Document:

Amendment and Restatement Agreement

 

EXHIBIT 4.28

BONA SHIPHOLDING LTD.

TEEKAY SHIPPING CORPORATION

J.P. MORGAN SECURITIES INC.

CITIBANK INTERNATIONAL PLC

AND OTHERS
 
 

AMENDMENT AND RESTATEMENT AGREEMENT

RELATING TO AN

US$500,000,000

REVOLVING LOAN AGREEMENT

ORIGINALLY MADE ON 16 DECEMBER 1998

AND PREVIOUSLY AMENDED AND

RESTATED ON 11 JUNE 1999 AND

SUPPLEMENTED ON 17 DECEMBER 1999

 

TABLE OF CONTENTS

									
		1. DEFINITIONS AND INTERPRETATIONS
		2. REPRESENTATIONS
		3. AMENDMENTS
		4. RELEASE OF GUARANTEE
		5. INCORPORATION OF CLAUSES
		6. FEE
		7. COUNTERPARTS
	SCHEDULE A
	EXHIBIT A
		1.             DEFINITIONS AND INTERPRETATION
		2.             THE FACILITY
		3.             UTILISATION OF THE FACILITY
		4.             PAYMENT AND CALCULATION OF INTEREST
		5.            MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
		6.             REPAYMENT AND REDUCTION
		7.             CANCELLATION
		8.             TAXES
		9. TAX RECEIPTS AND CREDITS
		10.           CHANGES IN CIRCUMSTANCES
		11. GUARANTEE AND INDEMNITY
		12. PRESERVATION OF RIGHTS
		13. REPRESENTATIONS
		14. FINANCIAL INFORMATION
		15. FINANCIAL CONDITION AND SECURITY
		16. COVENANTS
		17. EVENTS OF DEFAULT
		18. DEFAULT INTEREST AND INDEMNITY
		19. CURRENCY OF ACCOUNT AND PAYMENT
		20. PAYMENTS
		21. SET-OFF
		22. SHARING
		23. COMMITMENT COMMISSION AND FEES
		24. COSTS AND EXPENSES
		25. THE AGENT, THE TRUSTEE, THE ARRANGERS AND THE BANKS
		26. ASSIGNMENTS AND TRANSFERS
		27. CALCULATIONS AND EVIDENCE OF DEBT
		28. REMEDIES AND WAIVERS, PARTIAL INVALIDITY
		29. NOTICES
		30. AMENDMENTS
		31. LAW
		32. JURISDICTION
	Annual Report period ended December 31, 2001
	Amendment and Restatement Agreement
	List of Significant Subsidiaries

CONTENTS

	 	 	 	 	 
	Clause	 	Page
	 	 	 	 
	1.     Definitions And Interpretations
	 	1
	2.     Representations
	 	2
	3.     Amendments
	 	2
	4.     Release Of Guarantee
	 	3
	5.     Incorporation Of Clauses
	 	3
	6.     Fee
	 	3
	7.     Counterparts
	 	3
	SCHEDULE A     Conditions Precedent
	 	4
	EXHIBIT A     AMENDED AND RESTATED AGREEMENT
	 	 

 

THIS AMENDMENT AND RESTATEMENT
AGREEMENT is made on 14 September, 2001

BETWEEN

	(1)	 	BONA SHIPHOLDING LTD. (the “Borrower”);
	 
	(2)	 	TEEKAY SHIPPING CORPORATION (the “Guarantor”)
	 
	(3)	 	J.P. MORGAN SECURITIES INC. (replacing Chase Manhattan plc) and CITIBANK
INTERNATIONAL plc (the “Arrangers”);
	 
	(4)	 	CITIBANK INTERNATIONAL plc (the “Trustee”);
	 
	(5)	 	CITIBANK INTERNATIONAL plc (the “Agent”);
	 
	(6)	 	THE BANKS (as defined below).

RECITALS

	 	 	 
	(A)	 	
It is proposed that certain amendments will be made to the Original Loan
Agreement and that Teekay Shipping Corporation, as Guarantor, will become
a party to the Amended and Restated Loan Agreement.
 
	(B)	 	
The parties to the Original Loan Agreement and the Guarantor have agreed
to enter into this Amendment and Restatement Agreement pursuant to which
the Original Loan Agreement will be amended and restated.

NOW IT IS HEREBY AGREED as follows:-

1.            DEFINITIONS
AND INTERPRETATIONS

1.1          Definitions

	 	 	 	In this Agreement and the Recitals the following terms have the meanings
given to them in this Clause 1.1.
	 
	 	 	 	“Amended and Restated Loan Agreement” means the Original Loan Agreement,
as amended by this Agreement.
	 
	 	 	 	“Effective Date” means the first date upon which both (i) the Agent shall
have confirmed to the other parties hereto that it has received all the
documents listed in Schedule A, each in form and substance satisfactory to
it and (ii) no Event of Default or Potential Event of Default shall have
occurred and be continuing.

1

 

	 	 	 	“Guarantee” means the guarantee of the obligations of the Borrower, dated
11 June 1999, given by the Guarantor, in respect of its obligations under
the Amended and Restated Loan Agreement.
	 
	 	 	 	“Original Loan Agreement ” means the Loan Agreement dated 16 December 1998
as previously amended and restated on 11 June 1999 and supplemented on 17 December, 1999 between the Borrower, the Arrangers, the Agent, the Trustee
and the Banks.

1.2          Finance Document

	 	 	 	It is agreed that this Agreement is a Finance Document as defined in the
Amended and Restated Loan Agreement.

1.3          Defined Terms

	 	 	 	Terms defined in the Amended and Restated Loan Agreement bear the same
meaning herein.

2.            REPRESENTATIONS

	 	 	 	The Borrower repeats those representations set forth in Clause 11 of the
Original Loan Agreement as if each reference therein to “this Agreement”
or “the Finance Documents” included a reference to (a) this Agreement and
(b) the Amended and Restated Loan Agreement.

3.            AMENDMENTS

3.1          With effect from the Effective Date:-

	 	 	 
	 	(i)	the Original Loan Agreement shall be amended and restated as
set out in Exhibit A hereto; and
 
	 	(ii)	the definition of “permitted liens” in the Finance Documents
shall be amended and restated as follows:-

	 	 	 	“permitted liens” means, in relation to a Vessel:

	 	 	 
	 	(a)	
liens created by the Finance Documents;
 
	 	(b)	
liens for unpaid master’s and crew’s wages in accordance with
usual maritime practice;
 
	 	(c)	
liens for salvage (including contract salvage);
 
	 	(d)	
general average and other liens covered by insurance;
 
	 	(e)	
liens arising by operation of law for not more than 2 months’
prepaid hire under any charter in relation to a Vessel;
 
	 	(f)	
liens for master’s disbursements incurred in the ordinary
course of trading;

2

 

	 	 	 
	 	(g)	
liens arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of a Vessel;
 
	 	(h)	
any lien created in favour of a plaintiff or defendant in any
action of the court or tribunal before whom such action is brought as
security for costs and expenses where the Owner is prosecuting or
defending such action in good faith by appropriate steps; and
 
	 	(i)	
liens arising by operation of law in respect of taxes which are
not overdue for payment other than taxes being contested in good
faith by appropriate steps and in respect of which appropriate
reserves have been made;

	 	 	 
	3.2	 	
In the event of a conflict between the terms of the Amended and Restated
Loan Agreement and the terms of any of the Security Agreements, the terms
of the Amended and Restated Loan Agreement shall prevail.

4.            RELEASE OF GUARANTEE

	 	 	 	With effect from the Effective Date, the Guarantor shall be released from
all its obligations under the Guarantee without in any way affecting the
obligations the Guarantor shall then have under the Amended and Restated
Loan Agreement.

5.            INCORPORATION OF CLAUSES

	 	 	 	Clause 24 (Costs and Expenses) Clause 28 (Remedies and Waivers, Partial
Invalidity), Clause 29 (Notices), Clause 31 (Law) and Clause 32
(Jurisdiction) of the Amended and Restated Loan Agreement shall apply to
this Agreement mutatis mutandis but as if references therein to the
Amended and Restated Loan Agreement, or to the Finance Documents, were
references to this Agreement.

6.            FEE

	 	 	 	In consideration of the Banks’ agreement to enter into this Agreement, the
Borrower agrees to pay to the Agent on the date hereof for the account of
the Banks, on a pro rata basis, a fee (the “Fee”) of 0.2 per cent. of the
Aggregate Commitments as at the date hereof.

7.            COUNTERPARTS

	 	 	 	This Agreement may be executed in counterparts, each of which when
executed shall be an original, but all counterparts together shall
constitute one and the same instrument.

AS WITNESS the hands of duly authorised representatives of the parties hereto
the day and year first before written.

3

 

SCHEDULE A

Conditions Precedent

	 	 	 
	1.	 	
A certificate of a duly authorised officer of each of the Borrower and
Guarantor setting out the names and signatures of the persons authorised
to sign this Agreement, on behalf of the Borrower and Guarantor
respectively and any documents to be delivered by the Borrower or the
Guarantor pursuant hereto or thereto.
 
	2.	 	
A certified copy of a board resolution of each of the Borrower and the
Guarantor respectively, authorising the execution of this Agreement and a
certified copy of any power of attorney issued pursuant thereto.
 
	3.	 	
A copy, certified a true copy by or on behalf of the Borrower or, as the
case may be, the Guarantor, of each such law, decree, consent, licence,
approval, registration or declaration as is, in the opinion of counsel to
the Banks, necessary to render this Agreement legal, valid, binding and
enforceable in Bermuda and Marshall Islands and to make this Agreement
admissible in evidence in Bermuda and Marshall Islands and to enable the
Borrower and Guarantor to perform their obligations hereunder.
 
	4.	 	
Delivery of legal opinions addressed to the Agent from:

	 	 	 
	 	(a)	
Clifford Chance, English legal advisors to the Agent;
 
	 	(b)	
Appleby, Spurling & Kempe, Bermudan counsel; and
 
	 	(c)	
Watson Farley & Williams, Marshall Islands counsel.

	 	 	 
	5.	 	
Written confirmation from Teekay Shipping (UK) Limited that it accepts
its appointment as agent for service of process of the Borrower and the
Guarantor under the Amended and Restated Loan Agreement.

4

 

The Borrower

BONA SHIPHOLDING LTD.

By:

	 	 	 
	Address:	 	
c/o Teekay Shipping (Canada) Ltd.

1400-505 Burrard Street

Vancouver

British Columbia

Canada
 
	Attn:

Fax:

E-Mail:	 	
Manager, Finance

(1) 604 681 3011

roy.spires@teekay.com

greg.romaniuk@teekay.com
 

The Guarantor

TEEKAY SHIPPING CORPORATION

By:

	 	 	 
	Address:	 	
c/o Teekay Shipping (Canada) Ltd.

1400-505 Burrard Street

Vancouver

British Columbia

Canada
 
	Attn:

Fax:

E-Mail:	 	
Manager, Finance

(1) 604 681 3011

roy.spires@teekay.com

greg.romaniuk@teekay.com
 

Arranger

J.P. MORGAN SECURITIES INC.

By:

	 	 	 
	Address:	 	
270 Park Avenue

New York, NY 10017
 
	Attn:

Fax:

E-Mail:	 	
Craig Fuehrer

(1) 212 270 6040

craig.fuehrer@chase.com
 

5

 

Arranger, Agent and Trustee

CITIBANK INTERNATIONAL plc

By:

	 	 	 
	Address:	 	
Riverdale House

68 Molesworth Street

London SE13 7EU
 
	Attn:

Fax:

E-Mail:	 	
Charles M. Miller

(44) 20 7500 4482

charles.miller@citicorp.com
 

The Banks

CITIBANK, N.A.

By:

	 	 	 
	Address:	 	
New York Shipping & Logistics

388 Greenwich Street — 23rd Floor

New York, NY 10013

USA
 
	Attn:

Fax:

E-Mail:	 	
Mark S. Johnson — Global Shipping

(1) 212 816 5429

mark.s.johnson@citi.com
 

THE CHASE MANHATTAN BANK

By:

	 	 	 
	Address:	 	
270 Park Avenue

New York, NY 10017

USA
 
	Attn:

Fax:

E-Mail:	 	
Richard Smith

(1) 212 270 5100

richard.c.smith@chase.com
 

6

 

THE ROYAL BANK OF SCOTLAND PLC

By:

	 	 	 
	Address:	 	
Shipping Business Centre

P.O. Box 450

5-10 Great Tower Street

London EC3P 3HX
 
	Attn:

Fax:

E-Mail:	 	
Colin Manchester

(44) 207 283 7538

colin.manchester@rbs.co.uk
 

CHRISTIANIA BANK OG KREDITKASSE ASA

By:

	 	 	 
	Address:	 	
11 West 42st — 7th Floor

New York, NY 10036

USA
 
	Attn:	 	
Hans Chr. Kjelsrud/Ronny Bjornadal
 
	Fax:

E-Mail:	 	
(1) 212 827 4888/(1) 212 827 4826

hans.chr.kjelsrud@christianiabank.com

ronny.bjornadal@christianiabank.com
 

DEN NORSKE BANK ASA

By:

	 	 	 
	Address:	 	
Stranden 21

N-0107 Oslo

Norway
 
	Attn:

Fax:

E-Mail:	 	
Harald Serck-Hanssen/Solveig Nuland Knoff, Credit Administration

(47) 22 48 28 94

harald.serck-hanssen@dnb.no

solveig.nuland-knoff@dnb.no
 

7

 

CREDIT AGRICOLE INDOSUEZ

By:

	 	 	 
	Address:	 	
Ruselokkveien 6

P.O. Box 1675 Vika

0120 Oslo,

Norway
 
	Attn:

Fax:

E-Mail:	 	
Bjorn Gulbrandsen/Nils Christian Green/Xavier Robinot

(47) 22 01 06 51

bjorn.gulbrandsen@no.ca-indosuez.com

nilschristian.green@no.ca-indosuez.com

xavier.robinot@no.ca-indosuez.com
 

KBC FINANCE IRELAND

By:

	 	 	 
	Address:	 	
KBC House

International Financial Services Centre

Dublin 1

Ireland
 
	Attn:

Fax:

E-Mail:	 	
Peter H. Stowell/Justin Lande

(353) 1 670 0853

peter.stowell@kbcbank.ie

justin.lande@kbcbank.ie.
 

FORTIS BANK (NEDERLAND) N.V., OLSO BRANCH (formerly MEESPIERSON N.V.)

By:

	 	 	 
	Address:	 	
Munkedamsveien 53b

N-0250, Oslo

Norway
 
	Attn:

Fax:

E-Mail:	 	
Trond Hamre/Tobias Backer/Svein Engh

(47) 23 11 49 40

trond.hamre@fortisbank.no

tobias.backer@fortiscapitalusa.com

svein.engh@fortiscapitalusa.com
 

8

 

SCHIFFSHYPOTHEKENBANK ZU LÜBECK AG

By:

	 	 	 
	Address:	 	
Brandstwiete 1

20457 Hamburg

Germany
 
	Attn:

Fax:

E-Mail:	 	
Jörg Zickermann

(49) 40 3701 4649

joerg.zickermann@db.com
 

FLEET NATIONAL BANK (formerly BANKBOSTON N.A.)

By:

	 	 	 
	Address:	 	
100 Federal Street

Boston MA 02110

USA
 
	Attn:

Fax:

E-Mail:	 	
Credit matters: Sean McCarthy; Operational matters: Derek Taylor

Credit matters: + 1 617 434 1955; Operational matters: + 1 617 434 4366

sean_f_mccarthy@fleet.com
 

LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE

By:

	 	 	 
	Address:	 	
Martensdamm 6

D-24 103 Kiel
 
	Attn:

Fax:

E-Mail:	 	
Meike Mättig/Edward Harris

+ 49 431 900 1130

meike.maettig@lb-kiel.de
 

9

 

MERITA BANK PLC, LONDON BRANCH

By:

	 	 	 
	Address:	 	
19 Thomas More Street

London, E1W 1YF
 
	Attn:

Fax:

E-Mail:	 	
Tom Erik Vagen

+ 44 20 7265 3188

tom.erik.vagen@nordea.com
 

DEUTSCHE BANK AG IN HAMBURG

By:

	 	 	 
	Address:	 	
Adolphsplatz 7

20457 Hamburg

Germany
 
	Attn:

Fax:

E-Mail:	 	
Jörg Zickermann, Ship Financing Dept.

(49) 40 3701 4649

joerg.zickermann@db.com
 

DEUTSCHE SCHIFFSBANK AG

By:

	 	 	 
	Address:	 	
Domshof 17

D-28195 Bremen

Germany
 
	Attn:

Fax:

E-Mail:	 	
Geert Heckmann/Peter Zimmermann

(49) 421 323 539

geert.heckmann@schiffsbank.com

peter.zimmermann@schiffsbank.com
 

10

 

VIKING SHIP FINANCE LTD

By:

	 	 	 
	Address:	 	
Claridenstrasse 40

P.O. Box 4025

CH-8022 Zurich

Switzerland
 
	Attn:

Fax:

E-Mail:	 	
Alexander Schaffert

(41) 1 205 5130

shipfinance@viking.ch
 

11

 

EXHIBIT A

AMENDED AND RESTATED AGREEMENT

BONA SHIPHOLDING LTD.

as Borrower

TEEKAY SHIPPING CORPORATION

as Guarantor

J.P. MORGAN SECURITIES INC.

as Arranger

CITIBANK INTERNATIONAL PLC

as Arranger, Trustee And Agent

AND OTHERS

AMENDED AND RESTATED

US$500,000,000

REVOLVING LOAN AGREEMENT

 

 

CONTENTS

	 	 	 	 	 
	Clause	 	Page
	 	 	 
	1.   Definitions and Interpretation	 	 	
1	 
	2.   The Facility	 	 	
15	 
	3.   Utilisation of the Facility	 	 	
15	 
	4.   Payment and Calculation of Interest	 	 	
17	 
	5.   Market Disruption and Alternative Interest Rates	 	 	
17	 
	6.   Repayment and Reduction	 	 	
18	 
	7.   Cancellation	 	 	
19	 
	8.   Taxes	 	 	
21	 
	9.   Tax Receipts and Credits	 	 	
22	 
	10.  Changes in Circumstances	 	 	
23	 
	11.  Guarantee and Indemnity	 	 	
26	 
	12.  Preservation of Rights	 	 	
26	 
	13.  Representations	 	 	
28	 
	14.  Financial Information	 	 	
31	 
	15.  Financial Condition and Security	 	 	
33	 
	16.  Covenants	 	 	
37	 
	17.  Events of Default	 	 	
39	 
	18.  Default Interest and Indemnity	 	 	
43	 
	19.  Currency of Account and Payment	 	 	
45	 
	20.  Payments	 	 	
45	 
	21.  Set-Off	 	 	
47	 
	22.  Sharing	 	 	
47	 
	23.  Commitment Commission and Fees	 	 	
49	 
	24.  Costs and Expenses	 	 	
50	 
	25.  The Agent, the Trustee, the Arrangers and the Banks	 	 	
51	 
	26.  Assignments and Transfers	 	 	
56	 
	27.  Calculations and Evidence of Debt	 	 	
59	 
	28.  Remedies and Waivers, Partial Invalidity	 	 	
60	 
	29.  Notices	 	 	
60	 
	30.  Amendments	 	 	
61	 
	31.  Law	 	 	
63	 
	32.  Jurisdiction	 	 	
63	 

 

 

THIS AGREEMENT originally made on 16 December 1998 as amended and restated on
11 June 1999 and supplemented on 17 December, 1999 is amended and restated on
14 September, 2001.

BETWEEN

	(1)	 	BONA SHIPHOLDING LTD. (the “Borrower”);
	 
	(2)	 	TEEKAY SHIPPING CORPORATION (the “Guarantor”)
	 
	(3)	 	J.P. MORGAN SECURITIES INC. and CITIBANK INTERNATIONAL plc (the
“Arrangers”);
	 
	(4)	 	CITIBANK INTERNATIONAL plc (the “Trustee”); and
	 
	(5)	 	CITIBANK INTERNATIONAL plc (the “Agent”)
	 
	(6)	 	THE BANKS (as defined below).

NOW IT IS HEREBY AGREED as follows:

Part 1

DEFINITIONS AND INTERPRETATION

1.             DEFINITIONS AND INTERPRETATION

1.1           Definitions

	 	 	 	In this Agreement the following terms have the meanings given to them in
this Clause 1.1.
	 
	 	 	 	“Advance” means, save as otherwise provided herein, an Advance (as from
time to time reduced by repayment or prepayment) made or to be made by the
Banks under the Facility.
	 
	 	 	 	“Affiliate” means a corporation or partnership at least 33% of the equity
or partnership capital of which is beneficially owned, directly or
indirectly, by any member of the Guarantor’s Group and the value of the
interest of such member of the Guarantor’s Group therein (as determined in
accordance with US GAAP) is not less than $10,000,000.
	 
	 	 	 	“Aggregate Commitment” means the aggregate for the time being of the
Banks’ Commitments, as may be reduced or cancelled from time to time as
provided herein.
	 
	 	 	 	“Available Commitment” means, in relation to a Bank at any time and save
as otherwise provided herein, its Commitment at such time less the
aggregate of its portions of Advances which are then outstanding and not
due for repayment Provided that such amount shall not be less than zero.

1

 

	 	 	 	“Available Facility” means, at any time, the aggregate amount of the
Available Commitments at such time.
	 
	 	 	 	“Average Age of the Vessels” at any time means the average age of the
Vessels in the Security Pool at such time, but so that for these purposes,
if an asset in the Security Pool comprises shares in a vessel-owning
company, the vessel owned by that company shall be brought into account as
if it were a Vessel.
	 
	 	 	 	“Bank” means:

	 	 	 	 
	 	(i)	 	
any financial institution named in the First Schedule (The Banks) (other than one which has ceased to be a party hereto in
accordance with the terms hereof); or
	 	 	 	 
	 	(ii)	 	
any financial institution which has become a party hereto in
accordance with the provisions of Clause 26.4 (Assignments by Banks)
or Clause 26.5 (Transfers by Banks).

	 	 	 	“Basle Paper” means the paper entitled “International Convergence of
Capital Measurement and Capital Standards” dated July 1988 and prepared by
the Basle Committee on Banking Regulations and Supervision, as amended in
November 1991 and as may be further amended or replaced.
	 
	 	 	 	“Bermuda” means the Islands of Bermuda.
	 
	 	 	 	“Borrower’s Group” means the Borrower and its subsidiaries for the time
being.
	 
	 	 	 	“Capital Adequacy Requirement” means a request or requirement relating to
the maintenance of capital, including one which makes any change to, or is
based on any alteration in, the interpretation of the Basle Paper or which
increases the amounts of capital required thereunder, other than a request
or requirement made by way of implementation of the Basle Paper in the
manner in which it is being implemented as at the Original Facility Date.
	 
	 	 	 	“Commitment” means, in relation to any Bank at any time and save as
otherwise provided herein, the amount set opposite its name in the third
column of the First Schedule.
	 
	 	 	 	“Commitment Termination Date” means the date which is one month before the
Final Maturity Date.
	 
	 	 	 	“Cover Ratio” at any time means the Estimated Value of the Security Pool
divided by the Loan.

2

 

	 	 	 	“Cover Requirement” means the amount in Dollars which is at any time 133%
of the Aggregate Commitment at such time:
	 
	 	 	 	“Creditor Parties” means the Arrangers, the Trustee, the Agent and the
Banks.
	 
	 	 	 	“Deeds of Assignment” means the deeds of assignment of earnings and
insurances in the form or substantially the form attached hereto as
Exhibit B (with such amendments as
may in the Agent’s reasonable opinion be appropriate to reflect the place
of registration of the relevant Vessel) to be executed by the Borrower in
favour of the Trustee over the Vessels.
	 
	 	 	 	“Estimated Value” means

	 	 	 	 
	 	(i)	 	
in respect of a vessel the average of the most recent estimates
of the Market Value thereof set forth in the summary furnished to the
Agent pursuant to Clause 14.6(a)(i) Provided that if a vessel is the
subject of a charter which had an initial duration of over 24 months
and which was approved by the Agent acting on the instructions of the
Banks, the Estimated Value of such vessel shall be increased (or
reduced) to reflect any difference between (a) the amount determined
by the Agent to be the net present value of the charterhire payable
over the remaining period of such charter and (b) the amount
determined by the Agent to be the net present value of the
charterhire that would be payable under a charter of such vessel for
such period if it were to be chartered in the market at charterhire
rates current as at the preceding Quarter Date; and
	 	 	 	 
	 	(ii)	 	
in respect of any asset in the Security Pool other than a
vessel, the most recent estimate of the value thereof furnished to
the Agent pursuant to Clause 14.6(a)(ii).

	 	 	 	Provided Always That any Vessel older than 27 years 6 months shall be
deemed to have a value of zero.
	 
	 	 	 	“Estimated Value of the Security Pool” at any time mean the aggregate of
the Estimated Values of the relevant Vessels and the Estimated Values of
the other assets in the Security Pool.
	 
	 	 	 	“Event of Default” means any circumstance described as such in Clause 17
(Events of Default).
	 
	 	 	 	“Excluded Entity” means any subsidiary of the Guarantor (i) which is not
controlled, directly or indirectly, by the Guarantor and (ii) in which the
Guarantor’s direct or indirect interest is as holder of equal to or less
than 50% of the issued share capital or as contributor of equal to or less
than 50% of the partnership capital and for these purposes a company or corporation 

3

 

	 	 	 	shall be treated as being controlled by another if that other
company or corporation is able to direct its affairs and/or to control the
composition of its board of directors or equivalent body.
	 
	 	 	 	“Facility” means the revolving dollar loan facility granted to the
Borrower pursuant to Clause 2.1 (Grant of Facility).
	 
	 	 	 	“Facility Office” means, in relation to the Agent or any Bank, the office
identified with its signature below (or, in the case of a Transferee, at
the end of the Transfer Certificate to which it is a party as Transferee)
or such other office as it may from time to time select.
	 
	 	 	 	“Final Maturity Date” means the tenth anniversary of the Original Facility
Date.
	 
	 	 	 	“Financial Indebtedness” means any indebtedness as appears in the balance
sheets contained in the annual or quarterly statements of the Guarantor
provided to the Agent under Clauses 14.1 and 14.2 for or in respect of:

	 	 	 	 
	 	(a)	 	
moneys borrowed;
	 	 	 	 
	 	(b)	 	
any amount raised by acceptance under any acceptance credit
facility;
	 	 	 	 
	 	(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 US 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;
	 	 	 	 
	 	(i)	 	
any amount raised by the issue of redeemable shares;

4

 

	 	 	 	 
	 	(j)	 	
any amount of any liability under an advance or deferred
purchase agreement if one of the primary reasons behind the entry
into this agreement is to raise finance;
	 	 	 	 
	 	(k)	 	
(without double counting) the amount of any liability in
respect of any guarantee or indemnity for any of the items referred
to in paragraphs (a) to (j) above.

	 	 	 	“Finance Documents” means:

	 	 	 	 
	 	(i)	 	
this Agreement;
	 	 	 	 
	 	(ii)	 	
the Security Agreements; and
	 	 	 	 
	 	(iii)	 	
any other document from time to time entered into in relation
to this Agreement which is agreed between the Agent and the Borrower
to constitute a Finance Document for the purposes hereof.

	 	 	 	“Finance Party” means an Obligor or any other party to a Security
Agreement from time to time other than the Agent, the Trustee or any
Bank.
	 
	 	 	 	“Free Cash” means, on any date, the aggregate of:

	 	 	 	 
	 	(i)	 	
cash and cash equivalents; and
	 	 	 	 
	 	(ii)	 	
marketable securities

	 	 	 	to which the Guarantor shall have free, immediate and direct access and as
may be ascertained from the balance sheets contained in the annual or
quarterly statements of the Guarantor provided to the Agent under Clauses
14.1 and 14.2.
	 
	 	 	 	“Guarantor” means Teekay Shipping Corporation, a Marshall Islands
corporation.
	 
	 	 	 	“Guarantor’s Group” means the Guarantor and its subsidiaries for the time
being.
	 
	 	 	 	“Instructing Group” means:

	 	 	 	 
	 	(i)	 	
whilst no Advances are outstanding hereunder, a Bank or group
of Banks whose Commitments amount (or, if each Bank’s Commitment has
been reduced to zero, did immediately before such reduction to zero,
amount) in aggregate to more than 66 2/3 per cent. of the Aggregate
Commitments; and
	 	 	 	 
	 	(ii)	 	
whilst at least one Advance is outstanding hereunder, a Bank or
group of Banks to whom in aggregate more than 66 2/3 per cent. of the

5

 

	 	 
	 	
Loan is (or immediately prior to its prepayment or repayment, was
then) owed.

	 	 	 	“Interest Payment Date” means any date upon which interest is payable
pursuant to Clause 4.1.
	 
	 	 	 	“ISM Code” means the International Management Code for the Safe Operation
of Ships for pollution prevention adopted by the International Maritime
Organisation.
	 
	 	 	 	“Leverage” at any time means Net Financial Indebtedness divided by Total
Capitalisation.
	 
	 	 	 	“Liberia” means the Republic of Liberia.
	 
	 	 	 	“LIBOR” means, in relation to any period for which an interest rate is to
be determined hereunder, the rate determined by the Agent to be the rate
displayed on the Telerate screen (or, if there is no such rate on the
Telerate screen, the rate displayed on the Reuters screen) for the British
Bankers’ Association rate for deposits in dollars for a period
corresponding to such period at or about 11.00 a.m. on the Quotation Date
therefor Provided that if no such rate is so displayed on either the
Telerate screen or the Reuters screen at such time it means the rate per
annum determined by the Agent to be the arithmetic mean (rounded upwards,
if not already such a multiple, to the nearest whole multiple of
one-thirty-second of one per cent.) of the rates (as notified to the
Agent) at which each of the Reference Banks was offering to prime banks in
the London Interbank Market deposits in dollars for a period corresponding
to such period at such time.
	 
	 	 	 	“Loan” means the aggregate principal amount outstanding under the
Facility, from time to time.
	 
	 	 	 	“Margin” means:-

	 	 	 	 	 	 
	 	(a)	 	
up to and including 18 December, 2003:
	 	 	 	 	 	 
	 	 	 	(i)	 	0.80%; or
	 	 	 	 	 	 
	 	 	 	
(ii)	 	
0.75%, during such time as Leverage is equal to
or less than 50% (on the basis of the most recent financial
statements delivered pursuant to Clause 14.1 or Clause 14.2
and
	 	 	 	 	 	 
	 	(b)	 	
thereafter:
	 	 	 	 	 	 
	 	 	 	(i)	 	
0.85%; or
	 	 	 	 	 	 
	 	 	 	(ii)	 	0.80%, during such time as Leverage is equal to
or less than 50% (on the basis of the most recent financial
statements delivered pursuant to Clause 14.1 or Clause 14.2;

6

 

	 	 	 	“Market Value” means, in relation to a vessel at any time, the sale value
thereof in dollars determined on the basis of a sale (for cash and prompt
delivery) by a willing seller to a willing buyer, free of charter and
encumbrances and at arm’s length on normal commercial terms;
	 
	 	 	 	“Marshall Islands” means the Republic of the Marshall Islands;
	 
	 	 	 	“Material Subsidiary” means (i) the Borrower; and (ii) any subsidiary of
the Guarantor whose assets, as determined in accordance with US GAAP and
as shown from whose most recently available financial statements, as
multiplied by the Relevant Percentage in respect of such subsidiary, equal
or exceed 10% of the value of the assets of the Guarantor’s Group as
determined in accordance with US GAAP and as shown from the most recently
available financial statements of the Guarantor’s Group; Provided that:

	 	 	 	 
	 	(i)	 	
in respect of any subsidiary of the Guarantor, only the value
of its assets as multiplied by the Relevant Percentage in respect of
such subsidiary shall be taken into account in the computation of the
value of the assets of the Guarantor’s Group; and
	 	 	 	 
	 	(ii)	 	
a statement by the auditors of the Guarantor to the effect
that, in their opinion, a subsidiary is or is not or was or was not
at any particular time a Material Subsidiary shall, in the absence of
manifest error, be conclusive and binding on the parties hereto;

	 	 	 	“Mortgages” means the first preferred (or first priority) ship mortgages
over the Vessels in the form or substantially the form of that attached
hereto as Exhibits C1, C2 and C3 (with such amendments as may in the
Agent’s reasonable opinion be appropriate to reflect the place of
registration of the relevant Vessel) granted or to be granted by the
relevant Owning Companies in favour of the Trustee.
	 
	 	 	 	“Net Financial Indebtedness” means Financial Indebtedness less Free Cash.
	 
	 	 	 	“NIS” means the Norwegian International Ship Register.
	 
	 	 	 	“Notice of Drawdown” means a notice substantially in the form set out in
the Fourth Schedule (Notice of Drawdown).
	 
	 	 	 	“Obligors” means the Borrower and the Guarantor.
	 
	 	 	 	“Original Consolidated Financial Statements” means the audited
consolidated financial statements of the Borrower’s Group for its
financial year ended 31 December 1997.
	 
	 	 	 	“Original Facility Date” means 16 December 1998.

7

 

	 	 	 	“Owning Companies” means each of those corporations listed in column 1 of
the Second Schedule, as may be supplemented from time to time.
	 
	 	 	 	“Potential Event of Default” means any event which may become (with the
passage of time, the giving of notice, the making of any determination
hereunder or any combination thereof) an Event of Default.
	 
	 	 	 	“Proportion” means, in relation to a Bank:

	 	 	 	 
	 	(i)	 	
whilst no Advances are outstanding hereunder, the proportion
borne by its Commitment to the Aggregate Commitments (or, if the
Aggregate Commitments are then zero, by its Commitment to the
Aggregate Commitments immediately prior to their reduction to zero);
or
	 	 	 	 
	 	(ii)	 	
whilst at least one Advance is outstanding hereunder, the
proportion borne by its share of the Loan to the Loan.

	 	 	 	“Quarter Date” means 31 March, 30 June, 30 September and 31 December in
any year.
	 
	 	 	 	“Quotation Date” means, in relation to any period for which an interest
rate is to be determined hereunder, the day on which quotations would
ordinarily be given by prime banks in the London Interbank Market for
deposits in dollars for delivery on the first day of that period Provided
that, if, for any such period, quotations would ordinarily be given on
more than one date, the Quotation Date for that period shall be the last
of those dates.
	 
	 	 	 	“Reduction Dates” means each of the dates set out in Clause 6.2.
	 
	 	 	 	“Reference Banks” means the principal London offices of Citibank N.A., The
Chase Manhattan Bank and Christiania Bank og Kreditkasse ASA or such other
Bank or Banks as may from time to time be agreed between the Borrower and
the Agent acting on the instructions of an Instructing Group.
	 
	 	 	 	“Relevant Percentage” means, in respect of any subsidiary of the Guarantor
at any time, the percentage of the equity share capital or the partnership
capital, as the case may be, of such subsidiary which is beneficially
owned (free from encumbrances) by the Guarantor at that time.
	 
	 	 	 	“Repayment Date” means, in relation to any Advance, the last day of the
Term thereof.
	 
	 	 	 	“Security Agreements” means each of the following:

	 	 	 	 
	 	(i)	 	
the Mortgages;
	 	 	 	 
	 	(ii)	 	
the Deeds of Assignment; and

8

 

	 	 	 	 
	 	(iii)	 	
any other document from time to time entered into in relation
to this Agreement which it is agreed between the Agent (or, as the
case may be, the Trustee) and the Borrower is to constitute a
Security Agreement for the purposes hereof.

	 	 	 	“Security Pool” means the Vessels listed in the Second Schedule and any
other vessel which is or may in the future be mortgaged to provide
security for the Borrower’s obligations hereunder and each of the other
assets from time to time mortgaged or charged to secure the Borrower’s
obligations under this Agreement and allocated to the Security Pool.
	 
	 	 	 	“Security Trust Deed” means the security trust agreement to be entered
into between the Trustee and others in the form or substantially the form
of that attached hereto as Exhibit A whereby the Trustee will hold the
benefit of the Security Documents on behalf of the Beneficiaries (to be
defined therein).
	 
	 	 	 	“Soponata - Teekay Guarantee” means the guarantee of 50% of the
outstanding amounts from time to time under a $75,000,000 loan agreement
dated 26 June 1996 between Soponata - Bona Limited as borrower,
Christiania Bank og Kreditkasse as agent and others.
	 
	 	 	 	“Term” means, save as otherwise provided herein, in relation to any
Advance, the period for which such Advance is borrowed as specified in the
Notice of Drawdown relating thereto.
	 
	 	 	 	“Total Capitalisation” means at any time the aggregate of:

	 	 	 	 
	 	(i)	 	
Net Financial Indebtedness; and
	 	 	 	 
	 	(ii)	 	
minority interests and total stockholders’ equity, as may be
ascertained by the Agent from the balance sheets contained in the
annual or quarterly statements of the Guarantor provided to the Agent
under Clauses 14.1 and 14.2.

	 	 	 	“Transfer Certificate” means a certificate substantially in the form set
out in the Second Schedule (Form of Transfer Certificate) signed by a Bank
and a Transferee whereby:

	 	 	 	 
	 	(i)	 	
such Bank seeks to procure the transfer to such Transferee of
all or a part of such Bank’s rights, benefits and obligations
hereunder as contemplated in Clause 26.3 (Assignments and Transfers
by Banks); and
	 	 	 	 
	 	(ii)	 	
such Transferee undertakes to perform the obligations it will
assume as a result of delivery of such certificate to the Agent as is
contemplated in Clause 26.5 (Transfers by Banks).

9

 

	 	 	 	“Transfer Date” means, in relation to any Transfer Certificate, the date
for the making of the transfer as specified in the schedule to such
Transfer Certificate.
	 
	 	 	 	“Transferee” means a bank or other financial institution (unless it is
another Bank, approved by the Borrower in writing), to which a Bank seeks
to transfer all or part of such Bank’s rights, benefits and obligations
hereunder.
	 
	 	 	 	“US GAAP” at any time means accounting policies generally accepted in the
United States of America at such time.
	 
	 	 	 	“Vessels” means the Vessels listed in the Second Schedule and any other
vessel which is or may in the future be mortgaged to provide security for
the Borrower’s obligations hereunder and “Vessel” shall be construed
accordingly.

1.2           Interpretation

	 	 	 	Any reference in this Agreement to:
	 
	 	 	 	“acting in concert” shall be construed as a reference to any two or more
persons co-operating pursuant to any agreement or arrangement (whether or
not legally binding or formally recorded) in connection with the
acquisition, or attempted acquisition, by any of them of control over any
company;
	 
	 	 	 	the “Agent”, the “Trustee”, or any “Bank” shall be construed so as to
include its and any subsequent successors, Transferees and permitted
assigns in accordance with their respective interests;
	 
	 	 	 	a “business day” shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks generally are open for business in
London, New York City and Oslo;
	 
	 	 	 	a “charter” shall be construed as a reference to any agreement (other
than, for the purposes of the definition of “Market Value”, a contract of
affreightment) pursuant to which a vessel is, or will be, employed;
	 
	 	 	 	the “date hereof” shall be a reference to the date upon which this
Agreement was amended and restated rather than the Original Facility Date;
	 
	 	 	 	an “encumbrance” shall be construed as a reference to a mortgage, charge,
pledge, lien or other encumbrance securing any obligation of any person,
or any other type of preferential arrangement (including title transfer
and retention arrangements) having a similar effect;
	 
	 	 	 	the “equivalent” in one currency (in this paragraph the “first currency”)
of an amount denominated in another currency (in this paragraph the “second 

10

 

	 	 	 	currency”) on any date shall, save as otherwise provided, be
construed as a reference to the amount of the first currency which could
be purchased with that amount of the second currency at the spot rate of
exchange quoted by the Agent in the foreign exchange market in London at
or about 11.00 a.m. on such date for the purchase of the first currency
with the second currency for the second business day thereafter;
	 
	 	 	 	a “guarantee” includes any guarantee, indemnity or other obligation to
pay, purchase, provide funds for the payment of or indemnify against the
consequences of default in the
payment of indebtedness of any other person and any encumbrance which
secures the payment of any indebtedness of any other person;
	 
	 	 	 	a “holding company” of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned
company or corporation is a subsidiary;
	 
	 	 	 	“indebtedness” shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
	 
	 	 	 	“indebtedness for
borrowed money” shall be construed as a reference to any
indebtedness of any person for or in respect of:

	 	 	 	 
	 	(i)	 	
moneys borrowed or raised;
	 	 	 	 
	 	(ii)	 	
amounts raised under any acceptance credit facility;
	 	 	 	 
	 	(iii)	 	
amounts raised pursuant to any note purchase facility or the
issue of bonds, notes, debentures, loan stock or similar instruments;
	 	 	 	 
	 	(iv)	 	
amounts raised pursuant to any issue of shares of any member of
the Borrower’s Group which are expressed to be redeemable;
	 	 	 	 
	 	(v)	 	
the amount of any liability in respect of leases or hire
purchase contracts which would, in accordance with US GAAP be treated
as finance or capital leases;
	 	 	 	 
	 	(vi)	 	
the amount of any liability in respect of any purchase price
for assets or services the payment of which is deferred for a period
in excess of one hundred and eighty (180) days;
	 	 	 	 
	 	(vii)	 	
all reimbursement obligations whether contingent or not in
respect of amounts paid under a letter of credit or similar
instrument;
	 	 	 	 
	 	(viii)	 	
all interest rate and currency swap and similar agreements obliging
the making of payments, whether periodically or upon the happening of
a contingency (and the value of such indebtedness shall be the
mark-to-market valuation of such transaction at the relevant time);

11

 

	 	 	 	 
	 	(ix)	 	
amounts raised under any other transaction (including, without
limitation, any forward sale or purchase agreement) having the
commercial effect of a borrowing; and
	 	 	 	 
	 	(x)	 	
any guarantee of indebtedness falling within paragraphs (i) to
(ix) above;

	 	 	 	a “month” is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
succeeding calendar month save that, where any such period would otherwise
end on a day which is not a business day, it shall end on the next
succeeding business day, unless that day falls in the calendar month
succeeding that in which it would otherwise have ended, in which case it
shall end on the immediately preceding business day Provided that, if a
period starts on the last business
day in a calendar month or if there is no numerically corresponding day in
the month in which that period ends, that period shall end on the last
business day in that later month (and references to “months” shall be
construed accordingly);
	 
	 	 	 	a “person” shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) of two or
more of the foregoing;
	 
	 	 	 	a “subsidiary” of a company or corporation shall be construed as a
reference to any company or corporation:

	 	 	 	 
	 	(i)	 	
which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
	 	 	 	 
	 	(ii)	 	
more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the first-mentioned
company or corporation; or
	 	 	 	 
	 	(iii)	 	
which is a subsidiary of another subsidiary of the
first-mentioned company or corporation

	 	 	 	and, for these purposes, a company or corporation shall be treated as
being controlled by another if that other company or corporation is able
to direct its affairs and/or to control the composition of its board of
directors or equivalent body Provided that neither Bona Fortuna KS nor
Bona Freighter KS shall constitute subsidiaries of any member of the
Group;
	 
	 	 	 	“tax” shall be construed so as to include any present or future tax, levy,
impost, duty or other charge 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);

12

 

	 	 	 	a “total loss” of a Vessel shall be construed so as to include (a) an
actual, constructive, agreed, arranged or compromised total loss of such
Vessel including such as may occur during a requisition for hire of such
Vessel and (b) the requisition for title of a Vessel (otherwise than by
requisition for hire) by any government or other competent authority or by
any person acting or purporting to act by the authority of the same and
from which such Vessel has not been released within a period of ninety
days of such event occurring;
	 
	 	 	 	“VAT” shall be construed as a reference to value added tax including any
similar tax which may be imposed in place thereof from time to time;
	 
	 	 	 	“vessel” means any Vessel and any other vessel owned by the Borrower or
Guarantor or any of its subsidiaries; and
	 
	 	 	 	the “winding-up”, “dissolution” or “administration” of a company or
corporation shall be construed so as to include any equivalent or
analogous proceedings under the law of the jurisdiction in which such
company or corporation is incorporated or any jurisdiction in which such
company or corporation carries on business including the seeking of
liquidation, winding-up, reorganisation, dissolution, administration,
arrangement, adjustment, protection or relief of debtors.

1.3           Currency Symbols

	 	 	 	“$” and “dollars” denote lawful currency of the United States of America.

1.4          Amendments

	 	 	 	Save where the contrary is indicated, any reference in this Agreement to:

	 	 	 	 
	 	(i)	 	
this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may be,
such other agreement or document as the same may have been, or may
from time to time be, amended, varied or supplemented;
	 	 	 	 
	 	(ii)	 	
a statute shall be construed as a reference to such statute as
the same may have been, or may from time to time be, amended or
re-enacted; and
	 	 	 	 
	 	(iii)	 	
a time of day shall be construed as a reference or re-enacted to London time.

1.5           Headings

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

1.6           Total Loss of Vessel

	 	 	 	For the purposes of the Finance Documents, a total loss of a Vessel shall
be deemed to have occurred:

13

 

	 	 	 	 
	 	(i)	 	
if it consists of an actual total loss, at noon Greenwich Mean
Time on the actual date of loss or, if that is not known, on the date
on which such Vessel was last heard of;
	 	 	 	 
	 	(ii)	 	
if it consists of a requisitioning for title, at noon Greenwich
Mean Time on the date on which the same is expressed to take effect
by the person making the same; and
	 	 	 	 
	 	(iii)	 	
if it consists of a constructive or compromised or arranged or
agreed total loss, at noon Greenwich Mean Time on the date at which
notice of abandonment of such Vessel is given to her insurers for the
time being or (if her insurers for the time being do not admit the
claim for total loss) at the time on which a total loss is
subsequently adjudged to have occurred by a competent court or
arbitration tribunal or liability in respect thereof as a total loss
is admitted by insurers.

1.7           Construction

	 	 	 	In the event of a conflict between any words and expressions defined
herein and any words and expressions used in any of the Security
Agreements, unless otherwise defined therein, the words and expressions
defined herein will prevail for the purpose of the Finance Documents.

1.8           Third Party Rights

	 	 	 	A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the
benefit of any term of this Agreement.

14

 

Part 2

THE FACILITY

2.             THE FACILITY

2.1            Grant of the Facility

	 	 	 	The Banks grant to the Borrower, upon the terms and subject to the
conditions hereof the Facility being a dollar revolving loan facility in
an aggregate amount of $500,000,000.

2.2           Purpose and Application

	 	 	 	The Facility is intended to provide working capital to the Borrower for
application in accordance with the general corporate purposes of the
Guarantor’s Group.

2.3           Banks’ Obligations Several

	 	 	 	The obligations of each Bank hereunder are several and the failure by a
Bank to perform its obligations hereunder shall not affect the obligations
of the Borrower towards any other party hereto nor shall any other party
be liable for the failure by such Bank to perform its obligations
hereunder.

3.             UTILISATION OF THE FACILITY

3.1           Drawdown Conditions

	 	 	 	An Advance will be made by the Banks to the Borrower if:

	 	 	 	 
	 	(i)	 	
not more than ten nor less than three business days before the
proposed date for the making of such Advance, the Agent has received
from the Borrower a Notice of Drawdown therefor, receipt of which
shall oblige the Borrower to borrow the amount therein requested on
the date therein stated upon the terms and subject to the conditions
contained herein;
	 	 	 	 
	 	(ii)	 	
the proposed date for the making of such Advance is a business
day falling before the Commitment Termination Date;
	 	 	 	 
	 	(iii)	 	
the proposed date for the making of such Advance is not less
than five business days after the date upon which the previous
Advance (if any) was made hereunder;
	 	 	 	 
	 	(iv)	 	
the proposed amount of such Advance is in a minimum amount of
$5,000,000 and subject thereto an integral multiple of $1,000,000
which is equal to or less than the amount of the Available Facility;
	 	 	 	 
	 	(v)	 	
there would not, immediately after the making of such Advance,
be more than six (6) Advances outstanding;

15

 

	 	 	 	 
	 	(vi)	 	
the proposed Term of such Advance is a period of one, two,
three, six or twelve months (or such other periods as may be agreed
between the Borrower and the Banks) ending on or before the Final
Maturity Date; and
	 	 	 	 
	 	(vii)	 	
no Event of Default or Potential Event of Default has occurred
and the representations set out in Clause 13 (Representations) are
true in all material respects on and as of the proposed date for the
making of such Advance.

3.2          Each Bank’s Participation

	 	 	 	Each Bank will participate through its Facility Office in each Advance
made pursuant to Clause 3.1 (Drawdown Conditions) in the proportion borne
by its Available Commitment to the Available Facility in either case
immediately prior to the making of that Advance.

3.3          Reduction of Available Commitment

	 	 	 	If a Bank’s Commitment is reduced in accordance with the terms hereof
after the Agent has received the Notice of Drawdown for an Advance, then
the amount of that Advance shall be reduced accordingly.

16

 

Part 3

INTEREST

4.             PAYMENT AND CALCULATION OF INTEREST

4.1           Payment of Interest

	 	 	 	On the Repayment Date relating to each Advance (and, in the case where a
Term has a duration exceeding six months, on the last day of the sixth of
those months) the Borrower shall pay accrued interest on that Advance.

4.2           Calculation of Interest

	 	 	 	The rate of interest applicable to an Advance from time to time during its
Term shall be the rate per annum which is the sum of the applicable Margin
at such time and LIBOR on the Quotation Date therefor.

	 	 	 	 
	4.3	 	 	
For the purposes of determining the amount of accrued interest payable on
each Advance on an Interest Payment Date pursuant to Clause 4.1, the
Leverage (and accordingly the applicable Margin) shall be assumed to be as
disclosed in the most recent financial statements delivered pursuant to
Clause 14.1 or Clause 14.2 Provided Always That if, on the basis of the
financial statements delivered in respect of the next following Quarter
Date (having regard to the proviso to the definition of “Margin”) the
Borrower has overpaid (or, as the case may be, underpaid) interest then
the amount so overpaid (or, as the case may be, underpaid) shall be
deducted from (or, as the case may be, added to) the amount of interest
which would otherwise have been payable by the Borrower on the next
following Interest Payment Date.

5.            MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES

	 	 	 	If, in relation to any Advance for which LIBOR falls to be determined in
accordance with the proviso to the definition thereof, the Agent
determines that at or about 11.00 a.m. (London time) on the Quotation Date
for the Term in respect of such Advance none of the Reference Banks was
offering to prime banks in the London Interbank Market deposits in dollars
for the proposed duration of such Term then, notwithstanding the
provisions of Clause 4 (Payment and Calculation of Interest) the length of
the Term of such Advance shall be one month (unless otherwise agreed) and
the rate of interest applicable to such Advance from time to time during
such Term shall be the rate per annum which is the sum of the applicable
Margin and the arithmetic mean of the respective rates per annum notified
to the Agent by each Bank before the last day of the Term to be that which
expresses as a percentage rate per annum the cost to it of funding such
Advance during such Term from whatever sources such Bank may select (and
the Agent shall notify the Borrower accordingly).

17

 

Part 4

REPAYMENT, REDUCTION, CANCELLATION AND PREPAYMENT

6.             REPAYMENT AND REDUCTION

6.1           Repayment

	 	 	 	The Borrower shall repay each Advance made to it in full on the Repayment
Date relating thereto.

6.2           Reduction

	 	 	 	Subject always to Clause 7.4, on each of the following Reduction Dates the
Aggregate Commitment shall be permanently reduced to the amounts shown
opposite such dates below:-

	 	 	 	 	 
	18th December, 2001
	 	 	378,225,560.66	 
	18th June, 2002
	 	 	359,438,340.99	 
	18th December, 2002
	 	 	340,651,121.32	 
	18th June, 2003
	 	 	321,863,901.65	 
	18th December, 2003
	 	 	303,076,681.98	 
	18th June, 2004
	 	 	284,289,462.31	 
	18th December, 2004
	 	 	265,502,242.64	 
	18th June, 2005
	 	 	246,715,022.97	 
	18th December, 2005
	 	 	227,927,803.30	 
	18th June, 2006
	 	 	209,140,583.63	 
	18th December, 2006
	 	 	190,353,363.96	 
	18th June, 2007
	 	 	171,566,144.29	 
	18th December, 2007
	 	 	152,778,924.62	 
	18th June, 2008
	 	 	133,991,704.95	 
	18th December, 2008
	 	 	0.00	 

6.3           Rateable Reduction

	 	 	 	Each reduction pursuant to Clause 6.2 of Aggregate Commitment shall reduce
the Banks’ Commitments pro rata. In any event the amount of the Facility
shall be reduced to zero on the Final Maturity Date.

6.4           Reduction of Outstandings

	 	 	 	If on any date the Loan exceeds the Aggregate Commitment on such date, the
Borrower shall repay on such date the amount of the excess and the
repayment of such excess shall reduce the principal amount of such Advance
or Advances as is or are nominated by the Borrower.

18

 

6.5           Prepayment

	 	 	 	The Borrower may, by giving to the Agent not less than five business days’
notice to that effect, prepay (without penalty but subject to the Borrower
complying with Clause 18.4) the whole or any part of an Advance (being an
amount such that such Advance will be reduced by an amount or integral
multiple of $5,000,000).

6.6           Reborrowing of Prepayments

	 	 	 	Subject to the other provisions of this Agreement, any prepayment made by
the Borrower pursuant to Clause 6.5 shall increase the amount of the
Available Facility and may be reborrowed in accordance with the provisions
of this Agreement.

6.7           No Other Repayments

	 	 	 	The Borrower shall not repay or prepay all or any part of any Advance
outstanding hereunder except at the times and in the manner expressly
provided herein and, subject to the terms and conditions hereof, shall be
entitled to reborrow any amount repaid up to the Available Facility at
such time.

7.             CANCELLATION

7.1           Cancellation

	 	 	 	 
	 	(i)	 	
the Borrower may, by giving to the Agent not less than five
business days’ prior notice to that effect, cancel the whole or any
part (being an amount or integral multiple of $5,000,000) of the
Aggregate Commitment; any such cancellation shall be applied (a) pro
rata against the scheduled reductions in the Aggregate Commitment as
at each Reduction Date as determined pursuant to Clause 6.2 unless
(b), at the time the relevant notice of cancellation is given, the
Guarantor is in breach of any provision of Clause 15.1, in which case
the cancelled amount shall be applied against the Aggregate
Commitment, as at each Reduction Date as determined pursuant to
Clause 6.2 in inverse chronological order.
	 	 	 	 
	 	(ii)	 	
any such cancellation shall reduce the Commitment, of each Bank
rateably. No premium or other compensation shall be payable by the
Borrower by reason of such cancellation.

7.2           Notice of Cancellation

	 	 	 	Any notice of cancellation given by the Borrower pursuant to Clause 7.1
(Cancellation) shall be irrevocable and shall specify the date upon which
such cancellation is to be made and the amount of such cancellation.

19

 

7.3           Repayment of a Bank’s Share of the Loan

	 	 	 	If the Borrower is required to increase any payment made to any Bank under
any of the Finance Documents under Clause 8.1 (Tax Gross-up) or if any
Bank claims indemnification from the Borrower under Clause 8.2 (Tax
Indemnity) or Clause 10.1 (Increased Costs), the Borrower may, within
thirty days thereafter and by not less than ten business days’ prior
notice to the Agent (which notice shall be irrevocable), cancel
such Bank’s Commitment whereupon such Bank shall cease to be obliged to
participate in further Advances and its Commitment shall be reduced to
zero.

7.4           Satisfaction of Clause 6.2

	 	 	 	Subject always to Clause 6.4, the reductions in Aggregate Commitment,
pursuant to Clause 6.2 (Reduction) shall be deemed to have been satisfied
to the extent a cancellation has been effected pursuant to Clause 7.1 (Cancellation) and such cancellation has been applied in accordance with
Clause 7.1(i)(a) or Clause 7.1(iii) as the case may be.

20

 

Part 5

RISK ALLOCATION

8.             TAXES

8.1           Tax Gross-up

	 	 	 	All payments to be made by the Borrower to any person under any of the
Finance Documents shall be made free and clear of and without deduction
for or on account of tax unless the Borrower is required to make such a
payment subject to the deduction or withholding of tax, in which case the
sum payable by the Borrower in respect of which such deduction or
withholding is required to be made shall be increased to the extent
necessary to ensure that, after the making of the required deduction or
withholding, such person receives and retains (free from any liability in
respect of any such deduction or withholding) a net sum equal to the sum
which it would have received and so retained had no such deduction or
withholding been made or required to be made.

8.2           Tax Indemnity

	 	 	 	Without prejudice to the provisions of Clause 8.1 (Tax Gross-up), if any
person or the Agent on its behalf is required to make any payment on
account of tax (not being a tax imposed on and calculated by reference to
the net income paid to and received by its Facility Office by the
jurisdiction in which it is incorporated or in which its Facility Office
is located) or otherwise on or in relation to any sum received or
receivable hereunder by such person or the Agent on its behalf (including
any sum received or receivable under this Clause 8) or any liability in
respect of any such payment is asserted, imposed, levied or assessed
against such person or the Agent on its behalf, the Borrower shall, upon
demand of the Agent, promptly indemnify such person against such payment
or liability, together with any interest, penalties, costs and expenses
payable or incurred in connection therewith Provided that if a Bank or
the Agent or the Trustee considers that it is reasonable to do so and that
it would not be otherwise prejudiced thereby, it will, prior to
instructing the Agent to make a demand under this Clause 8.2, use
reasonable endeavours to determine whether any such payment or liability
was correctly or legally imposed or asserted or could reasonably be
mitigated.

8.3           Claims by Banks

	 	 	 	If a Bank or the Trustee intends to make a claim pursuant to Clause 8.2
(Tax Indemnity) it shall notify the Agent of the event by reason of which
it is entitled to do so and provide the Agent with a reasonable written
explanation of the basis and calculation of such claim, whereupon the
Agent shall notify the Borrower thereof and provide the Borrower with a
copy of the 

21

 

	 	 	 	explanation and calculation which it has received from such
Bank or the Trustee Provided that nothing herein shall require any Bank or
the Trustee to disclose any confidential information relating to the
organisation of its affairs.

9.             TAX RECEIPTS AND CREDITS

9.1           Notification of Requirement to Deduct Tax

	 	 	 	If, at any time, the Borrower is required by law to make any deduction or
withholding from any sum payable by it under any of the Finance Documents
(or if thereafter there is any change in the rates at which or the manner
in which such deductions or withholdings are calculated), the Borrower
shall promptly notify the Agent, whereupon the Agent shall notify the
Banks and the Trustee accordingly.

9.2           Evidence of Payment of Tax

	 	 	 	If the Borrower makes any payment under any of the Finance Documents in
respect of which it is required to make any deduction or withholding, it
shall pay the full amount required to be deducted or withheld to the
relevant taxation or other authority within the time allowed for such
payment under applicable law and shall deliver to the Agent for each Bank,
within thirty days after it has received the same an original receipt (or
a certified copy thereof) issued by such authority evidencing the payment
to such authority of all amounts so required to be deducted or withheld in
respect of that Bank’s share of such payment.

9.3           Tax Credits

	 	 	 	In the event that an additional payment is made under Clause 8.1 (Tax
Gross-up) or Clause 8.2 (Tax Indemnity) and the person for whose benefit
such payment is made, in its sole opinion, determines that it has received
or been granted a credit against relief or remission for, or repayment of,
any relevant tax paid or payable by it in respect of or calculated with
reference to the deduction or withholding giving rise to the relevant
payment or liability, such person shall, to the extent that it can do so
without prejudice to the retention of the amount of such credit, relief,
remission or repayment, pay to the Borrower such amount as such person
shall, in its sole opinion, have concluded to be attributable to the
relevant payment or liability. Any such payment shall be conclusive
evidence of the amount due to the Borrower hereunder and shall be accepted
by the Borrower in full and final settlement of its rights of
reimbursement hereunder in respect of the relevant payment or liability.
Nothing herein contained shall interfere with the right of the Agent or
any Bank to arrange its tax affairs in whatever manner it thinks fit and,
in particular, neither the Agent nor any Bank shall be under any
obligation to claim credit, relief, remission or repayment from or against
its corporate profits or similar tax liability in respect of the amount of
the relevant payment or liability in priority to any other claims,
reliefs, credits or deductions available to it. Any such reimbursement to
be made by a Bank pursuant to this Clause 9.3 (Tax Credits) shall be made
as soon as possible after such credit or remission or repayment has, in
the reasonable opinion of such Bank, been received or granted.

22

 

10.         CHANGES IN CIRCUMSTANCES

10.1         Increased Costs

	 	 	 	If, by reason of (i) any change in law or in its interpretation or
administration coming into effect after the Original Facility Date and/or
(ii) compliance with any Capital Adequacy Requirement or any other request
from or requirement of any central bank or other fiscal, monetary or other
authority coming into effect after the Original Facility Date compliance
with which is obligatory or customary for such Bank:

	 	 	 	 
	 	(i)	 	
a Bank or any holding company of such Bank is unable to obtain
the rate of return on its overall capital which it would have been
able to obtain but for such Bank’s entering into or assuming or
maintaining a commitment or performing its obligations (including its
obligation to participate in the making of Advances) under this
Agreement;
	 	 	 	 
	 	(ii)	 	
a Bank or any holding company of such Bank incurs a cost as a
result of such Bank’s entering into or assuming or maintaining a
commitment or performing its obligations (including its obligation to
participate in the making of Advances) under this Agreement;
	 	 	 	 
	 	(iii)	 	
there is any increase in the cost to a Bank or any holding
company of such Bank of funding or maintaining all or any of the
loans comprised in a class of loans formed by or including such
Bank’s share of the Advances; or
	 	 	 	 
	 	(iv)	 	
a Bank or any holding company of such Bank becomes liable to
make any payment on account of tax or otherwise (not being a tax
imposed on and calculated by reference to the net income paid to and
received by such Bank’s Facility Office by the jurisdiction in which
it is incorporated or in which its Facility Office is located) on or
calculated by reference to the amount of such Bank’s share of the
Advances and/or to any sum received or receivable by it hereunder,

	 	 	 	then the Borrower shall, from time to time on demand of the Agent,
promptly pay to the Agent for the account of that Bank amounts sufficient
to hold harmless and indemnify that Bank or such Bank’s holding company
from and against, as the case may be, (1) such reduction in the rate of
return on its overall capital, (2) such cost, (3) such increased cost (or
such proportion of such increased cost as is, in the opinion of that Bank,
attributable to its participating in the funding or maintaining of
Advances) or (4) such liability. No claim shall be made by any Bank under
this Clause 10.1 (Increased Costs) in respect of any increased cost which
arises out of a change to applicable law or regulation affecting that Bank
which has been issued prior to the date of the first drawdown hereunder
and compliance with which by that Bank is commercially reasonable
(including, without limitation, any reduction in return or increased cost
which arises as a consequence of any law or directive

23

 

	 	 	 	implementing the Basle Paper in the manner in which it is being implemented
at the Original Facility Date).

10.2         Increased Costs Claims

	 	 	 	A Bank intending to make a claim pursuant to Clause 10.1 (Increased Costs)
shall as soon as reasonably practicable after becoming aware of the
circumstance which would give rise to such a claim notify the Agent of the
event by reason of which it is entitled to do so and provide the Agent
with a reasonable written explanation of the basis and calculation of such
claim, whereupon the Agent shall promptly notify the Borrower thereof and
provide the Borrower with a copy of the explanation and calculation which
it has received from such Bank or Trustee Provided that nothing herein
shall require such Bank to disclose any confidential information relating
to the organisation of its affairs.

10.3         Illegality

	 	 	 	If, at any time:

	 	 	 	 	 	 
	 	(i)	 	
it is unlawful for a Bank to make, fund or allow to remain
outstanding all or part of its share of the Advances, then that Bank
shall, promptly after becoming aware of the same, deliver to the
Borrower through the Agent a notice to that effect and:
	 	 	 	 	 	 
	 	 	 	(a)	 	such Bank shall not thereafter be obliged to
participate in the making of any Advances and the amount of
its Commitment shall be immediately reduced to zero; and
	 	 	 	 	 	 
	 	 	 	(b)	 	if the Agent on behalf of such Bank so
requires, the Borrower shall on such date as the Agent shall
have specified repay such Bank’s share of any outstanding
Advances together with accrued interest thereon and all other
amounts owing to such Bank hereunder; or
	 	 	 	 	 	 
	 	(ii)	 	
it is or will become unlawful for the Borrower to perform or
comply with any or all of its obligations under any Finance Document
or any of the obligations of the Borrower under any Finance Document
are not or will cease to be legal valid and binding, the Agent may by
notice to the Borrower require the Borrower to enter into
negotiations with a view to amending the terms of such Finance
Document in such a way as to ensure that the Borrower’s obligations
thereunder remain substantially the same but are lawful or, as the
case may be, legal, valid and binding; if within thirty days
following any such notice from the Agent such Finance Document shall
not have been so amended, the Borrower shall, on such date as the
Agent may require, repay the Loan together with accrued interest
thereon and any other sums then due from the Borrower hereunder.

24

 

10.4         Mitigation

	 	 	 	If circumstances arise which would (or would upon the giving of notice)
result in:
	 
	 	 	 	the reduction of a Bank’s
Commitment pursuant to Clause 10.3 (Illegality);

	 	 	 	 
	 	(i)	 	
the prepayment of a Bank’s share of an Advance pursuant to
Clause 10.3 (Illegality);
	 	 	 	 
	 	(ii)	 	
an increase in the amount of any payment to be made to or for
account of any Bank pursuant to Clause 8.1 (Tax Gross-up); or
	 	 	 	 
	 	(iii)	 	
a claim by any Bank for indemnification pursuant to Clause 8.2
(Tax Indemnity) or a claim by any Bank for indemnification pursuant
to Clause 10.1 (Increased Costs),

	 	 	 	then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under any of the Clauses referred to above,
that Bank shall, in consultation with the Borrower and the Agent on behalf
of the Banks, take such reasonable steps as may be reasonably open to it
to mitigate the effects of such circumstances, including by transferring
its Facility Office to another jurisdiction or by assigning its rights
hereunder to another financial institution approved by the Borrower;
Provided that no Bank shall have any obligation to transfer its Facility
Office or assign its rights hereunder as aforesaid if it is of the opinion
that to do so would or might have an adverse effect on its business,
operations or financial condition.

25

 

Part 6

GUARANTEE

11.         GUARANTEE AND INDEMNITY

	 	 
	 	
The Guarantor irrevocably and unconditionally:

	 	 	 	 
	 	(i)	 	
guarantees to each Creditor Party the due and punctual
observance and performance by the Borrower of its obligations under
each of the Finance Documents to which it is a party and promises to
pay from time to time on demand all sums from time to time due and
payable (but unpaid) by the Borrower under or pursuant thereto or on
account of any breach thereof; and
	 	 	 	 
	 	(ii)	 	
agrees as a primary obligation to indemnify each Creditor Party
from time to time on demand from and against any loss incurred by
that Creditor Party as a result of any of the obligations of the
Borrower under any of the Finance Documents to which it is a party
being or becoming void, voidable, unenforceable or ineffective for
any reason whatsoever, whether or not known to such Creditor Party,
the amount of such loss being the amount which such Creditor Party
would otherwise have been entitled to recover from the Borrower.

12.         PRESERVATION OF RIGHTS

	 	 	 
	12.1	 	
The obligations of the Guarantor herein contained shall be in addition to
and independent of every other security which any Creditor Party may at
any time hold in respect of any of the Borrower’s obligations under the
Finance Documents.

	 	 	 
	12.2	 	
Neither the obligations of the Guarantor herein contained nor the rights,
powers and remedies conferred in respect of the Guarantor upon the
Creditor Parties by the Finance Documents or by law shall be discharged,
impaired or otherwise affected by:

	 	 	 	 
	 	(a)	 	
the winding-up, dissolution, administration or reorganisation
of the Borrower or any change in its status, function, control or
ownership;

	 	 	 	 
	 	(b)	 	
any of the obligations of the Borrower under the Finance
Documents to which it is a party or under any other security relating
thereto being or becoming illegal, invalid, unenforceable or
ineffective in any respect;

	 	 	 	 
	 	(c)	 	
time or other indulgence being granted or agreed to be granted
to the Borrower in respect of its obligations under the Finance
Documents to which it is a party or under any such other security;

26

 

	 	 	 	 
	 	(d)	 	
any amendment to, or any variation, waiver or release of any
obligation of the Borrower under the Finance Documents to which it is
a party or under any such other security;

	 	 	 	 
	 	(e)	 	
any failure to take, or fully to take, any security
contemplated by any Finance Document or otherwise agreed to be taken
in respect of the Borrower’s obligations under the Finance Documents
to which it is a party;

	 	 	 	 
	 	(f)	 	
any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any such security or
taken in respect of the Borrower’s obligations under the Finance
Documents to which it is a party; or

	 	 	 	 
	 	(g)	 	
any other act, event or omission which, but for this Clause
12.2(g), might operate to discharge, impair or otherwise affect any
of the obligations of the Guarantor herein contained or any of the
rights, powers or remedies conferred upon the Creditor Parties by the
Finance Documents or by law.

	 	 	 
	12.3	 	
Any settlement or discharge given by a Creditor Party to the Guarantor in
respect of the Guarantor’s obligations hereunder or any other agreement
reached between a Creditor Party and the Guarantor in relation thereto
shall be, and be deemed always to have been, void if any act on the faith
of which the Creditor Party gave the Guarantor that settlement or
discharge or entered into that agreement is subsequently avoided by or in
pursuance of any provision of law.

	 	 	 
	12.4	 	
A Creditor Party shall not be obliged before exercising any of the
rights, powers or remedies conferred upon it in respect of the Guarantor
hereby or by law:

	 	 	 	 
	 	(a)	 	
to make any demand of the Borrower;

	 	 	 	 
	 	(b)	 	
to take any action or obtain judgment in any court against the
Borrower;

	 	 	 	 
	 	(c)	 	
to make or file any claim or proof in a winding-up or
dissolution of the Borrower; or

	 	 	 	 
	 	(d)	 	
to enforce or seek to enforce any security taken in respect of
any of the obligations of the Borrower under the Finance Documents to
which it is a party.

27

 

	 	 	 
	12.5	 	
The Guarantor agrees that, so long as any amounts are or may be owed by
the Borrower under any Finance Document or the Borrower is under any
actual or contingent obligations under any Finance Document, the Guarantor
shall not exercise any rights which the Guarantor may at any time have by
reason of performance by it of its obligations hereunder:

	 	 	 	 
	 	(a)	 	
to be indemnified by the Borrower;

	 	 	 	 
	 	(b)	 	
to claim any contribution from any other guarantor of the
Borrower’s obligations under the Finance Documents to which it is a
party; and/or

	 	 	 	 
	 	(c)	 	
to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Creditor Parties under
the Finance Documents or of any other security taken pursuant to, or
in connection with, the Finance Documents by the Creditor Parties or
any of them.

Part 7

REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT

13.         REPRESENTATIONS

	 	 	 
	13.1	 	
Each Obligor represents that:

	 	 	 	 
	 	(i)	 	
Status and Due Authorisation   It is a corporation duly
organised under the laws of its jurisdiction of incorporation or
continuation as the case may be with power to enter into the Finance
Documents and to exercise its rights and perform its obligations
under the Finance Documents and all corporate and other action
required to authorise its execution of the Finance Documents and its
performance of its obligations thereunder has been duly taken.

	 	 	 	 
	 	(ii)	 	
No Deductions or Withholding   Under the laws of its
jurisdiction of incorporation in force at the date hereof, it will
not be required to make any deduction or withholding from any payment
it may make under any of the Finance Documents.

	 	 	 	 
	 	(iii)	 	
Claims Pari Passu   (Without prejudice to the security to be
constituted by or pursuant to the Security Agreements) under the laws
of its jurisdiction of incorporation in force at the date hereof, its
indebtedness hereunder will, to the extent that it exceeds the
realised value of the security therefor, rank at least pari passu
with all its other unsecured indebtedness save that which is
preferred solely by any bankruptcy, insolvency or other similar laws
of general application.

28

 

	 	 	 	 
	 	(iv)	 	
No Immunity   In any proceedings taken in its jurisdiction of
incorporation in relation to any of the Finance Documents, it will
not be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process.

	 	 	 	 
	 	(v)	 	
Governing Law and Judgments   In any proceedings taken in its
jurisdiction of incorporation in relation to any of the Finance
Documents in which there is an express choice of the law of a
particular country as the governing law thereof that choice of law
and any judgment obtained in that country will be recognised and
enforced.

	 	 	 	 
	 	(vi)	 	
Validity and Admissibility in Evidence   As at the date hereof
all acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable it lawfully to enter into, exercise
its rights under and perform and comply with the obligations
expressed to be assumed by it in the Finance Documents, (b) to ensure
that the obligations expressed to be assumed by it in the Finance
Documents are legal, valid and binding and (c) to make the Finance
Documents admissible in evidence in its jurisdiction of incorporation
have been done, fulfilled and performed.

	 	 	 	 
	 	(vii)	 	
No Filing or Stamp Taxes   Under the laws of its jurisdiction
of incorporation in force at the date hereof, it is not necessary
that any of the Finance Documents
be filed, recorded or enrolled with any court or other authority
in its jurisdiction of incorporation other than the Registrar of
Companies or that any stamp, registration or similar tax be paid
on or in relation to any of the Finance Documents.

	 	 	 	 
	 	(viii)	 	
Binding Obligations   The obligations expressed to be assumed by it
in the Finance Documents are legal and valid obligations binding on
it in accordance with the terms of the Finance Documents.

	 	 	 	 
	 	(ix)	 	
No Winding-up   No member of the Guarantor’s Group has taken any
corporate action nor have any other steps been taken or legal
proceedings been started or (to the best of the Guarantor’s knowledge
and belief) threatened against any member of the Guarantor’s Group
for its winding-up, dissolution, administration or re-organisation or
for the appointment of a receiver, administrator, administrative
receiver, trustee or similar officer of it or of any or all of its
assets or revenues which might have a material adverse effect on the
business or financial condition of the Guarantor’s Group as a whole.

	 	 	 	 
	 	(x)	 	
No Material Defaults   No member of the Guarantor’s Group is in
breach of or in default under any agreement to which it is a party or
which is binding on it or any of its assets to an extent or in a
manner

29

 

	 	 	 	 
	 	 	 	
which might have a material adverse effect on the business or
financial condition of the Guarantor’s Group as a whole.

	 	 	 	 
	 	(xi)	 	
No Material Proceedings   No action or administrative proceeding
of or before any court or agency which is not covered by insurance or
which might have a material adverse effect on the business or
financial condition of any member of the Guarantor’s Group has been
started or is reasonably likely to be started.

	 	 	 	 
	 	(xii)	 	
Original Consolidated Financial Statements   The Original
Consolidated Financial Statements were prepared in accordance with US
GAAP and give (in conjunction with the notes thereto) a true and fair
view of the financial condition of the Borrower’s Group at the date
as of which they were prepared and the results of the Borrower’s
operations during the financial year then ended.

	 	 	 	 
	 	(xiii)	 	
No Material Adverse Change   Since publication of the last quarter
results for the current year, there has been no material adverse
change in the business or financial condition of any member of the
Guarantor’s Group.

	 	 	 	 
	 	(xiv)	 	
No Undisclosed Liabilities   As at the date as of which the
Original Consolidated Financial Statements were prepared no member of
the Borrower’s Group had any liabilities (contingent or otherwise)
which were not disclosed thereby (or by the notes thereto) or
reserved against therein nor any unrealised or anticipated losses
arising from commitments entered into by it which were not so
disclosed or reserved against therein (other than pursuant to the
Soponata-Teekay Guarantee).

	 	 	 	 
	 	(xv)	 	
No Obligation to Create Security   Its execution of this
Agreement and its exercise of its rights and performance of its
obligations hereunder will not result in the existence of nor oblige
any member of the Guarantor’s Group to create any encumbrance over
all or any of its present or future revenues or assets, other than
pursuant to the Finance Documents.

	 	 	 	 
	 	(xvi)	 	
Execution of this Agreement   Its execution of the Finance
Documents and its exercise of its rights and performance of its
obligations under any of the Finance Documents do not constitute and
will not result in any breach of any agreement or treaty to which it
is a party.

	 	 	 	 
	 	(xvii)	 	
Money Laundering   Any borrowing by it hereunder, and the
performance of its obligations hereunder and under the other Finance
Documents, will be for its own account and will not involve any
breach by it of any law or regulatory measure relating to “money

30

 

	 	 	 	 
	 	 	 	
laundering” as defined in Article 1 of the Directive (91/308/EEC) of
the Council of the European Communities.

	 	 	 
	13.2	 	
The representation and warranties of the Obligors in Clause 13.1 are
subject to:

	 	 	 	 
	 	(a)	 	
the principle that equitable remedies are remedies which may be
granted or refused at the discretion of the court;

	 	 	 	 
	 	(b)	 	
the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes, moratoria,
administration and other laws generally affecting or limiting the
rights of creditors;

	 	 	 	 
	 	(c)	 	
the time barring of claims under any applicable limitation
acts;

	 	 	 	 
	 	(d)	 	
the possibility that a court may strike out provisions for a
contract as being invalid for reasons of oppression, undue influence
or similar reasons; and

	 	 	 	 
	 	(e)	 	
any other reservations or qualifications of law express in any
legal opinions obtained by the Agent in connection with the Facility.

14.         FINANCIAL INFORMATION

	 	 	 
	14.1	 	
Annual Statements

	 	 
	 	The Guarantor shall as soon as the same become available, but in any event
within 180 days after the end of its financial years, deliver to the Agent
in sufficient copies for the Banks its consolidated and (if requested by
the Agent) unconsolidated financial statements for such financial year

	 	 	 
	14.2	 	
Quarterly Statements

	 	 
	 	The Guarantor shall as soon as the same become available, but in any event
within 60 days after the end of each quarterly accounting period in each
of its financial years, deliver to the Agent in sufficient copies for the
Banks its consolidated and (if requested by the Agent) unconsolidated
financial statements for such period

	 	 	 
	14.3	 	
Other Financial Information

	 	 
	 	The Guarantor shall from time to time promptly on the request of the
Agent, furnish the Agent with such information about the business and
financial condition of itself and the Guarantor’s Group as the Agent may
reasonably require

31

 

	 	 	 
	14.4	 	
Any Communication

	 	 
	 	The Guarantor shall as and when it despatches any communication to all or
any class of its creditors deliver to the Agent copies thereof in
sufficient copies for the Banks.

	 	 	 
	14.5	 	
Requirements as to Financial Statements

	 	 
	 	The Guarantor shall ensure that:

	 	 	 	 
	 	(i)	 	
each set of financial statements delivered by it pursuant to
this Clause 14 is prepared in accordance with US GAAP and
consistently applied;

	 	 	 	 
	 	(ii)	 	
each set of financial statements delivered by it pursuant to
this Clause 14 is certified by a duly authorised officer of the
Guarantor as giving a true and fair view of its financial condition
or, as the case may be, the financial condition of the Guarantor’s
Group as at the end of the period to which those financial statements
relate and of the results of its operations or, as the case may be,
the Guarantor’s Group during such period; and

	 	 	 	 
	 	(iii)	 	
each set of financial statements delivered by it pursuant to
Clause 14.1 (Annual Statements) has been audited by an
internationally recognised firm of independent auditors qualified to
audit accounts in accordance with US GAAP.

	 	 	 
	14.6	 	
Estimated Value of Vessels

	 	 	 	 
	 	(a)	 	
The Borrower shall within thirty days of each Quarter Date
deliver to the Agent:

	 	 	 	 
	 	(i)	 	
a summary showing the estimates of the Market
Value of each of the Vessels, made by at least three
recognised and independent valuers acceptable to the Agent as
at such Quarter Date,

	 	 	 	 
	 	(ii)	 	
a written estimate of the value of any other
asset in the Security Pool prepared (by a recognised and
independent valuer acceptable to the Agent) on the basis
established when such asset was introduced to the Security
Pool,

	 	 
	 	each such estimate to be provided at the sole cost of the
Borrower; and

	 	 	 	 
	 	(b)	 	
The Borrower shall not less than five business days prior to
the proposed date for the making any Advance deliver to the Agent:

	 	 	 	 
	 	(i)	 	
a summary showing the estimates of the Market
Value of each of the Vessels, made by at least three
recognised and

32

 

	 	 	 	 
	 	 	 	
independent valuers acceptable to the Agent as
at a date not more than thirty days prior to the proposed
date for the making of such Advance,

	 	 	 	 
	 	(ii)	 	
a written estimate of the value of any other
asset in the Security Pool prepared (by a recognised and
independent valuer acceptable to the Agent) on the basis
established when such asset was introduced to the Security
Pool,

	 	 
	 	each such estimate to be provided at the sole cost of the
Borrower;

	 	 
	 	Provided Always That if valuations have been supplied pursuant to
Clause 14.6(a) and:

	 	 	 	 
	 	(aa)	 	
the proposed date for the making of such
Advance falls less than 30 days after the Quarter Date in
respect of which such valuations were prepared, then the
Borrower shall not be obliged to comply with Clause 14.6(b)
in respect of such Advance; or
	 	 	 	 
	 	(bb)	 	
the proposed date for the making of such
Advance falls more than 30 days after the Quarter Date in
respect of which such valuations were prepared, then the
Borrower shall be obliged to comply with Clause 14.6(b) only
if so required by the Agent.

	 	 	 
	14.7	 	
Statement of Free Cash and Leverage

	 	 
	 	On each date on which it delivers its consolidated and unconsolidated
financial statements pursuant to Clause 14.1 (Annual Statements) and 14.2
(Quarterly Statements), the Guarantor shall deliver to the Agent a
statement showing the level of Free Cash and Leverage as at such date,
such statement to contain full details of how the same were determined (if
different from the method of the determination used in the preparation of
the previous such statement)

15.         FINANCIAL CONDITION AND SECURITY

	 	 	 
	15.1	 	
Financial Condition of the Guarantor’s Group

	 	 
	 	The Guarantor shall ensure that at all times the consolidated financial
condition of the Guarantor’s Group, as evidenced by the Guarantor’s then
most recent consolidated financial statements shall be such that Free Cash
is the greater of:-

	 	 	 	 
	 	(a)	 	
US$75,000,000; and
	 	 	 	 
	 	(b)	 	
7.5% of the Financial Indebtedness of the
Guarantor;

	 	 
	 	Provided that if the Guarantor changes its accounting policies from US GAAP generally, the Agent, following consultation with the Guarantor and

33

 

	 	 
	 	acting on the instructions of the Banks, may by notice to the Guarantor
specify an alternative to any of the requirements specified in paragraphs
(ii) and (iii) above which is logical having regard to the changes in
accounting policies that have occurred, in which event the Guarantor shall
be obliged to ensure that at all times thereafter the consolidated
financial condition of the Guarantor’s Group, as evidenced by the
Guarantor’s then most recent consolidated financial statements, is such as
to meet the alternative requirement so specified.

	 	 	 
	15.2	 	
Security Maintenance

	 	 
	 	The Borrower shall ensure that at all times the Estimated Value of the
Security Pool equals or exceeds the Cover Requirement and if the Agent
notifies the Borrower that the Estimated Value of the Security Pool is
below the Cover Requirement, the Borrower shall within one month of issue
of such notice, at the Borrower’s option:

	 	 	 	 
	 	(a)	 	
prepay a portion of the Loan; and/or
	 	 	 	 
	 	(b)	 	
provide to the Trustee additional security for
its obligations under the Finance Documents by way of an
encumbrance over dollar deposits and/or certificates of
deposit made by the Borrower or the Guarantor with or, as the
case may be, issued in favour of the Borrower or the
Guarantor by a bank or financial institution acceptable to
the Agent, such encumbrance to be created pursuant to a
security document in form and substance satisfactory to the
Agent; and/or
	 	 	 	 
	 	(c)	 	
provide to the Trustee additional security for
the Borrower’s obligations under the Finance Documents over
such vessel or vessels as shall have previously been approved
by the Agent acting on the instructions of an Instructing
Group, such approval not to be unreasonably withheld in the
case of vessel(s) of a type and size substantially comparable
to the other Vessels, such additional security to be provided
pursuant to security documents in form and substance
satisfactory to the Agent and consistent with the form of the
then existing Security Agreements

	 	 
	 	to the extent necessary to ensure that the
Estimated Value of the Security Pool is restored to the Cover
Requirement; Provided That a prepayment pursuant to Clause 15.2(a) shall be deemed also to be a cancellation pursuant to
Clause 7.1 (Cancellation) of the Facility in the amount
prepaid

34

 

	 	 	 
	15.3	 	
Loss or Sale of Vessel

	 	 
	 	If:-

	 	 	 	 
	 	(i)	 	
any Vessel shall become a total loss; or
	 	 	 	 
	 	(ii)	 	
any Vessel shall be sold,

	 	 
	 	then the Borrower shall within the period prescribed
by Clause 15.4 (Time Periods) at the Borrower’s option:

	 	 	 	 
	 	(a)	 	
prepay a portion of the Loan; and/or
	 	 	 	 
	 	(b)	 	
provide to the Trustee additional security for its obligations
under the Finance Documents by way of an encumbrance over dollar
deposits and/or certificates of deposit made by the Borrower or the
Guarantor with or, as the case may be, issued in favour of the
Borrower or the Guarantor by a bank or financial institution
acceptable to the Agent, such encumbrance to be created pursuant to a
security document in form and substance satisfactory to the Agent;
and/or
	 	 	 	 
	 	(c)	 	
provide to the Trustee additional security for the Borrower’s
obligations under the Finance Documents over such vessel or vessels
as shall have previously been approved by the Agent acting on the
instructions of an Instructing Group, such approval not to be
unreasonably withheld in the case of vessel(s) of a type and size
substantially comparable to the other Vessels, such additional
security to be provided pursuant to security documents in form and
substance satisfactory to the Agent and consistent with the form of
the then existing Security Agreements

	 	 
	 	to the extent necessary to ensure that the Cover Ratio in respect of the
Facility is restored to the level at which it was immediately before the
occurrence of such total loss or, as the case may be, the date of
completion of such sale Provided That a prepayment pursuant to Clause 15.3(a) shall be deemed also to be a cancellation pursuant to Clause 7.1
(Cancellation) of the Facility, in the amount prepaid.

	 	 	 
	15.4	 	
Time Periods

	 	 
	 	For the purposes of Clause 15.3 (Loss or Sale of Vessel) the period in
which the Borrower shall be obliged to do the things specified in Clause 15.3 (Loss or Sale of Vessel) shall be:

	 	 	 	 
	 	(i)	 	
where Clause 15.3(i) applies, on the earlier of the last day of
the Term of any current Advance during which the requisition
compensation or insurance proceeds in respect of the relevant total
loss were received and the date which falls four months after the
date of such total loss; and
	 	 	 	 
	 	(ii)	 	
where Clause 15.5(ii) applies, on the date of the completion of
the sale of the relevant Vessel.

35

 

	 	 	 
	15.5	 	
Average Age of Vessels

	 	 
	 	If at any time the Average Age of the Vessels is more than fifteen years
the Borrower shall, within thirty business days (or such longer period as
the Agent, acting on the instructions of an Instructing Group, may agree)
after such has become the case, either (i) provide to the Trustee
substitute security for the Borrower’s obligations under the Finance
Documents over such other newer vessel or vessels as shall have previously
been approved by the Agent acting on the instructions of an Instructing
Group (or, if such vessel(s) shall not be vessel(s) currently in the
Borrower’s fleet, approved by the Agent acting on the instructions of the
Instructing Group, such approval not to be unreasonably withheld in the
case of vessel(s) of a type and size comparable to vessel(s) currently in
the Borrower’s fleet), such substitute security to be provided in place of
the security over such Vessel or Vessels (which security shall be released
by the Trustee) as the Borrower may select pursuant to security documents
in form and substance satisfactory to the Agent and consistent with the
form of the then existing Security Agreements or (ii) request the Trustee
to release a Vessel or Vessels from the Security Agreements applicable
thereto and thereby bring the Average Age of Vessels to fifteen years or
below, which release the Trustee shall promptly effect after whatever
prepayment pursuant to Clause 6.5 (Prepayment), or cancellation pursuant
to Clause 7.1 (Cancellation), is necessary to ensure that after such
release, the Cover Ratio will be
what it was immediately before such release Provided Always That any such
prepayment shall be deemed also to be a cancellation pursuant to
Clause 7.1 (Cancellation) of the Facility in the amount prepaid.

	 	 	 
	15.6	 	
Vessel Substitution

	 	 
	 	The Borrower may provide to the Trustee substitute security for the
Borrower’s obligations under the Finance Documents over such other vessel
or vessels as shall have previously been approved by the Agent acting on
the instructions of an Instructing Group (or, if such vessel(s) shall not
be vessel(s) currently in the Borrower’s fleet, approved by the Agent
acting on the instructions of the Instructing Group, such approval not to
be unreasonably withheld in the case of vessel(s) of a type, size and
value comparable to vessel(s) currently in the Borrower’s fleet), such
substitute security to be provided in place of the security over such
Vessel or Vessels (which security shall be released by the Trustee) as the
Borrower may select pursuant to security documents in form and substance
satisfactory to the Agent and consistent with the form of the then
existing Security Agreements.

	 	 	 
	15.7	 	
Vessel Release

	 	 
	 	Following any reduction of the Aggregate Commitment under Clause 6.2
(Reduction) or Clause 7.1 (Cancellation), at the request of the Borrower,
the Agent shall, acting on the instructions of an Instructing Group,
approve the

36

 

	 	 
	 	release by the Trustee of a Vessel from the Security Pool
provided that the Cover Ratio is maintained at least at the level at which
it was immediately before any such reduction.

16.         COVENANTS

	 	 
	 	The following covenants shall remain in force for so long as the Available
Facility exists hereunder or either Obligor remains under any liability
hereunder (unless the Agent acting with the prior consent of an
Instructing Group agrees to waive or amend any such covenant):

	 	 	 	 
	 	(i)	 	
Stock Exchange   The Guarantor shall maintain a listing of its
equity share capital on a recognised stock exchange acceptable to the
Agent.
	 	 	 	 
	 	(ii)	 	
Maintenance of Legal Validity   Each Obligor shall obtain, comply
with the terms of and do all that is necessary to maintain in full
force and effect all authorisations, approvals, licences and consents
required in or by the laws and regulations of its jurisdiction of
incorporation and all other applicable jurisdictions to enable it
lawfully to enter into and perform its obligations under the Finance
Documents and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation and
all other applicable jurisdictions of the Finance Documents.
	 	 	 	 
	 	(iii)	 	
Notification of Events of Default   Each Obligor shall
promptly, upon becoming aware of the same, inform the Agent of the
occurrence of any Event of Default or Potential Event of Default and,
upon receipt of a written request to that effect from the Agent,
confirm to the Agent that, save as previously notified to the
Agent or as notified in such confirmation, no Event of Default or
Potential Event of Default has occurred.
	 	 	 	 
	 	(iv)	 	
Claims Pari Passu   Each Obligor shall ensure that at all times
the claims of the Agent, the Arrangers and the Banks against it under
this Agreement rank at least pari passu with the claims of all its
other unsecured creditors save those whose claims are preferred by
any bankruptcy, insolvency, liquidation or other similar laws of
general application.
	 	 	 	 
	 	(v)	 	
Management of Vessels   Each Obligor shall ensure that the
Vessels are at all times technically and commercially managed by a
member of the Guarantor’s Group.
	 	 	 	 
	 	(vi)	 	
Classification   Each Obligor shall ensure that the Vessels
maintain the highest class required for the trade the Vessels are
each engaged in with Det Norske Veritas or, as the case may be, the
Lloyds Register or such other classification society as is acceptable
to the Agent.

37

 

	 	 	 	 
	 	(vii)	 	
Indebtedness for Borrowed Money   The Borrower shall procure
that, save pursuant to (a) this Agreement (b) the Soponata-Teekay
Guarantee and (c) its obligations to make future capital
contributions to Bona Fortuna K/S and Bona Freighter K/S if and when
called upon to do so, neither it nor any of its subsidiaries shall
incur any indebtedness for borrowed money Provided Always that the
Borrower may incur indebtedness for borrowed money to the Guarantor
or any other member of the Guarantor’s Group provided that such
indebtedness is subordinated to the Borrower’s obligations hereunder
in terms satisfactory to the Agent acting on the instructions of an
Instructing Group and provided further that the Borrower may incur
indebtedness for borrowed money to any person not being a member of
the Guarantor’s Group and otherwise than pursuant to the foregoing
paragraphs (a) to (d) inclusive provided that such indebtedness does
not exceed $5,000,000 in aggregate.
	 	 	 	 
	 	(viii)	 	
No Charters in   The Borrower shall not, and shall procure that each
of its subsidiaries shall not, charter in any vessel, whether on
time, bareboat or voyage charter.
	 	 	 	 
	 	(ix)	 	
Negative Pledge   Neither Obligor shall (other than pursuant to,
or as permitted by, the Security Agreements), and shall procure that
none of its subsidiaries shall, create, or permit to subsist, any
encumbrance over all or any part of the Vessels.
	 	 	 	 
	 	(x)	 	
Consolidation   The Borrower shall not merge or consolidate with
any other entity except where the Borrower is the only surviving
entity and the Guarantor shall not merge or consolidate with any
other entity except where the Guarantor is the only surviving entity.
	 	 	 	 
	 	(xi)	 	
Registration   Each Obligor shall ensure that all the Vessels
are registered in Liberia, Bahamas, NIS, the Marshall Islands or
(with the consent of the Agent,
not to be unreasonably withheld or delayed) any other
international ship register.
	 	 	 	 
	 	(xii)	 	
ISM Compliance   Each Obligor shall comply (and procure that
the manager of any Vessel not managed by it complies) in all material
respects with the ISM Code or any replacement thereof and in
particular (without prejudice to the generality of the foregoing)
ensure that it holds (or procure that the manager of any Vessel not
managed by it holds) a valid and current Document of Compliance
issued pursuant to the ISM Code and a valid and current Safety
Management Certificate issued to each Vessel pursuant to the ISM
Code; the Borrower shall, promptly upon request from the Agent,
supply the Agent with copies of the foregoing documents.

38

 

	 
	 	(xiii)	 	
Restriction on Charters   The Borrower shall procure, in the case
where a Vessel is chartered to any member of the Guarantor’s Group or
to any Affiliate, that the relevant charterer provides the Trustee
with an assignment of the earnings only of such Vessel in form and
substance reasonably satisfactory to the Trustee (but consistent with
the terms of the Deeds of Assignment) such assignment to provide that
the Trustee shall not be entitled to require the assigned earnings to
be paid to the Trustee thereunder unless an Event of Default has
occurred and is continuing.

17.         EVENTS OF DEFAULT

	 	 	 
	17.1	 	
If:

	 	 	 	 
	 	(i)	 	
Failure to Pay   An Obligor fails to pay any amount of principal
due from it hereunder at the time, in the currency and in the manner
specified herein or, in the case of any sum due from it hereunder
other than principal, an Obligor fails to pay such sum and such
failure continues unremedied for five business days or, in the case
of sums payable on demand, ten business days after demand has been
duly made on the Obligor;
	 	 	 	 
	 	(ii)	 	
Misrepresentation   any representation or statement made by any
Finance Party in any Finance Document to which it is a party or in
any notice or other document, certificate or statement delivered by
it pursuant thereto or in connection therewith is or proves to have
been incorrect or misleading in any material respect when made and,
thirty days following notice thereof by the Agent to the Borrower,
such representation or statement continues to be incorrect or
misleading in any material respect;
	 	 	 	 
	 	(iii)	 	
Specific Covenants   (a) an Obligor fails duly to perform or
comply with any of the obligations expressed to be assumed by it in
Clause 16(i) (Stock Exchange) Clause 16(v) (Management of Vessels),
Clause 16(vii) (Indebtedness for Borrowed Money), Clause 16(x)
(Consolidation), Clause 16(xi) (Registration) or Clause 15.2
(Security Maintenance) or (b) the Borrower fails duly to perform or
comply with any of the obligations expressed to be assumed by it in
Clause 16(ii) (Maintenance of Legal Validity), Clause 16(iii)
(Notification of Events of Default), Clause 16(iv) (Claims Pari
Passu) or Clause 16(vi) (Classification)
and such failure is not remedied within thirty days after the
Agent has given notice thereof to the Borrower;
	 	 	 	 
	 	(iv)	 	
Financial Condition   at any time any of the requirements of
Clause 15 (Financial Condition and Security) are not satisfied;

39

 

	 	 	 	 
	 	 	 	 
	 	(v)	 	
Other Obligations on   an Obligor fails duly to perform or comply
with any other obligation expressed to be assumed by it in any
Finance Document and such failure is not remedied within thirty days
after the Agent has given notice thereof to the Obligor;
	 	 	 	 
	 	(vi)	 	
Cross Default   (a) any indebtedness of the Guarantor, any
Material Subsidiary, or any Affiliate is not paid when due (or within
any applicable grace period applicable thereto) or any indebtedness
of the Guarantor , any Material Subsidiary, or any Affiliate is
declared to be or otherwise becomes due and payable prior to its
specified maturity and (b) the aggregate of all such unpaid or
accelerated indebtedness referred to in (a) above exceeds
$10,000,000 or its equivalent in any other currency;
	 	 	 	 
	 	(vii)	 	
Insolvency and Rescheduling   the Guarantor , any Material
Subsidiary, or any Affiliate is unable to pay its debts as they fall
due, commences negotiations with any one or more of its creditors
with a view to the general readjustment or rescheduling of its
indebtedness or makes a general assignment for the benefit of its
creditors or a composition with its creditors;
	 	 	 	 
	 	(viii)	 	
Winding-up   (otherwise than for the purposes of a reconstruction on
terms previously approved by the Agent acting on the instructions of
an Instructing Group) the Guarantor, any Material Subsidiary, or any
Affiliate takes any corporate action or other steps are taken or
legal proceedings are started for its winding-up, dissolution,
administration or re-organisation or for the appointment of a
liquidator, receiver, administrator, administrative receiver,
conservator, custodian, trustee or similar officer of it or of any or
all of its revenues and assets;
	 	 	 	 
	 	(ix)	 	
Execution or Distress   (a) any execution or distress for an
aggregate amount of $10,000,000 (or its equivalent) in any other
currency is levied against, or an encumbrancer takes possession of,
the whole or any part of, the property, undertaking or assets of any
member of the Guarantor’s Group or any Affiliate (other than any
execution or distress which is being contested in good faith and
which is either discharged within thirty days or in respect of which
adequate security has been provided within thirty days to the
relevant court or other authority to enable the relevant execution or
distress to be lifted or released), or (b) any member of the
Guarantor’s Group or any Affiliate fails (within thirty days of being
obliged to do so) to comply with or pay any sum for an aggregate
amount in excess of $10,000,000 (or its equivalent in any other
currency) due from it under any final judgment (being one against
which there is no appeal or if a right of appeal exists, the time
limit for making such appeal

40

 

	 	 	 	 
	 	 	 	
has expired) or any final order (being
one against which there is no appeal or if a right of appeal
exists, the time limit for making such appeal has expired) made or
given by any court of competent jurisdiction;
	 	 	 	 
	 	(x)	 	
Governmental Intervention   by or under the authority of any
government, (a) the management of the Guarantor or any Material
Subsidiary is wholly or partially displaced or the authority of the
Guarantor or any Material Subsidiary in the conduct of its business
is wholly or partially curtailed or (b) all or a majority of the
issued shares of the Guarantor or any Material Subsidiary or the
whole or any part (the market value of which is ten per cent. or more
of the market value of the whole) of the Guarantor or any Material
Subsidiary’s revenues or assets are seized, nationalised,
expropriated or compulsorily acquired;
	 	 	 	 
	 	(xi)	 	
Insurance   any Vessel is not insured in accordance with the
requirements of any Security Agreement relating thereto;
	 	 	 	 
	 	(xii)	 	
Repudiation   any Finance Party repudiates any Finance Document
to which it is a party or does or causes to be done any act or thing
evidencing an intention to repudiate any such Finance Document;
	 	 	 	 
	 	(xiii)	 	
Validity and Admissibility   at any time any act, condition or thing
required to be done, fulfilled or performed in order (a) to enable
any Finance Party lawfully to enter into, exercise its rights under
and perform the respective obligations expressed to be assumed by it
in the Finance Documents, (b) to ensure that the obligations
expressed to be assumed by the Finance Parties in the Finance
Documents are legal, valid and binding or (c) to make the Finance
Documents admissible in evidence in any applicable jurisdiction is
not done, fulfilled or performed within thirty days after
notification from the Agent to the Borrower requiring the same to be
done, fulfilled or performed;
	 	 	 	 
	 	(xiv)	 	
Illegality   at any time it is or becomes unlawful for any
Finance Party to perform or comply with any or all of its obligations
under the Finance Documents to which it is a party or any of the
obligations of the relevant Finance Party hereunder are not or cease
to be legal, valid and binding and such illegality is not remedied or
mitigated to the satisfaction of the Agent within thirty days after
the Agent has given notice thereof to the Borrower;
	 	 	 	 
	 	(xv)	 	
Material Adverse Change   at any time there shall occur a change
in the financial condition of any Finance Party or any Material
Subsidiary which materially impairs such Finance Party’s ability to

41

 

	 	 	 	 
	 	 	 	
discharge its obligations under the Finance Documents to which it is
a party in the manner provided therein;
	 	 	 	 
	 	(xvi)	 	
Ownership of Borrower   The Guarantor ceases to own
beneficially one hundred per cent. of the issued shares of the
Borrower; or
	 	 	 	 
	 	(xvii)	 	
Ownership of Guarantor   at any time more than fifty per cent. (50%)
of the issued shares of the Guarantor shall be beneficially owned
(whether directly or indirectly) by any one person or any group or
persons acting in concert (other than Cirrus Trust, JTK Trust or any
successor thereto)

	 	 
	 	then, and in any such case and at any time thereafter (if such Event of
Default is continuing), the Agent may (and, if so instructed by an
Instructing Group, shall) by written notice to the Borrower:

	 	 	 	 
	 	(a)	 	
declare the Loan to be immediately due and payable (whereupon
the same shall become so payable together with accrued interest
thereon and any other sums then owed by the Borrower hereunder) or
declare the Loan to be due and payable on demand of the Agent; and/or
	 	 	 	 
	 	(b)	 	
declare that the Available Facilities shall be cancelled,
whereupon the same shall be cancelled and the amount of each Bank’s
Commitment shall be reduced to zero.

	 	 
	 	Provided Always That for the purposes of a declaration under Clause 17.1(a)
or 17.1(b) in relation only to the Event of Default referred to in
Clause 17.1(xvii) (Ownership of Guarantor), the definition of “Instructing
Group” shall be construed as if the expression “66 2/3 per cent” were
replaced by the expression “50 per cent” wherever it occurs.

	 	 	 
	17.2	 	
If, pursuant to Clause 17.1, the Agent declares the Loan to be due and
payable on demand of the Agent, then, and at any time thereafter, the
Agent may (and, if so instructed by an Instructing Group, shall) by
written notice to the Borrower:

	 	 	 	 
	 	(i)	 	
call for repayment of the Loan on such date as it may specify
in such notice (whereupon the same shall become due and payable on
such date together with accrued interest thereon and any other sums
then owed by the Borrower hereunder) or withdraw its declaration with
effect from such date as it may specify in such notice; and/or
	 	 	 	 
	 	(ii)	 	
select as the duration of any Term relating to an Advance which
begins whilst such declaration remains in effect a period of six
months or less.

42

 

Part 8

DEFAULT INTEREST AND INDEMNITY

18.         DEFAULT INTEREST AND INDEMNITY

	 	 	 
	18.1	 	
Default Interest Periods

	 	 
	 	If any sum due and payable by the Borrower hereunder is not paid on the
due date therefor in accordance with the provisions of Clause 20
(Payments) or if any sum due and payable by the Borrower under any
judgment of any court in connection herewith is not paid on the date of
such judgment, the period beginning on such due date or, as the case may
be, the date of such judgment and ending on the date upon which the
obligation of the Borrower to pay such sum (the balance thereof for the
time being unpaid being herein referred to as an “unpaid sum”) is
discharged shall be divided into successive periods, each of which (other
than the first) shall start on the last day of the preceding such period
and the duration of each of which shall (except as otherwise provided in
this Clause 18) be selected by the Agent.

	 	 	 
	18.2	 	
Default Interest

	 	 
	 	During each such period relating thereto as is mentioned in Clause 18.1
(Default Interest Periods) an unpaid sum shall bear interest at the rate
per annum which is the sum from time to time of two per cent., the
applicable Margin at such time, and LIBOR on the Quotation Date therefor
Provided that:

	 	 	 	 
	 	(i)	 	
if in relation to any such period LIBOR falls to be determined
in accordance with the proviso to the definition thereof and none of
the Reference Banks was offering dollar deposits for the requisite
period, the rate of interest applicable to such unpaid sum during
such period shall be the arithmetic mean (rounded upwards, if not
already such a multiple, to the nearest whole multiple of
one-thirty-second of one per cent.) of the rates notified by each
Bank to the Agent before the last day of such period to be those
which express as a percentage rate per annum the cost to it of
funding from whatever source it may select its portion of such unpaid
sum for such period; and
	 	 	 	 
	 	(ii)	 	
if such unpaid sum is all or part of an Advance which became
due and payable on a day other than the last day of an Interest
Period relating thereto, the first such period applicable thereto
shall be of a duration equal to the unexpired portion of that
Interest Period and the rate of interest applicable thereto during
such period shall be that which exceeds by two per cent. the rate
which would have been applicable to it had it not so fallen due.

43

 

	 	 	 
	18.3	 	
Payment of Default Interest

	 	 
	 	Any interest which shall have accrued under Clause 18.2 (Default Interest)
in respect of an unpaid sum shall be due and payable and shall be paid by
the Borrower at the end of the period by reference to which it is
calculated or on such other dates as the Agent may specify by written
notice to the Borrower.

	 	 	 
	18.4	 	
Broken Periods

		
	 	If any Bank or the Agent on its behalf receives or recovers all or any
part of such Bank’s share of an Advance otherwise than on the last day of
the Term thereof, the Borrower shall pay to the Agent on demand for
account of such Bank an amount equal to the amount (if any) by which (a) the
additional interest which would have been payable on the amount so
received or recovered had it been received or recovered on the last day of
the Term thereof exceeds (b) the amount of interest which in the opinion
of the Agent would have been payable to the Agent on the last day of the
Term thereof in respect of a dollar deposit equal to the amount so
received or recovered placed by it with a prime bank in London for a
period starting on the third business day following the date of such
receipt or recovery and ending on the last day of the Term thereof.

	 	 	 
	18.5	 	
Borrower’s Indemnity

	 	 
	 	The Borrower undertakes to indemnify:

	 	 	 	 
	 	(i)	 	
each of the Agent, the Arrangers, the Banks and the Trustee
against any cost, claim, loss, expense (including legal fees) or
liability together with any VAT thereon, which any of them may
reasonably sustain or incur as a consequence of the occurrence of any
Event of Default or any default by any Finance Party in the
performance of any of the obligations expressed to be assumed by it
in any of the Finance Documents; and
	 	 	 	 
	 	(ii)	 	
each Bank against any loss it may suffer or reasonably incur as
a result of its funding or making arrangements to fund its portion of
an Advance requested by the Borrower hereunder but not made by reason
of the operation of any one or more of the provisions hereof (but
excluding any loss arising by reason of that Bank’s default).

	 	 
	 	Each claim for an indemnity
from the Borrower under this Clause shall be accompanied
by a written explanation supporting such claim.

	 	 	 
	18.6	 	
Unpaid Sums as Advances

	 	 
	 	Any unpaid sum shall (for the purposes of this Clause 18 (Default Interest
and Indemnity) and Clause 10.1 (Increased Costs)) be treated as an advance
and accordingly in this Clause 18 and Clause 10.1 (Increased Costs)) the
term “Advance” includes any unpaid sum and “Term”, in relation to an
unpaid sum, includes each such period relating thereto as is mentioned in
Clause 18.1 (Default Interest Periods).

44

 

Part 9

PAYMENTS

19.         CURRENCY OF ACCOUNT AND PAYMENT

19.1       Currency of Account

	 	The dollar is the currency of account and payment for each and every sum
at any time due from an Obligor hereunder Provided that:

	 	 	 	 
	 	(i)	 	
each payment in respect of costs and expenses shall be made in
the currency in which the same were incurred; and

	 	 	 	 
	 	(ii)	 	
each payment pursuant to Clause 8.2 (Tax Indemnity) or Clause
10.1 (Increased Costs) shall be made in the currency specified by the
party claiming thereunder.

19.2       Currency Indemnity

	 	If any sum due from an Obligor under any Finance Document or any order or
judgment given or made in relation thereto has to be converted from the
currency (the “first currency”) in which the same is payable hereunder or
under such order or judgment into another currency (the “second currency”)
for the purpose of (a) making or filing a claim or proof against an
Obligor, (b) obtaining an order or judgment in any court or other tribunal
or (c) enforcing any order or judgment given or made in relation hereto,
the Obligor shall indemnify and hold harmless each of the persons to whom
such sum is due from and against any loss suffered or incurred as a result
of any discrepancy between (i) the rate of exchange used for such purpose
to convert the sum in question from the first currency into the second
currency and (ii) the rate or rates of exchange at which such person may
in the ordinary course of business purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction, in whole
or in part, of any such order, judgment, claim or proof.

20.         PAYMENTS

20.1       Payments
to the Agent

	 	On each date on which this Agreement requires an amount denominated in
dollars to be paid by an Obligor or any of the Banks hereunder, the
Obligor or, as the case may be, such Bank shall make the same available to
the Agent by payment in dollars and in same day funds (or in such other
funds as may for the time being be customary in New York City for the
settlement in New York City of international banking transactions in
dollars) to Citibank, N.A., New York for further account Citibank
International plc account number 10963054 (or such other account or bank
as the Agent may have specified for this purpose).

45

 

20.2       Alternative Payment Arrangements

	 	If, at any time, it shall become impracticable (by reason of any action of
any governmental authority or any change in law, exchange control
regulations or any similar event) for an Obligor to make any payments
hereunder in the manner specified in Clause 20.1 (Payments to the Agent),
then the Obligor may agree with each or any of the
Banks alternative arrangements for the payment direct to such Bank of
amounts due to such Bank hereunder Provided that, in the absence of any
such agreement with any Bank, the Obligor shall be obliged to make all
payments due to such Bank in the manner specified herein. Upon reaching
such agreement the Obligor and such Bank shall immediately notify the
Agent thereof and shall thereafter promptly notify the Agent of all
payments made direct to such Bank.

20.3        Payments by the Agent

	 	Save as otherwise provided herein, each payment received by the Agent for
the account of another person pursuant to Clause 20.1 (Payments to the
Agent) shall:

	 	 	 	 
	 	(i)	 	
in the case of a payment received for the account of an
Obligor, be made available by the Agent to the Obligor by
application:

	 	 	 	 
	 	(a)	 	
first, in or towards payment the same day of
any amount then due from the Obligor hereunder to the person
from whom the amount was so received; and

	 	 	 	 
	 	(b)	 	
secondly, in or towards payment the same day to
the account of the Obligor with such bank in New York City as
the Obligor shall have previously notified to the Agent for
this purpose; and

	 	 	 	 
	 	(ii)	 	
in the case of any other payment, be made available by the
Agent to the person for whose account such payment was received (in
the case of a Bank, for the account of the Facility Office) for value
the same day by transfer to such account of such person with such
bank in New York City as such person shall have previously notified
to the Agent.

20.4       No Set-off

	 	All payments required to be made by an Obligor under any of the Finance
Documents shall be calculated without reference to any set-off or
counterclaim and shall be made free and clear of and without any deduction
for or on account of any set-off or counterclaim.

20.5       Clawback

	 	Where a sum is to be paid hereunder to the Agent for account of another
person, the Agent shall not be obliged to make the same available to that

46

 

	 	other person until it has been able to establish to its satisfaction that
it has actually received such sum, but if it does so and it proves to be
the case that it had not actually received such sum, then the person to
whom such sum was so made available shall on request refund the same to
the Agent together with an amount sufficient to indemnify the Agent
against any cost or loss it may have suffered or reasonably incurred by
reason of its having paid out such sum prior to its having received such
sum.

21.         SET-OFF

21.1       Contractual Set-off

	 	Each Obligor authorises each Bank at any time following the occurrence of
an Event of Default (and so long as the same is continuing) to apply any
credit balance to which the Obligor is entitled on any account of the
Obligor with that Bank in satisfaction of any sum due and payable from the
Obligor to such Bank under any of the Finance Documents but unpaid; for
this purpose, each Bank is authorised to purchase with the moneys standing
to the credit of any such account such other currencies as may be
necessary to effect such application.

21.2       Set-off not Mandatory

	 	No Bank shall be obliged to
exercise any right given to it by Clause 21.1 (Contractual Set-off).

21.3       Notice of Set-Off

	 	A Bank shall promptly give notice to the Borrower following any exercise
of any right given to it by Clause 21.1 (Contractual Set-Off).

22.         SHARING

22.1       Redistribution
of Payments

	 	If, at any time, the proportion which any Bank (a “Recovering Bank”) has
received or recovered (whether by payment, the exercise of a right of
set-off or combination of accounts or otherwise) in respect of its portion
of any payment (a “relevant payment”) to be made under this Agreement by
an Obligor for account of such Recovering Bank and one or more other Banks
is greater (the portion of such receipt or recovery giving rise to such
excess proportion being herein called an “excess amount”) than the
proportion thereof so received or recovered by the Bank or Banks so
receiving or recovering the smallest proportion thereof, then:

	 	 	 	 
	 	(i)	 	
such Recovering Bank shall inform the Agent of such receipt or
recovery and pay to the Agent an amount equal to such excess amount;

47

 

	 	 	 	 
	 	(ii)	 	
there shall thereupon fall due from the Obligor to such
Recovering Bank an amount equal to the amount paid out by such
Recovering Bank pursuant to paragraph (i) above, the amount so due
being, for the purposes hereof, treated as if it were an unpaid part
of such Recovering Bank’s portion of such relevant payment; and

	 	 	 	 
	 	(iii)	 	
the Agent shall treat the amount received by it from such
Recovering Bank pursuant to paragraph (i) above as if such amount had
been received by it from the Obligor in respect of such relevant
payment and shall pay the same to the persons entitled thereto
(including such Recovering Bank) pro rata to their respective
entitlements thereto,

	 	Provided that to the extent that any excess amount is attributable to a
payment to a Bank pursuant to paragraph (i)(a) of Clause 20.3 (Payments by
the Agent) such portion of such excess amount as is so attributable shall
not be required to be shared pursuant hereto.

22.2       Repayable Recoveries

	 	If any sum (a “relevant sum”) received or recovered by a Recovering Bank
in respect of any amount owing to it by an Obligor becomes repayable and
is repaid by such Recovering Bank, then:

	 	 	 	 
	 	(i)	 	
each Bank which has received a share of such relevant sum by
reason of the implementation of Clause 22.1 (Redistribution of
Payments) shall, upon request of the Agent, pay to the Agent for
account of such Recovering Bank an amount equal to its share of such
relevant sum; and

	 	 	 	 
	 	(ii)	 	
there shall thereupon fall due from the Obligor to each such
Bank an amount equal to the amount paid out by it pursuant to
paragraph (i) above, the amount so due being, for the purposes
hereof, treated as if it were the sum payable to such Bank against
which such Bank’s share of such relevant sum was applied.

48

 

Part 10

FEES, COSTS AND EXPENSES

23.         COMMITMENT COMMISSION AND FEES

23.1       Commitment
Commission

	 	The Borrower shall pay to the Agent for the account of each Bank a
commitment commission on the amount of such Bank’s Available Commitment
from day to day during the period beginning on the Original Facility Date
up to (but not including) the Commitment Termination Date, such commitment
commission to be calculated at the rate of one half of the applicable
Margin from time to time.
	 
	 	Commitment commission shall be payable in arrear on the last day of each
successive period of three months starting from the Original Facility Date
and on the Final Maturity Date (each such date a “Commitment Commission
Payment Date”) Provided Always That for the purposes of determining the
amount of accrued commitment commission payable on each Commitment
Commission Payment Date the Leverage (and accordingly the applicable
Margin) shall be assumed to be as disclosed in the most recent financial
statements delivered pursuant to Clause 14.1 (Annual Statements) or Clause
14.2 (Quarterly Statements) Provided Further That if, on the basis of the
financial statements delivered in respect of the next following Quarter
Date (having regard to the proviso to the definition of “Margin”) the
Borrower has overpaid (or, as the case may be, underpaid) commitment
commission then the amount so overpaid (or, as the case may be, underpaid)
shall be deducted from (or, as the case may be, added to) the amount of
commitment commission which would otherwise have been payable by the
Borrower on the next following Commitment Commission Payment Date.

23.2       Participation Fee

	 	The Borrower shall pay to the Agent on the dates therein specified the
arrangement fees specified in the letter of even date herewith from the
Agent to the Borrower, such fees to be distributed by the Agent among the
Banks in the proportions agreed between the Banks prior to the Original
Facility Date.

23.3       Agency Fee

	 	The Borrower shall pay to the Agent for its own account the agency fees
specified in the letter dated the Original Facility Date from the Agent to
the Borrower, such agency fees to be paid at the times, and in the
amounts, specified in such letter.

49

 

24.         COSTS AND EXPENSES

24.1       Transaction
Expenses

	 	The Borrower shall, from time to time on demand of the Agent, reimburse
each of the Agent, the Arrangers and the Trustee for all out of pocket
costs and expenses (including reasonable legal fees) together with any VAT
thereon reasonably incurred by it in connection with the negotiation,
preparation and execution of the Finance Documents, any amendment and/or
supplement to or any waiver of any of the obligations of any
Finance Party under the Finance Documents and the completion of the
transactions herein contemplated.

24.2       Preservation and Enforcement of Rights

	 	The Borrower shall, from time to time on demand of the Agent, reimburse
the Agent, the Arrangers and the Banks for all costs and expenses
(including legal fees) together with any VAT thereon reasonably incurred
in or in connection with the preservation and/or enforcement of any of the
rights of the Agent, the Arrangers and the Banks under the Finance
Documents.

24.3       Stamp Taxes

	 	The Borrower shall pay all stamp, registration and other taxes to which
any Finance Document or any judgment given in connection therewith is or
at any time may be subject and shall, from time to time on demand of the
Agent, indemnify the Agent, the Arrangers and the Banks against any
liabilities, costs, claims and expenses resulting from any failure to pay
or any delay in paying any such tax.

24.4       Banks’ Liabilities for Costs

	 	If the Borrower fails to
perform any of its obligations under this Clause 24 (Costs
and Expenses), each Bank shall, in its Proportion, indemnify
each of the Agent and the Arrangers against any loss incurred by any of
them as a result of such failure and the Borrower shall forthwith
reimburse each Bank for any payment made by it pursuant to this Clause 24.4.

50

 

Part 11

AGENCY PROVISIONS

25.         THE AGENT, THE TRUSTEE, THE ARRANGERS AND THE BANKS

25.1       Appointment of the Agent and
the Trustee

	 	The Arrangers and each Bank hereby appoints the Agent and the Trustee to
act as its agent in connection with this Agreement and each other Finance
Document and authorises each of the Agent and the Trustee to exercise such
rights, powers, authorities and discretions as are specifically delegated
to the Agent by the terms of the Finance Documents together with all such
rights, powers, authorities and discretions as are reasonably incidental
thereto. The provisions of this Clause 25 are, in the case of the
Trustee, without prejudice to the provisions of the Security Trust Deed
and, in the event of any conflict between this Clause 25 and the Security
Trust Deed, the provisions of the Security Trust Deed will prevail.

25.2       Agent’s and the Trustee’s Discretions

	 	Each of the Agent and the Trustee may:

	 	 	 	 
	 	(i)	 	
assume, unless it has, in its capacity as agent for the Banks,
received notice to the contrary from any other party hereto, that (i)
any representation made by any Finance Party in connection with any
of the Finance Documents is true, (ii) no Event of Default or
Potential Event of Default has occurred, (iii) no Finance Party is in
breach of or default under its obligations under any of the Finance
Documents and (iv) any right, power, authority or discretion vested
therein upon an Instructing Group, the Banks or any other person or
group of persons has not been exercised;

	 	 	 	 
	 	(ii)	 	
assume that the Facility Office of each Bank is that identified
with its signature below (or, in the case of a Transferee, at the end
of the Transfer Certificate to which it is a party as Transferee)
until it has received from such Bank a notice designating some other
office of such Bank to replace its Facility Office and act upon any
such notice until the same is superseded by a further such notice;

	 	 	 	 
	 	(iii)	 	
engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may
to it seem necessary, expedient or desirable and rely upon any advice
so obtained;

	 	 	 	 
	 	(iv)	 	
rely (as to any matters of fact which might reasonably be
expected to be within the knowledge of any Finance Party) upon a
certificate signed by or on behalf of such Finance Party;

51

 

	 	 	 	 
	 	(v)	 	
rely upon any communication or document believed by it to be
genuine;

	 	 	 	 
	 	(vi)	 	
refrain from exercising any right, power or discretion vested
in it as agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, as to
the manner in which it should be exercised; and

	 	 	 	 
	 	(vii)	 	
refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising out
of or in connection with any Finance Document until it shall have
received such security as it may require (whether by way of payment
in advance or otherwise) for all costs, claims, losses, expenses
(including legal fees) and liabilities together with any VAT thereon
which it will or may expend or incur in complying with such
instructions.

25.3       Agent’s and Trustee’s Obligations

	 	The Agent and the Trustee shall:

	 	 	 	 
	 	(i)	 	
promptly inform each Bank of the contents of any notice or
document received by it in its capacity as Agent or Trustee from any
Finance Party under any Finance Document;

	 	 	 	 
	 	(ii)	 	
promptly notify each Bank of the occurrence of any Event of
Default or any default by any Finance Party in the due performance of
or compliance with its obligations under any Finance Document of
which the Agent or the Trustee has notice from any other party
hereto;

	 	 	 	 
	 	(iii)	 	
save as otherwise provided herein or therein, act as agent or
trustee under the Finance Documents in accordance with any
instructions given to it by an Instructing Group, which instructions
shall be binding on all of the Banks; and

	 	 	 	 
	 	(iv)	 	
if so instructed by an Instructing Group, refrain from
exercising any right, power or discretion vested in it as agent
hereunder or under any of the other Finance Documents.

25.4       Excluded Obligations

	 	Notwithstanding anything to the contrary expressed or implied herein, none
of the Agent, the Trustee or the Arrangers shall:

	 	 	 	 
	 	(i)	 	
be bound to enquire as to (i) whether or not any representation
made by the any Finance Party in connection with any Finance Document
is true, (ii) the occurrence or otherwise of any Event of Default or

52

 

	 	 	 	 
	 	 	 	
Potential Event of Default, (iii) the performance by any Finance
Document of its obligations under any of the Finance Documents or
(iv) any breach of or default by any Finance Party of or under its
obligations thereunder;

	 	 	 	 
	 	(ii)	 	
be bound to account to any Bank for any sum or the profit
element of any sum received by it for its own account;

	 	 	 	 
	 	(iv)	 	
be bound to disclose to any other person any information
relating to any member of the Guarantor’s Group if such disclosure
would or might in its opinion constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person; or

	 	 	 	 
	 	(iv)	 	
be under any obligations other than those for which express
provision is made herein.

25.5       Indemnification

	 	Each Bank shall, in its Proportion, from time to time on demand by the
Agent or, as the case may be, the Trustee, indemnify the Agent, against
any and all reasonable costs, claims, losses, expenses (including legal
fees) and liabilities together with any VAT thereon which the Agent or, as
the case may be, the Trustee may incur, otherwise than by reason of its
own gross negligence or wilful misconduct, in acting in its capacity as
agent or trustee under any of the Finance Documents Provided Always That
this Clause 25.5 (Indemnification) shall not apply to any cost, claim,
loss, expense or liability expressed to be recoverable from the Borrower
under Clause 24.1 (Transaction Expenses), 24.2 (Preservation and
Enforcement of Rights) or 24.3 (Stamp Taxes) (but without prejudice to
Clause 24.4 (Bank’s Liabilities for Costs)).

25.6       Exclusion of Liabilities

	 	Neither the Agent, the Trustee and the Arrangers nor any of them accepts
any responsibility for the accuracy and/or completeness of any information
supplied by the any Finance Party in connection with any of the Finance
Documents or for the legality, validity, effectiveness, adequacy or
enforceability of any of the Finance Documents and neither the Agent, the
Trustee and the Arrangers nor any of them shall be under any liability as
a result of taking or omitting to take any action in relation to any of
the Finance Documents, save in the case of gross negligence or wilful
misconduct.

25.7       No Actions

	 	Each of the Banks agrees that it will not assert or seek to assert against
any director, officer or employee of the Agent, the Trustee or Arrangers
any claim 

53

 

	 	it might have against any of them in respect of the matters
referred to in Clause 25.6 (Exclusion of Liabilities).

25.8       Business with the Guarantor’s Group

	 	The Agent, the Trustee and the Arrangers may accept deposits from, lend
money to and generally engage in any kind of banking or other business
with any member of the Guarantor’s Group.

25.9       Resignation

	 	Each of the Agent and the Trustee may resign its appointment under any
Finance Document at any time without assigning any reason therefor by
giving not less than thirty days’ prior written notice to that effect to
each of the other parties hereto Provided that no such resignation shall
be effective until a successor for the Agent or, as the case may be, the
Trustee is appointed in accordance with the succeeding provisions of this
Clause 25 or the Security Trust Deed.

25.10      Successor Agent

	 	If the Agent or, as the case may be, the Trustee gives notice of its
resignation pursuant to Clause 25.9 (Resignation), then any Bank whose
participation in the Facility is at least ten per cent. (10%) may be
appointed by an Instructing Group with the Borrower’s prior
written consent (such consent not to be unreasonably delayed or withheld)
as a successor to the Agent or, as the case may be, the Trustee by an
Instructing Group during the period of such notice but, if no such
successor is so appointed, the Agent or, as the case may be, the Trustee
may appoint such a successor itself.

25.11      Rights and Obligations

	 	If a successor to the Agent or, as the case may be, the Trustee is
appointed under the provisions of Clause 25.10 (Successor Agent), then (a) the retiring Agent or, as the case may be, the Trustee shall be discharged
from any further obligation under any of the Finance Documents but shall
remain entitled to the benefit of the provisions of this Clause 25 and (b) its successor and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if such
successor had been a party hereto.

25.12      Own Responsibility

	 	It is understood and agreed by each Bank that it has itself been, and will
continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of each member of
the Guarantor’s Group and, accordingly, each Bank warrants to the Agent,
the Trustee and the 

54

 

	 	Arrangers that it has not relied on and will not
hereafter rely on the Agent, the Trustee and the Arrangers or any of them:

	 	 	 	 
	 	(i)	 	
to check or enquire on its behalf into the adequacy, accuracy
or completeness of any information provided by any Finance Party in
connection with the Finance Documents or the transactions
contemplated thereby (whether or not such information has been or is
hereafter circulated to such Bank by the Agent, the Trustee and the
Arrangers or any of them); or

	 	 	 	 
	 	(ii)	 	
to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of
any member of the Guarantor’s Group.

25.13      Agency Division Separate

	 	In acting as Agent or, as the case may be, the Trustee hereunder for the
Banks, the Agent or, as the case may be, the Trustee 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 and, notwithstanding
the foregoing provisions of this Clause 25, any information received by
some other division or department of the Agent or, as the case may be, the
Trustee may be treated as confidential and shall not be regarded as having
been given to the Agent’s or the Trustee’s agency division.

25.14      Confidential Information

	 	Notwithstanding anything to the contrary expressed or implied herein and
without prejudice to the provisions of Clause 25.13 (Agency Division
Separate), neither the Agent nor the Trustee shall as between itself and
the Banks be bound to disclose to any Bank or other person any information
which is supplied by any member of the
Guarantor’s Group to the Agent in its capacity as agent or trustee
hereunder for the Banks and which is identified by such member of the
Guarantor’s Group at the time it is so supplied as being confidential
information.

55

 

Part 12

ASSIGNMENTS AND TRANSFERS

26.         ASSIGNMENTS AND TRANSFERS

26.1       Binding
Agreement

	 	This Agreement shall be binding upon and enure to the benefit of each
party hereto and its or any subsequent successors, Transferees and
permitted assigns.

26.2       No Assignments and Transfers by the Obligor

	 	An Obligor shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder.

26.3       Assignments and Transfers by Banks

	 	Any Bank may at any time (and at its own cost) assign to any bank or
financial institution all or any of its rights and benefits hereunder or
transfer to any bank or financial institution in accordance with Clause
26.5 (Transfers by Banks) all or any of its rights, benefits and
obligations hereunder Provided that:

	 	 	 	 
	 	(i)	 	
(save in the case of an assignment or transfer to any
subsidiary or holding company, or to any subsidiary of any holding
company, of such Bank or to another Bank) no such assignment or
transfer may be made without the prior written approval of the
Borrower, such approval not to be unreasonably withheld or delayed;

	 	 	 	 
	 	(ii)	 	
no Bank shall be entitled to effect any such assignment or
transfer (otherwise than with the prior written approval of the
Obligors) if as a result thereof (and as at the date thereof) an
Obligor would be obliged to make a payment to the assignee or
transferee which it would not have been obliged to make to such Bank
or which is greater than the payment it would have been obliged to
make to the assignor or transferor;

	 	 	 	 
	 	(iii)	 	
no Bank party hereto as at the Original Facility Date shall be
entitled to assign or transfer any of its rights and benefits
hereunder to more than one other bank or financial institution.

26.4       Assignments by Banks

	 	If any Bank assigns all or any of its rights and benefits hereunder in
accordance with Clause 26.3 (Assignments and Transfers by Banks), then,
unless and until the assignee has agreed with the Agent, the Trustee, the
Arrangers and the other Banks that it shall be under the same obligations
towards each of them as it would have been under if it had been an
original 

56

 

	 	party hereto as a Bank (whereupon such assignee shall become a
party hereto as a “Bank”), the Agent, the Trustee, the Arrangers and the
other Banks shall not be obliged to recognise such assignee as having the
rights against each of them which it would have had if it had been such a
party hereto.

26.5       Transfers by Banks

	 	If any Bank wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 26.3 (Assignments and
Transfers by Banks), then such transfer may be effected by the delivery to
the Agent and the Obligors of a duly completed and duly executed Transfer
Certificate in which event, on the later of the Transfer Date specified in
such Transfer Certificate and the fifth business day after (or such
earlier business day endorsed by the Agent on such Transfer Certificate
falling on or after) the date of delivery of such Transfer Certificate to
the Agent:

	 	 	 	 
	 	(i)	 	
to the extent that in such Transfer Certificate the Bank party
thereto seeks to transfer its rights, benefits and obligations
hereunder, each of the Obligors and such Bank shall be released from
further obligations towards one another hereunder and their
respective rights against one another shall be cancelled (such rights
and obligations being referred to in this Clause 26.5 as “discharged
rights and obligations”);

	 	 	 	 
	 	(ii)	 	
each of the Obligors and the Transferee party thereto shall
assume obligations towards one another and/or acquire rights against
one another which differ from such discharged rights and obligations
only in so far as the that Obligor and such Transferee have assumed
and/or acquired the same in place of that Obligor and such Bank;

	 	 	 	 
	 	(iii)	 	
the Agent, the Trustee the Arrangers, such Transferee and the
other Banks shall acquire the same rights and benefits and assume the
same obligations between themselves as they would have acquired and
assumed had such Transferee been an original party hereto as a Bank
with the rights, benefits and/or obligations acquired or assumed by
it as a result of such transfer; and

	 	 	 	 
	 	(iv)	 	
such Transferee shall become a party hereto as a “Bank”.

26.6       Transfer Fees

	 	On the date upon which a transfer takes effect pursuant to Clause 26.5
(Transfers by Banks) the Transferee in respect of such transfer shall pay
to the Agent for its own account a transfer fee of $1,000.

57

 

26.7       Disclosure of Information

	 	Any Bank may disclose with the prior written consent of the Finance
Parties (such consent in either case not to be unreasonably withheld) to
any actual or potential assignee or Transferee or to any person who may
otherwise enter into contractual relations with such Bank in relation to
this Agreement such information about the Guarantor, the Borrower and the
Guarantor’s Group as such Bank shall consider appropriate Provided That
the Borrower may require such Bank to obtain from such actual or potential
assignee, Transferee, or such other person, a confidentiality undertaking
(in a form reasonably acceptable to both the Borrower and such Bank) in
relation to such information about the Guarantor, the Borrower and/or the
Guarantor’s Group as has been supplied to the Banks on a confidential
basis.

58

 

Part 13

MISCELLANEOUS

27.         CALCULATIONS AND EVIDENCE OF DEBT

27.1       Basis
of Accrual

	 	Interest and commitment commission shall accrue from day to day and shall
be calculated on the basis of a year of 360 days and the actual number of
days elapsed.

27.2       Quotations

	 	If on any occasion a Reference Bank or a Bank fails to supply the Agent
with a quotation required of it under the foregoing provisions of this
Agreement, the rate for which such quotation was required shall be
determined from those quotations which are supplied to the Agent.

27.3       Evidence of Debt

	 	Each Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it
hereunder.

27.4       Control Accounts

	 	The Agent shall maintain on its books a control account or accounts in
which shall be recorded (a) the amount of any Advance made or arising
hereunder and each Bank’s share therein, (b) the amount of all principal,
interest and other sums due or to become due from the Borrower hereunder
and each Bank’s share therein and (c) the amount of any sum received or
recovered by the Agent hereunder and each Bank’s share therein.

27.5       Prima Facie Evidence

	 	In any legal action or proceeding arising out of or in connection with
this Agreement, the entries made in the accounts maintained pursuant to
Clause 27.3 (Evidence of Debt) and Clause 27.4 (Control Accounts) shall be
prima facie evidence of the existence and amounts of the specified
obligations of the Borrower.

27.6       Certificates of Banks

	 	A certificate of a Bank as to (a) the amount by which a sum payable to it
hereunder is to be increased under Clause 8.1 (Tax Gross-up) or (b) the
amount for the time being required to indemnify it against any such cost,
payment or liability as is mentioned in Clause 8.2 (Tax Indemnity) or
Clause 10.1 (Increased Costs) shall, in the absence of manifest error, be
prima facie evidence of the existence and amounts of the specified
obligations of the Borrower.

59

 

28.         REMEDIES AND WAIVERS, PARTIAL INVALIDITY

28.1       Remedies
and Waivers

	 	No failure to exercise, nor any delay in exercising, on the part of the
Agent, the Trustee, the Arrangers and the Banks or any of them, any right
or remedy under any of the
Finance Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or remedy. The rights
and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.

28.2       Partial Invalidity

	 	If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.

29.         NOTICES

29.1       Communications
in Writing

	 	Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, shall be made by facsimile or letter.

29.2       Delivery

	 	Any communication or document to be made or delivered by one party to the
other pursuant to this Agreement shall (unless the other party has by
fifteen days’ written notice to the one specified another address or
facsimile number) be made or delivered to that other party at the address
or facsimile number in the Fifth Schedule and shall be deemed to have been
made or delivered (in the case of any communication made by facsimile)
when despatched and the transmission report of the sender indicates that
the facsimile transmission has been received by the addressee or (in the
case of any communication made by letter) when delivered to that address
or (as the case may be) ten days after being deposited in the post postage
prepaid in an envelope addressed to it at that address Provided that:

	 	 	 	 
	 	(i)	 	
if any such communication or document would otherwise be deemed
to have been received on a day which is not a business day it shall
be deemed to have been received on the first business day thereafter;

	 	 	 	 
	 	(ii)	 	
any communication or document to be made or delivered by either
of the Obligors to a Bank shall be effective only when legibly
received by such Bank and then only if the same is expressly marked
for the attention of the department or officer named in the Fifth
Schedule or

60

 

	 	 	 	 
	 	 	 	
as set out in the relevant Transfer Certificate (or such
other department or officer as such Bank shall from time to time
specify for this purpose);

	 	 	 	 
	 	(iii)	 	
if any facsimile transmission has not been legibly received,
the addressee shall as soon as reasonably practicable notify the
giver by telephone and in such circumstances, notwithstanding any of
the foregoing provisions, such facsimile communication shall not be
deemed to be received until it has been re-transmitted and legibly
received.

29.3       English Language

	 	Each communication and document made or delivered by one party to another
pursuant to this Agreement shall be in the English language or accompanied
by a translation thereof into English certified (by an officer of the
person making or delivering the same) as being a true and accurate
translation thereof and in the event of a conflict between the original
and the English translation thereof, the translation will be taken to be
the definitive version for the purposes of the Finance Documents.

30.         AMENDMENTS

30.1       Amendments

	 	If the Agent has the prior consent of an Instructing Group, the Agent, the
Guarantor and the Borrower may from time to time agree in writing to amend
this Agreement or to waive, prospectively or retrospectively, any of the
requirements of this Agreement and any amendments or waivers so agreed
shall be binding on all parties hereto, provided that no such waiver or
amendment shall subject any party hereto to any new or additional
obligations without the consent of such party.

30.2       Amendments Requiring the Consent of all the Banks

	 	An amendment or waiver which relates to:-

	 	 	 	 
	 	(i)	 	
Clause 22 (Sharing) or this Clause 30 (Amendments);

	 	 	 	 
	 	(ii)	 	
a change in the principal amount of any Advance, or the
deferral of any Repayment Date or Reduction Date;

	 	 	 	 
	 	(iii)	 	
a change in the Margin or the amount of any payment of
interest, fees or any other amount payable hereunder to any party or
the deferral of the date for payment thereof;

	 	 	 	 
	 	(iv)	 	
the definition of “Instructing Group”; or

	 	 	 	 
	 	(v)	 	
any provision which contemplates the need for the consent or
approval of all the Banks,

61

 

	 	shall not be made without the prior consent of all the Banks.

30.3       Exceptions

	 	Notwithstanding any other provisions hereof, the Agent shall not be
obliged to agree to any such amendment or waiver if the same would:

	 	 	 	 
	 	(i)	 	
amend or waive this Clause 30.3, Clause 24 (Costs and Expenses)
or Clause 25 (The Agent, the Arrangers and the Banks); or

	 	 	 	 
	 	(ii)	 	
otherwise amend or waive any of the Agent’s rights hereunder or
subject the Agent or the Arrangers to any additional obligations
hereunder.

62

 

Part 14

LAW AND JURISDICTION

31.          LAW

31.1         English Law

	 	 	 	This Agreement shall be governed by, and shall be construed in accordance
with, English law.

32.          JURISDICTION

	32.1	 	Each of the parties hereto irrevocably agrees for the benefit of the
Agent, the Trustee and the Banks that the courts of England shall have
jurisdiction to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Agreement and, for such purposes, irrevocably submits to the jurisdiction
of such courts.
	 
	32.2	 	Each of the Obligors irrevocably waives any objection which it might now
or hereafter have to the courts referred to in Clause 32.1 being nominated
as the forum to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient
or appropriate forum.
	 
	32.3	 	Each of the Obligors agrees that the process by which any suit, action or
proceeding in England is begun may be served on it by being delivered to
Teekay Shipping (UK) Limited at its registered office for the time being
(which is currently at 49 St. James Street, London SW1A 1JT).
	 
	32.4	 	The submission to the jurisdiction of the courts referred to in Clause
32.1 shall not (and shall not be construed so as to) limit the right of
the Agent, the Trustee or any Bank to take proceedings against an Obligor
in any other court of competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.

63

 

THE FIRST SCHEDULE

The Banks

	 	 	 	 	 	 	 	 	 
	 	 	Commitment	 	Commitment
	Bank	 	(original) ($)	 	(current) ($)
	
	 	
	 	

	Citibank, N.A
	 	 	60,000,000	 	 	 	47,641,533.64	 
	The Chase Manhattan Bank
	 	 	60,000,000	 	 	 	47,641,533.64	 
	The Royal Bank of Scotland plc
	 	 	50,000,000	 	 	 	39,701,278.03	 
	Christiania Bank og Kreditkasse ASA
	 	 	42,500,000	 	 	 	33,746,086.33	 
	Den Norske Bank
	 	 	42,500,000	 	 	 	33,746,086.33	 
	Credit Agricole Indosuez
	 	 	35,000,000	 	 	 	27,790,894.62	 
	KBC Finance Ireland
	 	 	35,000,000	 	 	 	27,790,894.62	 
	Fortis Bank (Nederland) N.V
	 	 	35,000,000	 	 	 	7,790,894.62	 
	Schiffshypothekenbabk zu Lübeck AG
	 	 	32,500,000	 	 	 	25,805,830.72	 
	Fleet National Bank
	 	 	25,000,000	 	 	 	39,850,639.02	 
	Landesbank Schleswig-Holstein Girozentrale
	 	 	25,000,000	 	 	 	19,850,639.02	 
	Merita Bank plc
	 	 	18,000,000	 	 	 	14,292,460.09	 
	Deutsche Bank (Hamburg)
	 	 	17,500,000	 	 	 	13,895,447.31	 
	Deutsche Schiffsbank AG
	 	 	12,000,000	 	 	 	9,528,306.73	 
	VIKING Ship Finance Limited
	 	 	10,000,000	 	 	 	7,940,255.61	 
	 
	 	 	500,000,000	 	 	 	397,012,780.33	 

64

 

THE SECOND SCHEDULE

Vessels

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Owing Company	 	Jurisdiction	 	Vessel	 	Flag
	
	 	
	 	
	 	

	Bona Shipholding Ltd
	 	Bermuda	 	Kyeema Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Koa Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Kiowa Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Sotra Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Gotland Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Falster Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Shetland Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Orkney Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Sabine Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Hudson Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Columbia Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Shannon Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Clare Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Mersey Spirit	 	Bahamas
	Bona Shipholding Ltd
	 	Bermuda	 	Clyde Spirit	 	Bahamas
	Koyagi Spirit LLC
	 	Marshall Islands	 	Koyagi Spirit	 	Bahamas
	Pacific Spirit LLC
	 	Marshall Islands	 	Pacific Spirit	 	Bahamas
	Ulsan Spirit LLC
	 	Marshall Islands	 	Ulsan Spirit	 	Bahamas
	Cook Spirit LLC
	 	Marshall Islands	 	Cook Spirit	 	Bahamas
	Namsan Spirit LLC
	 	Marshall Islands	 	Namsan Spirit	 	Bahamas
	Palmstar Orchid LLC
	 	Marshall Islands	 	Palmstar Orchid	 	Bahamas
	Sebarok Spirit LLC
	 	Marshall Islands	 	Sebarok Spirit	 	Bahamas

65

 

THE THIRD SCHEDULE

Form of Transfer Certificate

To:          Citibank International plc

TRANSFER CERTIFICATE

relating to the agreement (as from time to time amended, varied, novated or
supplemented, the “Facility Agreement”) dated 16th December 1998 as amended and
restated on 11 June 1999 as further amended and restated on [         ] whereby a
U.S.$500,000,000 revolving credit facility was made available to Bona
Shipholding Ltd. as borrower by a group of banks on whose behalf Citibank
International plc acted as agent in connection therewith.

	1.	 	Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank and Transferee
are defined in the schedule hereto.
	 
	2.	 	The Bank (i) confirms that the details in the schedule hereto under the
heading “Bank’s Commitment” or “Advance(s)” accurately summarises its
Commitment and/or, as the case may be, its participation in, and the Term
and Repayment Date of, one or more existing Advances and (ii) requests the
Transferee to accept and procure the transfer to the Transferee of the
portion specified in the schedule hereto of, as the case may be, its
Commitment and/or its participation in such Advance(s) by counter-signing
and delivering this Transfer Certificate to the Agent at its address for
the service of notices specified in the Facility Agreement.
	 
	3.	 	The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the
purposes of Clause 26.5 (Transfers by Banks) of the Facility Agreement so
as to take effect in accordance with the terms thereof on the Transfer
Date or on such later date as may be determined in accordance with the
terms thereof.
	 
	4.	 	The Transferee confirms that it has received a copy of the Finance
Documents together with such other information as it has required in
connection with this transaction and that it has not relied and will not
hereafter rely on the Bank to check or enquire on its behalf into the
legality, validity, effectiveness, adequacy, accuracy or completeness of
any such information and further agrees that it has not relied and will
not rely on the Bank to assess or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status or
nature of the Borrower.

66

 

	5.	 	The Transferee hereby undertakes with the Bank and each of the other
parties to the Facility Agreement that it will perform in accordance with
their terms all those obligations which by the terms of the Facility
Agreement will be assumed by it after
delivery of this Transfer Certificate to the Agent and satisfaction of the
conditions (if any) subject to which this Transfer Certificate is
expressed to take effect.
	 
	6.	 	The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Facility Agreement or any document
relating thereto and assumes no responsibility for the financial condition
of an Obligor or for the performance and observance by an Obligor of any
of its obligations under the Facility Agreement or any document relating
thereto and any and all such conditions and warranties, whether express or
implied by law or otherwise, are hereby excluded.
	 
	7.	 	The Bank hereby gives notice that nothing herein or in the Facility
Agreement (or any document relating thereto) shall oblige the Bank to (a)
accept a re-transfer from the Transferee of the whole or any part of its
rights, benefits and/or obligations under the Facility Agreement
transferred pursuant hereto or (b) support any losses directly or
indirectly sustained or incurred by the Transferee for any reason
whatsoever including the non-performance by an Obligor or any other party
to the Facility Agreement (or any document relating thereto) of its
obligations under any such document. The Transferee hereby acknowledges
the absence of any such obligation as is referred to in (a) or (b) above.
	 
	8.	 	This Transfer Certificate and the rights, benefits and obligations of the
parties hereunder shall be governed by and construed in accordance with
English law.

67

 

THE SCHEDULE

	9.	 	Bank:
	 
	10.	 	Transferee:
	 
	11.	 	Transfer Date:
	 
	12.	 	Commitment:
	 
	 	 	Bank’s Commitment              Portion Transferred
	 
	13.	 	Advance(s):

	 	 	 	 	 	 
	 	Amount of
Bank’s Participation	 	
Term and
Repayment Date
	 	Portion Transferred

	 	 	 	 
	 	[Transferor Bank]	 	
[Transferee Bank]
	 
	 	By:	 	
By:
	 
	 	Date:	 	
Date:

Administrative Details of Transferee

	 	 
	 	Address:
	 	 
	 	Contact Name:
	 	 
	 	Account for Payments:
	 	 
	 	Fax:
	 	 
	 	Telephone:

68

 

THE FOURTH SCHEDULE

Notice of Drawdown

	 	 	 
	From:
 

To:	 	
Bona Shipholding Ltd.
 

Citibank International plc

Dated:

Dear Sirs,

	1.	 	We refer to the agreement (as from time to time amended, varied, novated
or supplemented, the “Facility Agreement”) dated 16th December 1998 as
amended and restated on 11 June 1999 as further amended and restated
on [         ], 2001 and made between Bona Shipholding Ltd. as borrower, Teekay
Shipping Corporation as guarantor, Chase Manhattan plc and Citibank
International plc as arrangers, Citibank International Plc as agent and
trustee and the financial institutions named therein as Banks. Terms
defined in the Facility Agreement shall have the same meaning in this
notice.
	 
	2.	 	We hereby give you notice that, pursuant to the Facility Agreement and
upon the terms and subject to the conditions contained therein, we wish an
Advance to be made to us as follows:

	 	 	 
	 	(a)	
Amount:

	 	 	 
	 	(b)	
Drawdown Date:

	 	 	 
	 	(c)	
Term:

	3.	 	We confirm that, at the date hereof, the representations set out in
Clause 13 (Representations) of the Facility Agreement are true and no
Event of Default or Potential Event of Default has occurred.
	 
	4.	 	The proceeds of this drawdown should be credited to [insert account
details].
 
 

	 
	Yours faithfully
	 
	 
	 
	 
	

	 
	 
	for and on behalf of

69

 

THE FIFTH SCHEDULE

Addresses for Notices

The Borrower

BONA SHIPHOLDING LTD.

	 	 	 
	Address:	 	
c/o Teekay Shipping (Canada) Ltd.

1400-505 Burrard Street

Vancouver

British Columbia

Canada
 
	Attn:

Fax:

E-Mail:	 	
Manager, Finance

(1) 604 681 3011

roy.spires@teekay.com

greg.romaniuk@teekay.com
 

The Guarantor

TEEKAY SHIPPING CORPORATION

	 	 	 
	Address:	 	
c/o Teekay Shipping (Canada) Ltd.

1400-505 Burrard Street

Vancouver

British Columbia

Canada
 
	Attn:

Fax:

E-Mail:	 	
Manager, Finance

(1) 604 681 3011

roy.spires@teekay.com

greg.romaniuk@teekay.com
 

Arranger

J.P. MORGAN SECURITIES INC.

	 	 	 
	Address:	 	
270 Park Avenue

New York, NY 10017
 
	Attn:

Fax:

E-Mail:	 	
Craig Fuehrer

(1) 212 270 6040

craig.fuehrer@chase.com
 

70

 

Arranger, Agent and Trustee

CITIBANK INTERNATIONAL plc

	 	 	 
	Address:	 	
Riverdale House

68 Molesworth Street

London SE13 7EU
 
	Attn:

Fax:

E-Mail:	 	
Charles M. Miller

(44) 20 7500 4482

charles.miller@citicorp.com
 

The Banks

CITIBANK, N.A.

	 	 	 
	Address:	 	
New York Shipping & Logistics

388 Greenwich Street — 23rd Floor

New York, NY 10013

USA
 
	Attn:

Fax:

E-Mail:	 	
Mark S. Johnson — Global Shipping

(1) 212 816 5429

mark.s.johnson@citi.com
 

THE CHASE MANHATTAN BANK

	 	 	 
	Address:	 	
270 Park Avenue

New York, NY 10017

USA
 
	Attn:

Fax:

E-Mail:	 	
Richard Smith

(1) 212 270 5100

richard.c.smith@chase.com
 

71

 

THE ROYAL BANK OF SCOTLAND PLC

	 	 	 
	Address:	 	
Shipping Business Centre

P.O. Box 450

5-10 Great Tower Street

London EC3P 3HX
 
	Attn:

Fax:

E-Mail:	 	
Colin Manchester

(44) 207 283 7538

colin.manchester@rbs.co.uk
 

CHRISTIANIA BANK OG KREDITKASSE ASA

	 	 	 
	Address:	 	
11 West 42st — 7th Floor

New York, NY 10036

USA
 
	Attn:	 	
Hans Chr. Kjelsrud/Ronny Bjornadal
 
	Fax:

E-Mail:	 	
(1) 212 827 4888/(1) 212 827 4826

hans.chr.kjelsrud@christianiabank.com

ronny.bjornadal@christianiabank.com
 

DEN NORSKE BANK ASA

	 	 	 
	Address:	 	
Stranden 21

N-0107 Oslo

Norway
 
	Attn:

Fax:

E-Mail:	 	
Harald Serck-Hanssen/Solveig Nuland Knoff, Credit Administration

(47) 22 48 28 94

harald.serck-hanssen@dnb.no

solveig.nuland-knoff@dnb.no
 

72

 

CREDIT AGRICOLE INDOSUEZ

	 	 	 
	Address:	 	
Ruselokkveien 6

P.O. Box 1675 Vika

0120 Oslo,

Norway
 
	Attn:

Fax:

E-Mail:	 	
Bjorn Gulbrandsen/Nils Christian Green/Xavier Robinot

(47) 22 01 06 51

bjorn.gulbrandsen@no.ca-indosuez.com

nilschristian.green@no.ca-indosuez.com

xavier.robinot@no.ca-indosuez.com
 

KBC FINANCE IRELAND

	 	 	 
	Address:	 	
KBC House

International Financial Services Centre

Dublin 1

Ireland
 
	Attn:

Fax:

E-Mail:	 	
Peter H. Stowell/Justin Lande

(353) 1 670 0853

peter.stowell@kbcbank.ie

justin.lande@kbcbank.ie.
 

FORTIS BANK (NEDERLAND) N.V., OLSO BRANCH (formerly MEESPIERSON N.V.)

	 	 	 
	Address:	 	
Munkedamsveien 53b

N-0250, Oslo

Norway
 
	Attn:

Fax:

E-Mail:	 	
Trond Hamre/Tobias Backer/Svein Engh

(47) 23 11 49 40

trond.hamre@fortisbank.no

tobias.backer@fortiscapitalusa.com

svein.engh@fortiscapitalusa.com
 

73

 

SCHIFFSHYPOTHEKENBANK ZU LÜBECK AG

	 	 	 
	Address:	 	
Brandstwiete 1

20457 Hamburg

Germany
 
	Attn:

Fax:

E-Mail:	 	
Jörg Zickermann

(49) 40 3701 4649

joerg.zickermann@db.com
 

FLEET NATIONAL BANK (formerly BANKBOSTON N.A.)

	 	 	 
	Address:	 	
100 Federal Street

Boston MA 02110

USA
 
	Attn:

Fax:

E-Mail:	 	
Credit matters: Sean McCarthy; Operational matters: Derek Taylor

Credit matters: + 1 617 434 1955; Operational matters: + 1 617 434 4366

sean_f_mccarthy@fleet.com
 

LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE

	 	 	 
	Address:	 	
Martensdamm 6

D-24 103 Kiel
 
	Attn:

Fax:

E-Mail:	 	
Meike Mättig/Edward Harris

+ 49 431 900 1130

meike.maettig@lb-kiel.de
 

MERITA BANK PLC, LONDON BRANCH

	 	 	 
	Address:	 	
19 Thomas More Street

London, E1W 1YF
 
	Attn:

Fax:

E-Mail:	 	
Tom Erik Vagen

+ 44 20 7265 3188

tom.erik.vagen@nordea.com
 

74

 

DEUTSCHE BANK AG IN HAMBURG

	 	 	 
	Address:	 	
Adolphsplatz 7

20457 Hamburg

Germany
 
	Attn:

Fax:

E-Mail:	 	
Jörg Zickermann, Ship Financing Dept.

(49) 40 3701 4649

joerg.zickermann@db.com
 

DEUTSCHE SCHIFFSBANK AG

	 	 	 
	Address:	 	
Domshof 17

D-28195 Bremen

Germany
 
	Attn:

Fax:

E-Mail:	 	
Geert Heckmann/Peter Zimmermann

(49) 421 323 539

geert.heckmann@schiffsbank.com

peter.zimmermann@schiffsbank.com
 

VIKING SHIP FINANCE LTD

	 	 	 
	Address:	 	
Claridenstrasse 40

P.O. Box 4025

CH-8022 Zurich

Switzerland
 
	Attn:

Fax:

E-Mail:	 	
Alexander Schaffert

(41) 1 205 5130

shipfinance@viking.ch
 

75<PAGE>

                                                                   EXHIBIT 10.19

                                 LIMITED WAIVER
                                       TO
                           CONVERTIBLE LOAN AGREEMENTS

         This Limited Waiver to Convertible Loan Agreements ("LIMITED WAIVER")

is made, as of this 31st day of December, 2001, by and between Renaissance US

Growth & Income Trust PLC, a public limited company registered in England and

Wales ("RENAISSANCE PLC"), and BFSUS Special Opportunities Trust PLC, a public

limited company registered in England and Wales ("BFSUS") (Renaissance PLC and

BFSUS are collectively referred to as the "RENAISSANCE LENDERS"), who are the

holders of not less than a majority of the outstanding principal amount of the

Renaissance Debentures (as defined below) and not less than a majority of the

outstanding principal amount of the June Debentures (as defined below) (the

"HOLDERS").

                  WHEREAS, Cover-All Technologies Inc., a Delaware corporation
         (the "COMPANY"), the Renaissance Lenders and Renaissance Capital Group,
         Inc., a Texas corporation, as agent for the Renaissance Lenders, are
         parties to that certain Convertible Loan Agreement, dated as of June
         28, 2001 (the "RENAISSANCE AGREEMENT"), pursuant to which the
         Renaissance Lenders purchased 8% Convertible Debentures from the
         Company for an aggregate principal amount of $1,400,000 (the
         "RENAISSANCE DEBENTURES"); and

                  WHEREAS, the Company and John Roblin, Arnold Schumsky and
         Stuart Sternberg (collectively, the "ADDITIONAL LENDERS" and, together
         with the Renaissance Lenders, the "Lenders"), and Stuart Sternberg, as
         agent for the Additional Lenders, are parties to that certain
         Convertible Loan Agreement, dated as of June 28, 2001 (the "ADDITIONAL
         LENDERS AGREEMENT"), pursuant to which the Additional Lenders purchased
         8% Convertible Debentures from the Company for an aggregate principal
         amount of $400,000 (the "ADDITIONAL LENDERS DEBENTURES" and, together
         with the Renaissance Debentures, the "JUNE DEBENTURES"); and

                  WHEREAS, terms not otherwise defined herein shall have the
         meanings as set forth in the Renaissance Agreement; and

                  WHEREAS, the Company is not in compliance with the financial
         covenant set forth in Section 7.01 for the fiscal quarter ending
         December 31, 2001 and the covenants set forth in Section 5.01 of the
         Renaissance Agreement, and the Company is not in compliance with the
         financial covenant set forth in Section

<PAGE>

         7.01 for the fiscal quarter ending December 31, 2001 and the covenants
         set forth in Section 5.01 of the Additional Lenders Agreement; and

                  WHEREAS, on September 30, 2001, the Holders waived, solely for
         the fiscal quarter ending September 30, 2001, the Company's
         non-compliance with the covenants contained in Sections 7.01 and 5.01
         of the Renaissance Agreement and Sections 7.01 and 5.01 of the
         Additional Lenders Agreement, provided that the Company is in
         compliance with such covenants for the fiscal quarter ending December
         31, 2001, and the Holders acknowledged and agreed that the Company's
         non-compliance with the covenants contained in Sections 7.01 and 5.01
         of the Renaissance Agreement and Sections 7.01 and 5.01 of the
         Additional Lenders Agreement is not, and shall not be, deemed a Default
         or an Event of Default under the Renaissance Agreement and the
         Additional Lenders Agreement, provided that the Company is in
         compliance with such covenants for the fiscal quarter ending December
         31, 2001; and

                  WHEREAS, the Company has requested that the Lenders, pursuant
         to Sections 12.02 and 11.04 of the Renaissance Agreement and Sections
         12.02 and 11.04 of the Additional Lenders Agreement, waive, solely for
         the fiscal quarter ending December 31, 2001, the Company's failure to
         comply with the financial covenant set forth in Section 7.01 for the
         fiscal quarter ending December 31, 2001, and the covenants set forth in
         Section 5.01 of the Renaissance Agreement, and the financial covenant
         set forth in Section 7.02 for the fiscal quarter ending December 31,
         2001, and the covenants set forth in Section 5.01 of the of the
         Additional Lenders Agreement; and

                  WHEREAS, the Company has requested that the Lenders, pursuant
         to Sections 12.02 and 11.04 of the Renaissance Agreement and Sections
         12.02 and 11.04 of the Additional Lenders Agreement, waive, solely for
         the fiscal quarter ending September 30, 2001, the Company's failure to
         comply with the financial covenant set forth in Section 7.01 for the
         fiscal quarter ending September 30, 2001, and the covenants set forth
         in Section 5.01 of the Renaissance Agreement, and the financial
         covenant set forth in Section 7.02 for the fiscal quarter ending
         September 30, 2001, and the covenants set forth in Section 5.01 of the
         of the Additional Lenders Agreement;

                  NOW, THEREFORE, in consideration of the premises and the
         mutual agreements set forth herein, the undersigned hereby agree as
         follows:

                           1. The Holders do hereby waive, solely for the fiscal
                  quarter ending December 31, 2001, the Company's non-compliance
                  with the covenants contained in Sections 7.01 and 5.01 of the
                  Renaissance Agreement and Sections 7.01 and 5.01 of the
                  Additional Lenders Agreement; and

                                      -2-
<PAGE>

                           2. The Holders do hereby acknowledge and agree that
                  the Company's non-compliance with the covenants contained in
                  Sections 7.01 and 5.01 of the Renaissance Agreement and
                  Sections 7.01 and 5.01 of the Additional Lenders Agreement for
                  the fiscal quarter ending December 31, 2001 is not, and shall
                  not be, deemed a Default or an Event of Default under the
                  Renaissance Agreement and the Additional Lenders Agreement;
                  and

                           3. The Holders do hereby waive, solely for the fiscal
                  quarter ending September 30, 2001, the Company's
                  non-compliance with the covenants contained in Sections 7.01
                  and 5.01 of the Renaissance Agreement and Sections 7.01 and
                  5.01 of the Additional Lenders Agreement; and

                           4. The Holders do hereby acknowledge and agree that
                  the Company's non-compliance with the covenants contained in
                  Sections 7.01 and 5.01 of the Renaissance Agreement and
                  Sections 7.01 and 5.01 of the Additional Lenders Agreement for
                  the fiscal quarter ending September 30, 2001 is not, and shall
                  not be, deemed a Default or an Event of Default under the
                  Renaissance Agreement and the Additional Lenders Agreement.

                         [Remainder of page intentionally left blank.]

                                      -3-
<PAGE>

                  IN WITNESS WHEREOF, this Limited Waiver is entered into as of
the date set forth above.

                                     HOLDERS:

                                     RENAISSANCE US GROWTH & INCOME TRUST PLC

                                     By: /s/  Russell Cleveland
                                         ---------------------------------------
                                         Russell Cleveland
                                         Director
                                         (holding 50% of the outstanding
                                         principal amount of the Renaissance
                                         Debentures and approximately 38.89% of
                                         the outstanding principal amount of the
                                         June Debentures)

                                     BFSUS SPECIAL OPPORTUNITIES TRUST PLC

                                     By: /s/  Russell Cleveland
                                         ---------------------------------------
                                         Russell Cleveland
                                         Director
                                         (holding 50% of the outstanding
                                         principal amount of the Renaissance
                                         Debentures and approximately 38.89% of
                                         the outstanding principal amount of the
                                         June Debentures)

                                      -4-

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