SH	 
	 	 

 

 

	
SIGNED  by  STRUAN ROBERTSON

	
)  /s/ Struan Robertson

	
duly authorised for and on behalf

	
)

	
of  CALYON

	
)ATTORNEY-IN-FACT

	
as Lender and Swap Provider

	
)

	in the presence of:	
  /s/ Zhou Hongkai

	
)

	 	HONGKAI ZHOU	 
	 	One, St. Paul’s Churchyard	 
	 	London EC4M 8SH	 
	 	 

 

 

  

65

  

 

APPENDIX A

 

Drawdown Notice

 

To:  CALYON

From:  Samco Gamma Ltd.

200[   ]

Dear Sirs,

 

We refer to the Loan Agreement dated                      2006 made between, amongst others, ourselves and yourselves (“the Agreement”).

 

Words and phrases defined in the Agreement have the same meaning when used in this Drawdown Notice.

 

Pursuant to Clause 2.3 of the Agreement, we irrevocably request that you advance a Drawing of [           ] Dollars ($                   ) to us on                   200[ ], which is a Business Day, by paying the amount of such Drawing to [the Builder] at [              ] [Saudi Maritime Holding Company at Nordea Bank, London Branch, Swift Code NDEAGB2L Account Number 53541152 (using Swift Message M.T. 103)].  [Attached is evidence of the final net amount of the Instalment of the Contract Price payable on the Delivery Date*] [*for delivery Instalment only}

 

We warrant that the representations and warranties contained in Clause 4.2 [and 4.3] of the Agreement are true and correct at the date of this Drawdown Notice and will be true and correct on                             200[ ]; that no Event of Default nor Potential Event of Default has occurred and is continuing, and that no Event of Default or Potential Event of Default will result from the advance of the Drawing requested in this Drawdown Notice.

 

[Subject to Clauses 6.1 and 6.2, we select the period of [       ] months as the first Interest Period in respect of the Drawing above.]

 

Yours faithfully

...........................................................

For and on behalf of

Samco Gamma Ltd.

 

 

  

66

  

 

 

APPENDIX B

 

Instalments

 

	
Instalment due on

	
Instalment Amount

	
Amount of Drawing

	
Finance

	 	 	 	 
	
Within three business days of signing of Contract

	
$14,550,000

	
N/A

	
Paid

	
19 July 2004

	
$7,500,000

	
N/A

	
Paid

	
19 April 2005

	
$7,500,000

	
N/A

	
Paid

	
6 months prior to Expected Delivery Date (as defined in the Contract)

	
$15,000,000

	
$15,000,000

	
Paid

	
3 months prior to Expected Delivery Date (as defined in the Contract)

	
$15,000,000

	
$15,000,000

	
to be paid

	
Delivery Date

	
$19,000,000

	
$19,000,000

	
to be paid

    Subject to adjustment as set forth in Clause 5.2 above

 

 

  

67

  

 

APPENDIX C

 

Irrevocable Confirmation Letter

(on Calyon headed notepaper)

Dear Sir,

In accordance with the Article X 4(a)(ii) of the Shipbuilding Contract (the Contract”) dated 19th January 2004 between Samco Gamma Ltd.(the “Buyer”) and Hyundai Heavy Industries Co., Ltd. and Hyundai Samho Heavy Industries Co., Ltd. (collectively the “Builder”) for the Builder’s Hull No. S273 (the “Vessel”), we hereby confirm that:

	
1)  

	
Arrangements have been made by the Buyer for the financing of the Vessel and moneys will be available to pay the sixth instalment amounting to U.S. Dollars___________ to the Builder on the ACTUAL DELIVERY DATE as defined in and in accordance with the Contract.

	
2) 

	
we will deliver to the Builder an irrevocable payment undertaking letter on the ACTUAL DELIVERY DATE in the form attached undertaking to make the payment of the sixth instalment to The Export-Import Bank of Korea in favour of Hyundai Samho Heavy Industries Co., Ltd. or to the account of Hyundai Samho Heavy Industries Co. with a bank designated and notified by the Builder for value in New York on the Actual Delivery Date. 

Sincerely yours,

 

 

  

68

  

 

 

APPENDIX D

 

Irrevocable Payment Letter

 

(on Calyon headed notepaper) 

 

To:

Hyundai Heavy Industries Co., Ltd. and

Hyundai Samho Heavy Industries Co., Ltd

           

                                 Date:...............

Dear Sirs,

In accordance with the Article X 4(a)(ii) of the Shipbuilding Contract (the Contract”) dated 19th January 2004 between Samco Gamma Ltd.(the “Buyer”) and Hyundai Heavy Industries Co., Ltd. and Hyundai Samho Heavy Industries Co., Ltd. (Collectively the “Builder”) for the M.T. [           ] having Builder’s Hull No. S273 (the “Vessel”) and upon the delivery and acceptance of the Vessel in accordance with Article X2(f) of the Contract, we hereby irrevocably and unconditionally undertake to pay for value today in New York in freely available funds the sixth instalment of the Contract Price in respect of  the Vessel under the Contract amounting to U.S. Dollars _________.

Payment will be made by way of SWIFT transfer to the account of The Export-Import Bank of Korea [details of account] at [                                                  ] of [                                                   ] for the credit of account number [               ] under reference [                         ] in favour of Hyundai Samho Heavy Industries Co., Ltd. or to the account of Hyundai Samho Heavy Industries Co., Ltd. with a bank that has been designated and notified by the Builder.*

Yours faithfully,

............................                                        ................................

Authorised signature                                          Authorised signature

*This designation and notification to be made not less than five (5) Business days prior to the delivery of the Vessel.

 

 

69

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