Document:

ex4-1.htm

Exhibit 4.1

 

	
 

DATED 22 July 2014

	
 

 

 

 

Up to USD 141,000,000

 

TERM LOAN FACILITY AGREEMENT

 

 

for

 

 

Borrowers to be nominated

 

 

with

 

DHT Holdings Inc

as Guarantor

 

 

 

arranged by

DVB Bank SE

 

Nordea Bank Norge ASA, and

 

ABN AMRO BANK N.V. Oslo Branch

acting as Mandated Lead Arrangers

 

with

 

ABN AMRO BANK N.V.

acting as Agent and Security Agent

 

 

 

 

  

  

Table of Contents

 

 

	
CONTENTS

	 
	
Clause

	
Page

	 	 
	
1.

	
Definitions and Interpretation

	
5

	 	 	 
	
2.

	
THE FACILITY

	
19

	 	 	 
	
3.

	
Purpose

	
19

	 	 	 
	
4.

	
Conditions of Utilisation

	
19

	 	 	 
	
5.

	
Utilisation

	
21

	 	 	 
	
6.

	
Repayment

	
22

	 	 	 
	
7.

	
Prepayment and cancellation

	
23

	 	 	 
	
8.

	
Interest

	
27

	 	 	 
	
9.

	
Interest Periods

	
28

	 	 	 
	
10.

	
Changes to the calculation of interest

	
28

	 	 	 
	
11.

	
Fees

	
29

	 	 	 
	
12.

	
Tax gross up and indemnities

	
31

	 	 	 
	
13.

	
Increased costs

	
35

	 	 	 
	
14.

	
Other indemnities

	
36

	 	 	 
	
15.

	
Mitigation by the Lenders

	
38

	 	 	 
	
16.

	
Costs and expenses

	
38

	 	 	 
	
17.

	
Security

	
40

	 	 	 
	
18.

	
Guarantee, indemnity AND JOINT AND SEVERAL LIABILITY

	
42

	 	 	 
	
19.

	
Representations

	
47

	 	 	 
	
20.

	
Information undertakings

	
51

	 	 	 
	
21.

	
Financial covenants

	
54

	 	 	 
	
22.

	
General undertakings

	
55

	 	 	 
	
23.

	
Vessels undertakings

	
59

	 	 	 
	
24.

	
Events of Default

	
63

	 	 	 
	
25.

	
Changes to the Lenders

	
67

	 	 	 
	
26.

	
Changes to the Obligors

	
70

	 	 	 
	
27.

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

	
71

	 	 	 
	
28.

	
Conduct of business by the Finance Parties or the Hedging banks

	
76

	 	 	 
	
29.

	
Sharing among the Finance Parties

	
76

	 	 	 
	
30.

	
Payment mechanics

	
78

	 	 	 
	
31.

	
Set-off

	
80

	 	 	 
	
32.

	
Notices

	
80

 

  

  

Table of Contents

 

	
33.

	
Calculations and certificates

	
82

	 	 	 
	
34.

	
Partial invalidity

	
82

	 	 	 
	
35.

	
Remedies and waivers

	
82

	 	 	 
	
36.

	
Amendments and waivers

	
82

	 	 	 
	
37.

	
Confidentiality

	
83

	 	 	 
	
38.

	
Counterparts

	
86

	 	 	 
	
39.

	
Conflict

	
87

	 	 	 
	
40.

	
Governing law

	
88

	 	 	 
	
41.

	
Enforcement

	
88

  

  

Table of Contents

 

 

	
THIS AGREEMENT is dated 22 July 2014 and made between:

	 
	
(1)

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

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

	  	  
	
(2)

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

	  	  
	  	
as guarantor (the "Guarantor");

	  	  
	
(3)

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

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

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

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

	 	 
	
(4)

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

	  	  
	
(5)

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

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

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

	  	  
	  	
(the "Hedging Banks");

	  	  
	
(6)

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

	  	  
	
(7)

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

	  	  
	 	 
	 	 
	
IT IS AGREED as follows:

 

  

  

Table of Contents

SECTION 1

INTERPRETATION

 

	
1.

	
DEFINITIONS AND INTERPRETATION

	  	  
	
1.1

	
Definitions

	  	
In this Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	  	
(a)

 

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

 

  

5

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exceeds:

 

	  	
(b)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	  	
"Commitment" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

	  	
"Disruption Event" means either or both of:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

	
from performing its payment obligations under the Finance Documents; or

 

	  	  	
(ii)

 

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

 

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

  

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Table of Contents

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

	
harm to or the protection of human health;

 

	  	
(c)

 

	
the conditions of the workplace; or

 

	  	
(d)

 

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

 

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

 

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

 

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

 

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

 

  

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Table of Contents

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
"FATCA Application Date" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

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

 

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

 

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

 

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

 

	  	
"FATCA Payment" means either:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

  

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

 

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

 

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

 

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

 

	  	
(a)

 

	
moneys borrowed;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

	  	
(i)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	  	
"Lender" means:

 

	  	
(a)

 

	
any Original Lender; and

 

	  	
(b)

 

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

 

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

 

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

 

	  	
(a)

 

	
the applicable Screen Rate; or

 

	  	
(b)

 

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

 

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

 

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

 

 

  

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"Majority Lenders" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

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

 

 

  

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"Mortgaged Assets" means:

 

	  	
(a)

 

	
the Vessels;

 

	  	
(b)

 

	
the Earnings;

 

	  	
(c)

 

	
any Charterparty;

 

	  	
(d)

 

	
the Shares;

 

	  	
(e)

 

	
any Hedging Agreement;

 

	  	
(f)

 

	
any Intra Group Loans;

 

	  	
(g)

 

	
the Insurances; and

 

	  	
(h)

 

	
the Earnings Accounts.

 

	  	
"Obligor" means a Borrower or the Guarantor.

 

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

 

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

 

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

 

	  	
"Party" means a party to this Agreement.

 

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

 

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

 

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

 

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

 

 

  

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"Relevant Interbank Market" means the London interbank market.

 

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

 

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

 

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

 

	  	
"Restricted Party" means a person:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

	
is otherwise a target of Sanctions Laws.

 

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

 

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

 

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

 

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

 

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

 

 

  

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

	
any expropriation, confiscation, requisition or acquisition of a Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a governmental or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the relevant Borrower.

 

	  	
"Total Loss Date" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

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

 

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

 

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

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

  

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"US Tax Obligor" means:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

	  	
"Utilisation" means the utilisation of the Facility.

 

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

 

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

 

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

 

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

 

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

 

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

 

	  	
"Working Capital" means Current Assets less Current Liabilities.

 

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

 

	
1.2

 

	
Construction

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

	  	  	
(v)

 

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

 

  

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(vi)

 

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

 

	  	  	
(vii)

 

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

 

	  	  	
(viii)

 

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

 

	  	  	
(ix)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

 

  

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SECTION 2

THE FACILITY

 

	
2.

 

	
THE FACILITY

 

	
2.1

 

	
The Facility

 

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

 

	
2.2

 

	
Finance Parties' rights and obligations

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
3.

 

	
PURPOSE

 

	
3.1

 

	
Purpose

 

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

 

	
3.2

 

	
Monitoring

 

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

 

	
4.

 

	
CONDITIONS OF UTILISATION

 

	
4.1

 

	
Initial conditions precedent

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
4.2

 

	
Further conditions precedent

 

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

 

	  	
(a)

 

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

 

 

  

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(b)

 

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

 

	
4.3

 

	
Maximum number of Tranches

 

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

 

	
4.4

 

	
Form and content

 

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

 

	  	
(a)

 

	
be in form and substance satisfactory to the Agent;

 

	  	
(b)

 

	
if required by the Agent, be in original; and

 

	  	
(c)

 

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

 

	
4.5

 

	
Waiver of conditions precedent

 

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

 

 

  

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SECTION 3

UTILISATION

 

	
5.

 

	
UTILISATION

 

	
5.1

 

	
Delivery of a Utilisation Request

 

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

 

	
5.2

 

	
Completion of a Utilisation Request

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
5.3

 

	
Currency and amount

 

	  	
(a)

 

	
The currency specified in the Utilisation Request must be USD.

 

	  	
(b)

 

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

 

	
5.4

 

	
Lenders' participation

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
5.5

 

	
Cancellation of Commitment

 

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

 

 

  

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

 

	
6.

 

	
REPAYMENT

 

	
6.1

 

	
Repayment of Loans

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

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

 

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

 

 

  

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

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

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

 

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

 

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

 

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

 

	  	
(d)

 

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

 

	
6.2

 

	
Re-borrowing

 

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

 

	
7.

 

	
PREPAYMENT AND CANCELLATION

 

	
7.1

 

	
Voluntary cancellation

 

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

 

  

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7.2

 

	
Voluntary prepayment of Loans

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
7.3

 

	
Illegality

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
7.4

 

	
Total Loss or sale of a Vessel

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

	
7.5

 

	
Market Value

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

 

  

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(ii)

 

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

 

	  	
(b)

 

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

 

	
7.6

 

	
Change of Control

 

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

 

	
7.7

 

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

 

	  	
(a)

 

	
If:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	  	
(i)

 

	
the Borrowers shall have no right to replace the Agent;

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

 

  

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7.8

 

	
Restrictions

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

 

  

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SECTION 5

COSTS OF UTILISATION

 

	
8.

 

	
INTEREST

 

	
8.1

 

	
Calculation of interest

 

	  	
(a)

 

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

 

	  	  	
(i)

 

	
Margin; and

 

	  	  	
(ii)

 

	
LIBOR.

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
8.2

 

	
Payment of interest

 

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

 

	
8.3

 

	
Default interest

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	
(c)

 

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

 

	
8.4

 

	
Notification of rates of interest

 

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

 

 

  

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9.

 

	
INTEREST PERIODS

 

	
9.1

 

	
Selection of Interest Periods

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

	  	  
	
9.2

 

	
Non-Business Days

 

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

 

	
10.

 

	
CHANGES TO THE CALCULATION OF INTEREST

 

	
10.1

 

	
Absence of quotations

 

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

 

	
10.2

 

	
Market disruption

 

	  	
(a)

 

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

 

	  	  	
(i)

 

	
the Margin; and

 

	  	  	
(ii)

 

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

 

  

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(b)

 

	
In this Agreement "Market Disruption Event" means:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	
10.3

 

	
Alternative basis of interest or funding

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
10.4

 

	
Break Costs

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
11.

 

	
FEES

 

	
11.1

 

	
Commitment fee

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
11.2

 

	
Arrangement fee

 

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

 

 

  

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11.3

 

	
Agency fee

 

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

 

 

  

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

 

	
12.

 

	
TAX GROSS UP AND INDEMNITIES

 

	
12.1

 

	
Definitions

 

	  	
(a)

 

	
In this Agreement:

 

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

 

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

 

	
12.2

 

	
Tax gross-up

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	
12.3

 

	
Tax indemnity

 

	  	
(a)

 

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

 

 

  

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(b)

 

	
Paragraph (a) above shall not apply:

 

	  	  	
(i)

 

	
with respect to any Tax assessed on a Finance Party:

 

	  	  	  	
(A)

 

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

 

	  	  	  	
(B)

 

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

 

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

 

	  	  	
(ii)

 

	
to the extent a loss, liability or cost:

 

	  	  	  	
(A)

 

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

 

	  	  	  	
(B)

 

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

 

	  	  	  	
(C)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	
12.4

 

	
Stamp taxes

 

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

 

	
12.5

 

	
VAT

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

  

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12.6

 

	
FATCA Information

 

	  	
(a)

 

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

 

	  	  	
(i)

 

	
confirm to that other Party whether it is:

 

	  	  	  	
(A)

 

	
a FATCA Exempt Party; or

 

	  	  	  	
(B)

 

	
not a FATCA Exempt Party; and

 

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

  

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	  	
(i)

 

	
any law or regulation;

 

	  	  	
(ii)

 

	
any fiduciary duty; or

 

	  	  	
(iii)

 

	
any duty of confidentiality.

 

	  	
(d)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	
12.7

 

	
FATCA Deduction and gross-up by Obligor

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

  

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(c)

 

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

 

	  	
(d)

 

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

 

	
12.8

 

	
FATCA Deduction by a Finance Party

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	
12.9

 

	
Tax Credit and FATCA

 

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

 

	  	
(a)

 

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

 

 

 

  

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(b)

 

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

 

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

 

 

 

	
13.

 

	
INCREASED COSTS

 

	
13.1

 

	
Increased costs

 

	  	
(a)

 

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

 

	  	
(b)

 

	
In this Agreement "Increased Costs" means:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

	
an additional or increased cost; or

 

	  	  	
(iii)

 

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

 

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

 

	
13.2

 

	
Increased cost claims

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
13.3

 

	
Exceptions

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

 

 

  

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(v)

 

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

 

	  	  	
(vi)

 

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

 

	  	  	
(vii)

 

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

 

	  	
(b)

 

	
In this Clause 13.3 (Exceptions),

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

 

 

	
14.

 

	
OTHER INDEMNITIES

 

	
14.1

 

	
Currency indemnity

 

	  	
(a)

 

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

 

	  	  	
(i)

 

	
making or filing a claim or proof against that Obligor;

 

	  	  	
(ii)

 

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

 

	  	  	
that Obligor shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

	  	
(b)

 

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

 

 

 

  

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14.2

 

	
Other indemnities

 

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

 

	  	
(a)

 

	
the occurrence of any Event of Default;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

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

 

	
14.3

 

	
Indemnity to the Agent

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
14.4

 

	
Mandatory Cost

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

  

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

 

	
15.

 

	
MITIGATION BY THE LENDERS

 

	
15.1

 

	
Mitigation

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
15.2

 

	
Limitation of liability

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
16.

 

	
COSTS AND EXPENSES

 

	
16.1

 

	
Transaction expenses

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
16.2

 

	
Amendment and enforcement costs

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

	
any amendment or variation of a Finance Document; and

 

 

 

  

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(d)

 

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

 

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

 

 

  

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SECTION 7

SECURITY

 

	
17.

 

	
SECURITY

 

	
17.1

 

	
Security

 

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

 

	  	
(a)

 

	
the Mortgages;

 

	  	
(b)

 

	
the Guarantee;

 

	  	
(c)

 

	
the Assignment Agreement;

 

	  	
(d)

 

	
the Pledge of Earnings Accounts;

 

	  	
(e)

 

	
any Intra Group Loans Assignment Agreement;

 

	  	
(f)

 

	
any Deed of Assignment; and

 

	  	
(g)

 

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

 

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

 

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

 

 

 

  

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17.2

 

	
Perfection etc.

 

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

 

	
17.3

 

	
Further assignment of Earnings and Charterparty and Shareholders Loans

 

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

 

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

 

	
17.4

 

	
Security - Hedging Agreement

 

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

 

	
17.5

 

	
Parallel Debt

 

	
 

  

	
(a)

 

	
In this Clause:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

	
The Parallel Debt of each Obligor:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	
(d)

 

	
For purposes of this Clause, the Security Agent:

 

	  	  	
(i)

 

	
is the independent and separate creditor of each Parallel Debt;

 

 

 

  

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(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	
18.

 

	
GUARANTEE, INDEMNITY AND JOINT AND SEVERAL LIABILITY

 

	
18.1

 

	
Guarantee and indemnity

 

	  	
The Guarantor irrevocably and unconditionally:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

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

 

 

 

  

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18.2

 

	
Continuing guarantee

 

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

 

	
18.3

 

	
Reinstatement

 

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

 

	
18.4

 

	
Joint and several liability of the Borrowers

 

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

 

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

 

	
18.5

 

	
Waiver of defences

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

	
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

 

	  	
(d)

 

	
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

 

	  	
(e)

 

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

 

 

 

  

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(f)

 

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

 

	  	
(g)

 

	
any insolvency or similar proceedings.

 

	
18.6

 

	
Immediate recourse

 

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

 

	
18.7

 

	
Appropriations

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
18.8

 

	
Deferral of the Borrowers’ and the Guarantor's rights

 

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

 

	  	
(a)

 

	
to be indemnified by another Obligor;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

 

 

  

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(f)

 

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

 

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

 

	
18.9

 

	
Additional security

 

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

 

	
18.10

 

	
Norwegian Financial Agreements Act

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

 

 

  

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(i)

 

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

 

	  	
(j)

 

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

 

	  	
(k)

 

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

 

	  	
(l)

 

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

 

	
18.11

 

	
Guarantee Limitations

 

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

 

  

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SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

	
19.

 

	
REPRESENTATIONS

 

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

 

	
19.1

 

	
Status

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
19.2

 

	
Binding obligations

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
19.3

 

	
Non-conflict with other obligations

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

	
its or any of its Subsidiaries' constitutional documents; or

 

	  	
(c)

 

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

 

	
19.4

 

	
Power and authority

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

  

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(c)

 

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

 

	
19.5

 

	
Validity and admissibility in evidence

 

	  	
All Authorisations required or desirable:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

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

 

	
19.6

 

	
Governing law and enforcement

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
19.7

 

	
Insolvency

 

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

 

	
19.8

 

	
Deduction of Tax

 

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

 

	
19.9

 

	
No filing or stamp taxes

 

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

 

	
19.10

 

	
No default

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

 

  

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19.11

 

	
No misleading information

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
19.12

 

	
Financial statements

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
19.13

 

	
Pari passu ranking

 

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

 

	
19.14

 

	
No proceedings pending or threatened

 

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

 

	
19.15

 

	
Title

 

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

 

	
19.16

 

	
No security

 

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

 

	
19.17

 

	
No immunity

 

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

 

 

 

 

  

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19.18

 

	
Ranking of Security Documents

 

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

 

	
19.19

 

	
Taxation

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
19.20

 

	
Environmental compliance

 

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

 

	
19.21

 

	
Environmental Claims

 

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

 

	
19.22

 

	
ISM Code and ISPS Code compliance

 

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

 

	
19.23

 

	
The Vessels

 

	  	
The Vessels will on the relevant Utilisation Date be:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

	
operationally seaworthy in every way and fit for service; and

 

	  	
(d)

 

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

 

	
19.24

 

	
Financial Indebtedness

 

	  	
No Obligor is in breach of or in default under any agreement or other instrument relating to Financial Indebtedness to which it is a party or by which it is bound (nor would it be with the giving of notice or lapse of time or both).

 

 

 

 

  

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19.25

 

	
Sanctions

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	
19.26

 

	
Repetition

 

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

 

	
20.

 

	
INFORMATION UNDERTAKINGS

 

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

 

	
20.1

 

	
Financial statements

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	
20.2

 

	
Compliance Certificate

 

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

 

	
20.3

 

	
Requirements as to financial statements

 

	  	
(a)

 

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

 

 

 

 

  

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(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	
20.4

 

	
Information: miscellaneous

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	
20.5

 

	
Notification of default

 

	  	
(a)

 

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

 

 

 

  

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(b)

 

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

 

	
20.6

 

	
Notification of Environmental Claims

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

	
20.7

 

	
Market Value

 

	  	
The Borrowers shall:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
20.8

 

	
"Know your customer" checks

 

	  	
(a)

 

	
If:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

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

 

 

 

 

  

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(b)

 

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

 

	  	
(c)

 

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

 

	
20.9

 

	
Disclosure of information

 

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

 

	
21.

 

	
FINANCIAL COVENANTS

 

	
21.1

 

	
The Guarantor

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

	
a positive Working Capital.

 

	
21.2

 

	
Each Borrower

 

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

 

 

 

  

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22.

 

	
GENERAL UNDERTAKINGS

 

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

 

	
22.1

 

	
Authorisations

 

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

 

	
22.2

 

	
Compliance with laws

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
22.3

 

	
Negative pledge

 

	  	
(a)

 

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

 

	  	
(b)

 

	
No Borrower shall:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

	
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

 

	  	  	
(iv)

 

	
enter into any other preferential arrangement having a similar effect,

 

	  	  	
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

 

	  	
(c)

 

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

 

	  	  	
(i)

 

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

 

 

 

  

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(ii)

 

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

 

	  	  	
(iii)

 

	
any Security entered into pursuant to any Finance Document;

 

	  	  	
(iv)

 

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

 

	  	  	
(v)

 

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

 

	  	  	
(vi)

 

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

 

	  	  	
(vii)

 

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

 

	
22.4

 

	
Disposals and acquisitions

 

	  	
The Borrowers shall not:

 

	  	
(a)

 

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

 

	  	
(b)

 

	
acquire or replace an asset or acquire any shares; or

 

	  	
(c)

 

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

 

	
22.5

 

	
Merger

 

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

 

	
22.6

 

	
Shareholding

 

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

 

	
22.7

 

	
Change of business

 

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

 

 

 

 

  

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22.8

 

	
Title

 

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

 

	
22.9

 

	
Insurances – general

 

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

 

	
22.10

 

	
Earnings Accounts

 

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

 

	
22.11

 

	
Derivative transactions

 

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

 

	
22.12

 

	
Distribution restrictions and subordination of inter-company debt

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
22.13

 

	
Transaction Documents

 

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

 

	
22.14

 

	
Taxation

 

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

 

	
22.15

 

	
No change of name etc.

 

	  	
No Obligor shall change:

 

	  	
(a)

 

	
the end of its fiscal year;

 

	  	
(b)

 

	
its nature of business;

 

	  	
(c)

 

	
(applicable for the Borrowers only) its constitutional documents;

 

 

 

 

  

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(d)

 

	
its legal name;

 

	  	
(e)

 

	
its type of organization; or

 

	  	
(f)

 

	
its jurisdiction;

 

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

 

	
22.16

 

	
Sanctions

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

	  	  	
(v)

 

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

 

	  	  	
(vi)

 

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

 

	  	
(b)

 

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

 

	
22.17

 

	
Application of FATCA

 

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

 

 

 

 

  

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23.

 

	
VESSELS UNDERTAKINGS

 

	
23.1

 

	
General

 

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

 

	
23.2

 

	
Insurance – Vessels

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

 

 

 

  

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(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

	  	
(i)

 

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

 

	  	
(j)

 

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

 

	
23.3

 

	
Flag, name and registry

 

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

 

	
23.4

 

	
Classification and repairs

 

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

 

 

 

 

  

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(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

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

 

	
23.5

 

	
Inspections and class records

 

	  	
(a)

 

	
The Borrowers shall procure that the Agent's surveyor at the Borrowers’ cost, is permitted to inspect the condition of the Vessels once a year, if so requested by the Agent, provided always that such arrangement shall not interfere with the operation of the Vessels and subject to satisfactory indemnities approved by the P&I insurers.

 

	  	
(b)

 

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

 

	
23.6

 

	
Surveys

 

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

 

	
23.7

 

	
Notification of certain events

 

	  	
The Borrowers shall immediately notify the Agent of:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	
23.8

 

	
Operation of the Vessels

 

	  	
(a)

 

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

 

 

 

 

  

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(b)

 

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

 

	  	
(c)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	
23.9

 

	
ISM Code compliance

 

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

 

	  	
(a)

 

	
procure that the Vessels remains subject to a SMS;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	
23.10

 

	
Environmental compliance

 

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

 

 

 

 

  

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23.11

 

	
Arrest

 

	  	
The Borrowers shall pay and discharge when due:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

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

 

	
23.12

 

	
Chartering

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
24.

 

	
EVENTS OF DEFAULT

 

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

 

	
24.1

 

	
Non-payment

 

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

 

	  	
(a)

 

	
its failure to pay is caused by:

 

	  	  	
(i)

 

	
administrative or technical error; or

 

	  	  	
(ii)

 

	
a Disruption Event; and

 

	  	
(b)

 

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

 

	
24.2

 

	
Financial covenants

 

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

 

	
24.3

 

	
Other obligations

 

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

 

 

 

 

  

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(a)

 

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

 

	  	
(b)

 

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

 

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

 

	
24.4

 

	
Misrepresentation

 

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

 

	
24.5

 

	
Cross default

 

	  	
(a)

 

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

 

	  	
(b)

 

	
Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	
24.6

 

	
Insolvency

 

	  	
(a)

 

	
Any Obligor is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
24.7

 

	
Insolvency proceedings

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

 

  

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(c)

 

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

 

	  	
(d)

 

	
enforcement of any Security over any assets of any Obligor,

 

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

 

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

 

	
24.8

 

	
Creditors' process

 

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

 

	
24.9

 

	
Unlawfulness

 

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

 

	
24.10

 

	
Repudiation

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
24.11

 

	
Material adverse change

 

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

 

	
24.12

 

	
Cessation of business

 

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

 

	
24.13

 

	
Insurances

 

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

 

	
24.14

 

	
Acceleration

 

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

 

	  	
(a)

 

	
cancel the Total Commitments whereupon they shall immediately be cancelled;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

 

 

  

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(d)

 

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

 

 

 

 

  

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SECTION 9

CHANGES TO PARTIES

 

	
25.

 

	
CHANGES TO THE LENDERS

 

	
25.1

 

	
Assignments and transfers by the Lenders

 

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

 

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

 

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

 

	  	  	
(i)

 

	
to another Lender or an Affiliate of a Lender;

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	
25.2

 

	
Conditions of assignment or transfer

 

	  	
(a)

 

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

 

	  	
(b)

 

	
If:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	  	
(c)

 

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

 

 

 

 

  

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25.3

 

	
Limitation of responsibility of Existing Lenders

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

	
the financial condition of any Obligor;

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

	  	  	
and any representations or warranties implied by law are excluded.

 

	  	
(b)

 

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

 

	  	  	
(i)

 

	
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

 

	  	  	
(ii)

 

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

 

	  	
(c)

 

	
Nothing in any Finance Document obliges an Existing Lender to:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	
25.4

 

	
Procedure for transfer

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

 

  

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(c)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	  	
(iv)

 

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

 

	
25.5

 

	
Copy of Transfer Certificate to the Borrowers

 

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

 

	
25.6

 

	
Pro rata interest settlement

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

 

 

  

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25.7

 

	
Securitisation

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

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

 

	
25.8

 

	
Security over Lenders' rights

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
except that no such charge, assignment or Security shall:

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	
26.

 

	
CHANGES TO THE OBLIGORS

 

	
26.1

 

	
Assignments and transfer by Obligors

 

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

 

	
26.2

 

	
Accession as Borrower

 

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

 

	
26.3

 

	
Compulsory resignation of FATCA FFIs and US Tax Obligors

 

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

 

  

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SECTION 10

THE FINANCE PARTIES

 

	
27.

 

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

 

	
27.1

 

	
Appointment of the Agent

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
27.2

 

	
Duties of the Agent

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	
27.3

 

	
Role of the Mandated Lead Arrangers

 

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

 

	
27.4

 

	
No fiduciary duties

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

 

  

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27.5

 

	
Business with any Obligor

 

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

 

	
27.6

 

	
Rights and discretions of the Agent

 

	  	
(a)

 

	
The Agent may rely on:

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	
27.7

 

	
Majority Lenders' instructions

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

 

 

 

  

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(d)

 

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

 

	  	
(e)

 

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

 

	
27.8

 

	
Responsibility for documentation

 

	  	
Neither the Agent nor any Mandated Lead Arranger:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
27.9

 

	
Exclusion of liability

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	
27.10

 

	
Lenders' indemnity to the Agent

 

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

 

 

 

  

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27.11

 

	
Resignation of the Agent

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	  	
(e)

 

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

 

	  	
(f)

 

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

 

	  	
(g)

 

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

 

	  	
(h)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

 

 

 

  

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(iii)

 

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

 

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

 

	
27.12

 

	
Confidentiality

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
27.13

 

	
Relationship with the Lenders

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

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

 

	  	
(b)

 

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

 

	
27.14

 

	
Credit appraisal by the Lenders and the Hedging Banks

 

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

 

 

 

  

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(a)

 

	
the financial condition, status and nature of each Obligor;

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	  	
(d)

 

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

 

	
27.15

 

	
Reference Banks

 

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

 

	
27.16

 

	
Deduction from amounts payable by the Agent

 

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

 

	
28.

 

	
CONDUCT OF BUSINESS BY THE FINANCE PARTIES OR THE HEDGING BANKS

 

	  	
No provision of this Agreement will:

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
29.

 

	
SHARING AMONG THE FINANCE PARTIES

 

	
29.1

 

	
Payments to Finance Parties

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

 

 

  

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(c)

 

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

 

	
29.2

 

	
Redistribution of payments

 

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

 

	
29.3

 

	
Recovering Finance Party's rights

 

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

 

	
29.4

 

	
Reversal of redistribution

 

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

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
29.5

 

	
Exceptions

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

  

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SECTION 11

ADMINISTRATION

 

	
30.

 

	
PAYMENT MECHANICS

 

	
30.1

 

	
Payments to the Agent

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
30.2

 

	
Distributions by the Agent

 

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

 

	
30.3

 

	
Distributions to an Obligor

 

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

 

	
30.4

 

	
Clawback

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
30.5

 

	
Partial payments

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	  	
(iii)

 

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

 

 

 

 

  

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(iv)

 

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

 

	  	  	
(v)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
30.6

 

	
No set-off by Borrowers and Guarantor

 

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

 

	
30.7

 

	
Business Days

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	
30.8

 

	
Currency of account

 

	  	
(a)

 

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

 

	  	
(b)

 

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

 

	  	
(c)

 

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

 

	
30.9

 

	
Change of currency

 

	  	
(a)

 

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

 

	  	  	
(i)

 

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

 

	  	  	
(ii)

 

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

 

	  	
(b)

 

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

 

 

 

  

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31.

 

	
SET-OFF

 

	  	
(a)

 

	
A Finance Party may set off any matured or un-matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured or un-matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

	  	
(b)

 

	
Each Borrower and Guarantor hereby agrees and accepts that this Clause 31 (Set-off) shall constitute a waiver of the provisions of Section 29 of the FA Act and further agrees and accepts, to the extent permitted by law that Section 29 of the FA Act shall not apply to this Agreement.

 

	
32.

 

	
NOTICES

 

	
32.1

 

	
Communications in writing

 

	  	
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by e-mail, fax or letter.

 

	
32.2

 

	
Addresses

 

	  	
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

 

	  	
(a)

 

	
in the case of the Borrowers and the Guarantor;

 

	  	  	
c/o DHT Management AS

Haakon VII's gate 1

P.O. Box 2039 Vika

0125 Oslo, Norway

	 	 	
 

 

	  	
(b)

 

	
in the case of the Security Agent and Agent, that identified with its name below,

 

	  	  	
ABN AMRO Bank N.V:

Agency Syndicated Loans/PAC HQ8042

Gustav Mahlerlaan 10

1082 PP Amsterdam, The Netherlands

 

	  	  	
E-mail:  Iwan.Rahimbaks@nl.abnamro.com; Salima.Chaouaou@nl.abnamro.com;

	  	  	
Jessie.Chau@nl.abnamro.com; Yvonne.Souw-Portier@nl.abnamro.com

	  	  	  
	  	  	
Attn:   Iwan Rahimbaks / Yvonne Souw-Portier /Salima Chaouaou / Jessie Chau /

	  	  	  
	  	  	

and (for the Agent's loan administration matters):

ABN AMRO Bank N.V:

P.O. Box 283

1000 EA Amsterdam, The Netherlands

E-mail: Agency.Services.Nederland@nl.abnamro.com

Fax no.: +31 20 628 30 30

Attn: Agency Services Nederland (PAC AA8222)

	  	  	

  

	  	
or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days' notice.

 

 

 

  

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32.3

 

	
Delivery

 

	  	
(a)

 

	
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

	  	  	
(i)

 

	
if by way of fax, when received in legible form; or

 

	  	  	
(ii)

 

	
if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

 

	  	  	
and, if a particular department or officer is specified as part of its address details provided under Clause 32.2 (Addresses), if addressed to that department or officer.

 

	  	
(b)

 

	
Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose).

 

	  	
(c)

 

	
All notices from or to an Obligor shall be sent through the Agent.

 

	  	
(d)

 

	
Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

 

	
32.4

 

	
Notification of address, e-mail and fax number

 

	  	
Promptly upon receipt of notification of an address, e-mail or fax number or change of address, e-mail or fax number pursuant to Clause 32.2 (Addresses) or changing its own address, e-mail or fax number, the Agent shall notify the other Parties.

 

	
32.5

 

	
Electronic communication

 

	  	
(a)

 

	
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

 

	  	  	
(i)

 

	
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

 

	  	  	
(ii)

 

	
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

	  	  	
(iii)

 

	
notify each other of any change to their address or any other such information supplied by them.

 

	  	
(b)

 

	
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

 

	
32.6

 

	
English language

 

	  	
(a)

 

	
Any notice given under or in connection with any Finance Document must be in English.

 

	  	
(b)

 

	
All other documents provided under or in connection with any Finance Document must be:

 

	  	  	
(i)

 

	
in English; or

 

 

 

  

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(ii)

 

	
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

	
33.

 

	
CALCULATIONS AND CERTIFICATES

 

	
33.1

 

	
Accounts

 

	  	
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

	
33.2

 

	
Certificates and Determinations

 

	  	
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

	
33.3

 

	
Day count convention

 

	  	
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

 

	
34.

 

	
PARTIAL INVALIDITY

 

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

 

	
35.

 

	
REMEDIES AND WAIVERS

 

	  	
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

	
36.

 

	
AMENDMENTS AND WAIVERS

 

	
36.1

 

	
Required consents

 

	  	
(a)

 

	
Subject to Clause 36.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the relevant Obligors and any such amendment or waiver will be binding on all Parties.

 

	  	
(b)

 

	
The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.

 

	
36.2

 

	
Exceptions

 

	  	
(a)

 

	
An amendment or waiver that has the effect of changing or which relates to:

 

	  	  	
(i)

 

	
the definition of "Majority Lenders" in Clause 1.1 (Definitions);

 

	  	  	
(ii)

 

	
an extension to the date of payment of any amount under the Finance Documents;

 

	  	  	
(iii)

 

	
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

 

 

 

  

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(iv)

 

	
an increase in or an extension of any Commitment;

 

	  	  	
(v)

 

	
any provision which expressly requires the consent of all the Lenders;

 

	  	  	
(vi)

 

	
Clause 2.2 (Finance Parties' rights and obligations), Clause 25 (Changes to the Lenders) or this Clause 36 (Amendments and waivers);

 

	  	  	
(vii)

 

	
the nature or scope of the guarantee and indemnity granted under Clause 18 (Guarantee, Indemnity and Joint and Several Liability);

 

	  	  	
(viii)

 

	
release of any Security created by the Security Documents unless permitted under the Finance Documents or undertaken by the Agent acting on instruction of the Majority Lenders following an Event of Default which is continuing;

 

	  	  	
(ix)

 

	
change to any Obligor;

 

	  	  	
(x)

 

	
governing law and jurisdiction;

 

	  	  	
(xi)

 

	
the manner in which the proceeds after enforcement are being applied; or

 

	  	  	
(xii)

 

	
any change to the Security Documents

 

	  	  	
shall not be made without the prior consent of all the Lenders.

 

	  	
(b)

 

	
An amendment or waiver which relates to the rights or obligations of the Agent or any Mandated Lead Arranger (each in their capacity as such) may not be effected without the consent of the Agent or, as the case may be, the relevant Mandated Lead Arranger.

 

	  	
(c)

 

	
An amendment or waiver which relates to the rights or obligations of a Hedging Bank (each in its capacity as such) may not be effected without the consent of the relevant Hedging Bank.

 

	
37.

 

	
CONFIDENTIALITY

 

	
37.1

 

	
Confidential information

 

	  	
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 37.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

	
37.2

 

	
Disclosure of Confidential Information

 

	  	
Any Finance Party may disclose:

 

	  	
(a)

 

	
to any of its Affiliates and Related Funds any of its or their officers, directors, employees, professional advisers, auditors, partners and representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information, except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

 

 

  

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(b)

 

	
to any person:

 

	  	  	
(i)

 

	
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, representatives and professional advisers;

 

	  	  	
(ii)

 

	
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Obligors and to any of that person's Affiliates, Related Funds, representatives and professional advisers;

 

	  	  	
(iii)

 

	
appointed by any Finance Party or by a person to whom paragraph b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph b) of Clause 27.13 (Relationship with the Lenders));

 

	  	  	
(iv)

 

	
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph b)(i) or b)(ii) above;

 

	  	  	
(v)

 

	
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

 

	  	  	
(vi)

 

	
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

 

	  	  	
(vii)

 

	
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security Interest (or may do so) pursuant to Clause 25.8 (Security over Lenders' rights) ;

 

	  	  	
(viii)

 

	
 who is a Party; or

 

	  	  	
(ix)

 

	
with the consent of the Obligors;

 

	  	
in each case, such Confidential Information as that Finance Party shall consider appropriate if:

 

	  	  	  	
(A)      in relation to paragraphs b)(i), b)(ii) and b(iii) above, the person to whom the Confidential Information is to be given has entered into a confidentiality undertaking except that there shall be no requirement for a confidentiality undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

	  	  	  	
(B)      in relation to paragraph b)(iv) above, the person to whom the Confidential Information is to be given has entered into a confidentiality undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

	  	  	  	
(C)      in relation to paragraphs b)(v), b)(vi) and b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

 

 

 

  

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(c)

 

	
to any person appointed by that Finance Party or by a person to whom paragraph b)(i) or b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master confidentiality undertaking for Use With Administration/ Settlement Service Providers or such other form of confidentiality undertaking agreed between the Obligors and the relevant Finance Party;

 

	  	
(d)

 

	
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information;

 

	  	
(e)

 

	
as set out in Clause 25.7 of this Agreement.

 

	
37.3

 

	
Disclosure to numbering service providers

 

	  	
(a)

 

	
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Obligors the following information:

 

	  	  	
(i)

 

	
name of the Obligors;

 

	  	  	
(ii)

 

	
country of domicile of the Obligors;

 

	  	  	
(iii)

 

	
place of incorporation of the Obligors;

 

	  	  	
(iv)

 

	
date of this Agreement;

 

	  	  	
(v)

 

	
the names of the Agent and the Arranger;

 

	  	  	
(vi)

 

	
date of each amendment and restatement of this Agreement;

 

	  	  	
(vii)

 

	
amount of Total Commitments;

 

	  	  	
(viii)

 

	
currencies of the Facility;

 

	  	  	
(ix)

 

	
type of Facility;

 

	  	  	
(x)

 

	
ranking of Facility;

 

	  	  	
(xi)

 

	
the Final Maturity Date;

 

	  	  	
(xii)

 

	
changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and

 

	  	  	
(xiii)

 

	
such other information agreed between such Finance Party and the Borrower,

 

 

 

  

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to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

	  	
(b)

 

	
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

 

	  	
(c)

 

	
The Obligors represent that none of the information set out in paragraphs (i) to (xiii) of paragraph a) above is, nor will at any time be, unpublished price-sensitive information.

 

	
37.4

 

	
Entire agreement

 

	  	
This Clause 37 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

	
37.5

 

	
Inside information

 

	  	
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

	
37.6

 

	
Notification of disclosure

 

	  	
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

 

	  	
(a)

 

	
of the circumstances of any disclosure of Confidential Information made pursuant to paragraph b)(ii) of Clause 37.2 (Disclosure of Confidential Information), except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

	  	
(b)

 

	
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 37 (Confidentiality).

 

	
37.7

 

	
Continuing obligations

 

	  	
The obligations in this Clause 37 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:

 

	  	
(a)

 

	
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

 

	  	
(b)

 

	
the date on which such Finance Party otherwise ceases to be a Finance Party.

 

	
38.

 

	
COUNTERPARTS

 

	  	
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

 

 

  

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39.

 

	
CONFLICT

 

	  	
In case of conflict between the Security Documents and this Agreement, the provisions of this Agreement shall prevail, provided however that this will not in any way be interpreted or applied to prejudice the legality, validity or enforceability of any Security Document.

 

 

 

  

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SECTION 12

GOVERNING LAW AND ENFORCEMENT

 

	
40.

 

	
GOVERNING LAW

 

	  	
This Agreement is governed by Norwegian law.

 

	
41.

 

	
ENFORCEMENT

 

	
41.1

 

	
Jurisdiction

 

	  	
(a)

 

	
The courts of Norway, the venue to be Oslo city court (in Norwegian: Oslo tingrett) have jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement (a "Dispute").

 

	  	
(b)

 

	
The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

	  	
(c)

 

	
This Clause 40.1 (Jurisdiction) is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

 

	
41.2

 

	
Service of process

 

	  	
Without prejudice to any other mode of service allowed under any relevant law, each Borrower and Guarantor:

 

	  	
(a)

 

	
irrevocably appoints DHT Management AS, Haakon VII's gate 1, P.O. Box 2039 Vika, 0125 Oslo, Norway as its agent for service of process in relation to any proceedings before the Norwegian courts in connection with any Finance Document; and

 

	  	
(b)

 

	
agrees that failure by a process agent to notify the relevant Borrower and/or Guarantor of the process will not invalidate the proceedings concerned.

 

	  	
If any process agent appointed shall cease to exist for any reason where process may be served, each Borrower or Guarantor will forthwith appoint another process agent with an office in Norway where process may be served and will forthwith notify the Agent thereof.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

  

88

  

 

SCHEDULE 1

The Original Lenders

 

 

	
Name of Original Lender:

 

	
Commitment:

	
 

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7 EB

United Kingdom

	
 

Up to USD 47,000,000

	  	  
	
ABN AMRO BANK N.V. Oslo Branch

	
Up to USD 47,000,000

	 	 
	Olav Vs gate 5 

0161 Oslo

	 
	 	 
	

Nordea Bank Norge ASA

Middelthunsgate 17

0368 Oslo

Norway

	
Up to USD 47,000,000

 

 

 

 

	 	
Total up to USD 141,000,000 

 

 

  

  

  

SCHEDULE 2

Conditions Precedent

Part I

 

Condition Precedent signing of Agreement

 

	
  

	
 

	
(Borrowers' document only to be provided upon signing of an Accession Letter)

 

	
  

	
1.

	
Borrowers and Guarantor

 

	
  

	
(a)

	
Certified copies of the constitutional documents of the relevant company.

 

	
  

	
(b)

	
Certificate of Incorporation, extract from the relevant Company Registry and/or updated Certificate of Good Standing;

 

	
  

	
(c)

	
A certified copy of a resolution of the board of directors, and if required by the Agent shareholders resolutions, of the relevant company:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, the Finance Documents and any Hedging Agreement to which it is a party and resolving that it execute the Finance Documents and any Hedging Agreement to which it is a party;

 

	
  

	
(ii)

	
authorising a specified person or persons to execute the Finance Documents and any Hedging Agreement to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents and any Hedging Agreement to which it is a party.

 

	
  

	
(d)

	
A copy of the passports of any Director of the relevant company and of each other person signing any Finance Documents and any Hedging Agreement, and  specimen of the signature of such persons if not evidenced by the passport copy;

 

	
  

	
(e)

	
An original Power of Attorney (notarised and legalised if requested by the Agent);

 

	
  

	
(f)

	
Evidence of the shareholder structure of the Borrowers and the 10 largest shareholders of the Guarantor based on latest publicly available filings; and

 

	
  

	
(g)

	
A certificate of an authorised signatory of the relevant company setting out the name of the Directors of the relevant Obligor certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

	
  

	
2.

	
Authorisations

 

	
  

	
All approvals, authorisations and consents required by any government or other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the other  Transaction Documents to which they are respective parties.

 

	
  

	
3.

	
Finance Documents

 

	
  

	
(a)

	
The Agreement;

 

	
  

	
(All Finance Documents to be delivered in original).

 

 

  

  

  

 

 

	
  

	
4.

	
Vessel Documents

 

	
  

	
(a)

	
Copy of the Shipbuilding Contracts;

 

	
  

	
5.

	
Legal opinions

 

	
  

	
(a)

	
If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement; and

 

	
  

	
(b)

	
Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

 

	
  

	
6.

	
Other documents and evidence

 

	
  

	
(a)

	
Evidence that any process agent referred to in Clause 40.2 (Service of process), if not an Obligor, has accepted its appointment;

 

	
  

	
(b)

	
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Guarantor accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document;

 

	
  

	
(c)

	
Evidence that all instalments due under the Shipbuilding Contracts prior to signing of the Agreement have been paid;

 

	
  

	
(d)

	
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the date hereof; and

 

	
  

	
(e)

	
Any other documents as reasonably requested by the Agent, hereunder any additional documentation required for any Finance Party to comply with their Know Your Customer requirements;

 

 

Part II

 

Condition Precedent Utilisation

 

	
  

	
1.

	
Borrowers and Guarantor

 

	
  

	
(a)

	
Certified copies of the constitutional documents of the relevant company;

 

	
  

	
(b)

	
Certificate of Incorporation, extract from the relevant Company Registry and/or updated Certificate of Good Standing;

 

	
  

	
(c)

	
A certified copy of a resolution of the board of directors, and if required by the Agent shareholders resolutions, of the relevant company:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, the Finance Documents and any Hedging Agreement to which it is a party and resolving that it execute the Finance Documents and any Hedging Agreement to which it is a party;

 

 

  

  

  

 

 

	
  

	
(ii)

	
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.

 

	
  

	
(d)

	
A copy of the passports of any Director of the relevant company and of each other person signing any Finance Documents, and specimen of the signature of such persons if not evidenced by the passport copy;

 

	
  

	
(e)

	
An original Power of Attorney (notarised and legalised if requested by the Agent);

 

	
  

	
(f)

	
Evidence of the shareholder structure of the Borrowers and the 10 largest shareholders of the Guarantor based on latest publicly available filings; and

 

	
  

	
(g)

	
A certificate of an authorised signatory of the relevant company setting out the name of the Directors of the relevant Obligor certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

	
  

	
2.

	
Authorisations

 

	
  

	
All approvals, authorisations and consents required by any government or other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the other  Transaction Documents to which they are respective parties.

 

	
  

	
3.

	
Finance Documents

 

	
  

	
(a)

	
The Mortgages;

 

	
  

	
(b)

	
The Assignment Agreement;

 

	
  

	
(c)

	
A Notice of Assignment of Insurances and acknowledgement thereof or standard letters of undertaking;

 

	
  

	
(d)

	
A Notice of Assignment of Earnings and acknowledgement thereof;

 

	
  

	
(e)

	
The Pledge of Earnings Accounts;

 

	
  

	
(f)

	
The Pledge of Shares with the notices, transcripts and evidence required thereunder;.

 

	
  

	
(g)

	
Any Deed of Assignment and the notices and acknowledgements required thereunder; and

 

	
  

	
(h)

	
Any Intra Group Loans Assignment Agreement the notices, transcripts and evidence required thereunder.

 

	
  

	
(All Finance Documents to be delivered in original).

 

	
  

	
4.

	
Documents relating to the Vessels

 

	
  

	
(a)

	
A certified copy of the Builder Certificate;

 

	
  

	
(b)

	
Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the Vessels in accordance with Clause 23.2 (Insurances - Vessels), and evidencing that the Agent's Security in the insurance policies have been noted in accordance with the relevant notices as required under the Assignment Agreement;

 

 

  

  

  

 

 

	
  

	
(c)

	
A certified copy of the Protocol of Delivery and Acceptance under the relevant Shipbuilding Contract;

 

	
  

	
(d)

	
A certified copy of any Charterparty;

 

	
  

	
(e)

	
A copy of the current DOC;

 

	
  

	
(f)

	
A certified copy of any Technical Management Agreement;

 

	
  

	
(g)

	
A certified copy of any Commercial Management Agreement;

 

	
  

	
(h)

	
A survey report in respect of each Vessel;

 

	
  

	
(i)

	
A certified copy of updated confirmations of class (or equivalent) in respect of the Vessels from the relevant classification society, confirming that the Vessels are classed in accordance with Clause 23.4 (Classification and repairs), free of extensions and overdue recommendations;

 

	
  

	
(j)

	
A copy of the Vessels’ current SMC;

 

	
  

	
(k)

	
A copy of the Vessels’ ISSC; and

 

	
  

	
(l)

	
Updated valuation certificates in respect of each of the Vessels issued no more than thirty (30) days prior to the relevant Utilisation Date.

 

	
  

	
The following documents to be received by the Agent latest on the relevant Utilisation Date:

 

	
  

	
(m)

	
Evidence (by way of transcript of registry) that the Vessels are registered in the name of the relevant Borrower in an Approved Ship Registry acceptable to the Agent, that the Mortgages have been, or will in connection with Utilisation of the Facility be, executed and recorded with their intended first priority against the relevant Vessel and that no other encumbrances, maritime liens, mortgages or debts whatsoever are registered against the Vessels.

 

	
  

	
5.

	
Legal opinions

 

	
  

	
The following documents to be received by the Agent latest on the Utilisation Date:

 

	
  

	
(a)

	
If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement;

 

	
  

	
(b)

	
If any Mortgaged Asset is situated in a jurisdiction other than Norway, or any Finance Document is subject to any other choice of law than Norwegian law, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement; and

 

	
  

	
(c)

	
Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

 

 

  

  

  

 

	
  

	
6.

	
Other documents and evidence

 

	
  

	
(a)

	
Evidence that any process agent referred to in the Security Documents , if not a Party to this Agreement, has accepted its appointment;

 

	
  

	
(b)

	
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document;

 

	
  

	
(c)

	
A Utilisation Request at least three (3) Business Days prior to the Utilisation Date;

 

	
  

	
(d)

	
Evidence that all instalments due under the relevant Shipbuilding Contract prior to the Utilisation Date have been paid;

 

	
  

	
(e)

	
A favourable opinion from the Agent's insurance consultants at the expense of the Borrowers confirming that the required insurances have been placed and are acceptable to the Agent and that the underwriters are acceptable to the Agent;

 

	
  

	
(f)

	
An original Compliance Certificate confirming that the Borrowers and the Guarantor are in compliance with the financial covenants as set out in Clause 21 (Financial covenants);

 

	
  

	
(g)

	
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the Utilisation Date;

 

	
  

	
(h)

	
Any agreements in respect of Intra Group Loans and evidence that they are subordinated to the obligations of the Borrowers under the Finance Documents and any Hedging Agreements;

 

	
  

	
(i)

	
Manager’s undertakings from the Technical Manager and the Commercial Manager in such form as the Agent may require; and

 

	
  

	
(j)

	
Any other documents as reasonably requested by the Agent, hereunder any additional documentation required for any Finance Party to comply with their Know Your Customer requirements.

 

  

  

  

SCHEDULE 3

 

PART I

 

Utilisation Request

 

From:   [                                 ], [                                 ] and [                                 ]

 

To:       ABN AMRO BANK N.V.

 

Dated:

 

Dear Sirs

 

[                        ], [                              ] and[                          ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
  

	
1.

	
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

	
  

	
2.

	
We wish to borrow the Loan on the following terms:

 

	
Proposed Utilisation Date:

	
[ ] (or, if that is not a Business Day, the next 

Business Day)

	
Amount:

	
[ ] or, if less, the Available Facility

	
  

	
3.

	
We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request.

 

	
  

	
4.

	
The proceeds of this Loan should be credited to [account].

 

	
  

	
5.

	
This Utilisation Request is irrevocable.

 

Yours faithfully

 

 

.......................................

authorised signatory for

[                           ], [                           ] and [                           ]

 

  

  

  

Part II

 

Selection Notice

 

From:   [                           ], [                           ] and [                           ]

 

To:       [name of Agent]

 

Dated:

 

Dear Sirs

 

[                           ], [                           ] and[                           ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
  

	
1.

	
We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

 

	
  

	
2.

	
We refer to the [Loan] [Tranche in respect of the Vessel [    ]] with an Interest Period ending on [               ].

 

	
  

	
3.

	
We request that the next Interest Period for the [Loan] [above Tranche] is [      ].

 

	
  

	
4.

	
This Selection Notice is irrevocable.

 

Yours faithfully

 

.....................................

authorised signatory for

[name of Borrowers]

 

  

  

  

 

SCHEDULE 4

Form of Transfer Certificate

 

 

To:       ABN AMRO BANK N.V. as Agent

 

	
From:

	
[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

 

Dated:

 

[                           ], [                           ]and [                            ]– USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

	
  

	
1.

	
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

	
  

	
2.

	
We refer to Clause 25.4 (Procedure for transfer):

 

	
  

	
(a)

	
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with Clause 25.4 (Procedure for transfer).

 

	
  

	
(b)

	
The proposed Transfer Date is [ ].

 

	
  

	
(c)

	
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 32.2 (Addresses) are set out in the Schedule.

 

	
  

	
3.

	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 25.3 (Limitation of responsibility of Existing Lenders).

 

	
  

	
4.

	
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

	
  

	
5.

	
This Transfer Certificate is governed by Norwegian law.

 

	
  

	
6.

	
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

 

  

  

  

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments,]

	
[Existing Lender]

	
[New Lender]

	 	 
	
By:

	
By:

 

This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [         ].

 

[Agent]

 

By:

 

  

  

  

SCHEDULE 5

Form of Compliance Certificate

 

To:       ABN AMRO BANK N.V.  as Agent

 

From:   [                                           ], [                                ]  and[],

 

Dated:

 

Dear Sirs

 

[                                ], [                                ] and [                                           ] – USD 141,000,000 Facility Agreement dated 22 July 2014 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

	
2.

	
We confirm that as of [insert date] the Guarantor has on a consolidated basis:

 

	
 

	
The Guarantor has on a consolidated basis (Clause 21.1):

 

a)       Minimum Value Adjusted Tangible Net Worth

 

	 	Requirement:	Value Adjusted Tangible Net Worth of at least USD 100,000,000, 

but the Value Adjusted Tangible Net Worth shall in any event 

minimum 25 % of the Value Adjusted Total Assets

	 	 	 
	 	Value Adjusted Tangible Net Worth*	USD................
	 	 	 
	 	Value Adjusted Total Assets*	USD................
	 	 	 
	 	In Compliance         Yes/No
	 	 	 
	*) as per enclosed calculations	 

 

 

b)       Minimum Cash

 

	 	Requirement:	

The higher of USD 20,000,000 and 6 % of the Total Interest Bearing Debt

	 	 	 
	 	Minimum Cash*	USD................/........%
	 	 	 
	 	Total Interest Bearing Debt*	USD................/........%
	 	 	 
	*) as per enclosed calculations	 
	 	 	 
	 	 	 
	 	 	 
	 	In Compliance         Yes/No 
	 	 	 

 

  

  

  

 

 

d)       Working Capital

 

	 	Requirement:	

Positive

	 	 	 
	 	Current Assets	USD................, less
	 	 	 
	 	Current Debt	USD................
	 	 	 
	 	In Compliance         Yes/No 

 

 

	
3.

	
We confirm that as of [insert date] the Borrowers have (Clause 21.2):

 

 

Working Capital

 

	 	Requirement:	

Positive

	 	 	 
	 	Current Assets	USD................, less
	 	 	 
	 	Current Debt	USD................
	 	 	 
	 	In Compliance         Yes/No 

 

	
4.

	
We confirm that no Default is continuing.

 

 

Please find enclosed a copy of our financial statements, together with updated valuation certificates in respect of the Vessels and a statement by the Borrowers’ management giving a fair opinion of the Vessels’ Market Value, the market conditions, a market view and the market outlook, as per [                 ] 20[   ].

 

 

 

Yours faithfully

 

 

	..................................... 	  ..................................... 	  .....................................
	 	 	 
	authorised signatory for	 authorised signatory for	  authorised signatory for
	   	 	 
	[                               ]	[                                          ]	[                                          ]
	 	 	 

 

  

  

  

 

 

SCHEDULE 6

Form of accession letter

 

ACCESSION LETTER

 

Dated:  [                      ]

 

 

USD 141,000,000 TERM LOAN FACILITY AGREEMENT DATED 22 JULY 2014 (THE "AGREEMENT")

 

 

	
  

	
1.

	
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning when used in this Accession Letter.

 

	
  

	
2.

	

By its signature hereto, [                                ], reg. no. [      ], incorporated under the laws of [                    ] hereby agrees to become a Borrower under the Agreement and the Security Documents with effect from the date hereof, and to be bound by the terms of the Agreement and the Security Documents as a Borrower. [                    ] hereby undertakes and agrees to sign and execute such additional Security Documents as may be required under the Agreement.

	
  

	
3.

	
By their signatures hereto, each of the Borrowers, the Guarantor, the Lenders, the Mandate Lead Arrangers, the Agent, the Security Agent and the Hedging Banks accepts the accession of the Borrower to the Agreement.

 

	
  

	
4.

	
Each of the Borrowers and the Guarantor hereby confirms, agrees and undertakes its joint and several liabilities in accordance with Clause 18 of the Agreement.

 

	
  

	
5.

	
[                     ] address is [                                           ].

 

	
  

	
6.

	

The Borrowers hereby confirm that no Default is continuing or would occur as a result of [                       ] becoming a Borrower.

 

	
  

	
7.

	

[                     ] confirm that all representations and warranties in Clause 19 (Representations) are correct as of the date hereof.

 

	
  

	
8.

	
The following amendments shall be made to the Agreement with effect from the accession of the new Borrower: [    ].

 

	
  

	
9.

	
This Accession Letter is governed by Norwegian law. Clauses 39 and 40 of the Agreement apply to this Accession Letter, and the Additional Borrower hereby appoints the process agent described in Clause 40.2 of the Agreement.

 

 

	
Borrower:

	
Guarantor:

	 	 
	
[                                   ]

	

DHT HOLDING INC.

	 	 
	
By: _____________________________________________

	
By: ______________________________________________

	 	 
	
Name: 

	
Name:

	 	 
	
Title: 

	
Title:

 

  

  

  

                                                                  

 

 

	
Lender:

	
Lender:

	 	 
	
DVB BANK SE

	

ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: _____________________________________________

	
By: ______________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Lender:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By: _____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

 

	
Mandated Lead Arranger:

	
Mandated Lead Arranger:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Mandated Lead Arranger:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By:_____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

  

  

  

 

 

	
Hedging Bank:

	
Hedging Bank:

	 	 
	
ABN AMRO BANK N.V.

	
DVB BANK SE

	  	  
	  	  
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

 

	
Hedging Bank:

	  
	 	 
	
NORDEA BANK FINLAND PLC.

	  
	  	  
	 	 
	
By: _____________________________________________

	  
	 	 
	
Name:

	  
	 	 
	
Title:

	  

 

 

	
Agent:

	
Security Agent:

	 	 
	
ABN AMRO BANK N.V.

	
ABN AMRO BANK N.V.

	  	  
	 	 
	
By: _____________________________________________

	
By: _____________________________________________

	 	 
	
Name:

	
Name:

	 	 
	
Title:

	
Title:

 

 

  

  

  

 

EXECUTION PAGE

 

 

	
Guarantor:

	  
	 	 
	
DHT HOLDING INC.

	  
	  	  
	 	 
	
By: ___/s/ Eirik Ubøe______________________________

	  
	 	 
	
Name:     

	
Eirik Ubøe

	  
	 	 
	Title:     	
CFO

	  

 

 

	
Original Lender:

	
Original Lender:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	Title:     	
Attorney-in-Fact

	Title:     	
Attorney-in-Fact

 

 

	
Original Lender:

	  
	 	 
	
NORDEA BANK NORGE ASA

	  
	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	  
	 	 
	
Name:     

	
Erland Lous

	  
	 	 
	
Title:     

	
Attorney-in-Fact

	  

 

 

	
Mandated Lead Arranger:

	
Mandated Lead Arranger:

	 	 
	
DVB BANK SE

	
ABN AMRO BANK N.V. OSLO BRANCH

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:      

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	
Title:     

	

Attorney-in-Fact

	
Title:     

	

Attorney-in-Fact

 

 

  

  

  

 

	
Mandated Lead Arranger:

	 
	 	 
	
NORDEA BANK NORGE ASA

	 
	 	 
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	 
	 	 
	
Name:     

	

Erlend Lous

	 
	 	 
	Title:     	

Attorney-in-Fact

	 

 

 

	
Hedging Bank:

	
Hedging Bank:

	 	 
	
ABN AMRO BANK N.V.

	
DVB BANK SE

	 	 
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	
Erlend Lous

	
Name:     

	
Erlend Lous

	 	 
	
Title:     

	

Attorney-in-Fact

	
Title:      

	

Attorney-in-Fact

 

 

 

	Hedging Bank: 	 
	 	 
	NORDEA BANK FINLAND PLC.	 
	  	  
	 	 
	
By: ____/s/ Erlend Lous____________________________

	  
	 	 
	
Name:     

	

Erlend Lous

	  
	 	 
	
Title:

	

Attorney-in-Fact

	  

 

 

	
Agent:

	
Security Agent:

	 	 
	
ABN AMRO BANK N.V.

	
ABN AMRO BANK N.V.

	  	  
	 	 
	
By: ___/s/ Erlend Lous_____________________________

	
By: ___/s/ Erlend Lous______________________________

	 	 
	
Name:     

	

Erlend Lous

	
Name:     

	

Erlend Lous

	 	 
	Title:     	

Attorney-in-Fact

	
Title:     

	

Attorney-in-Factex10-1.htm

Exhibit 10.1

 

 

 

SHARE PURCHASE AGREEMENT

 

 

between

 

THE VARIOUS SHAREHOLDERS OF

SAMCO SHIPHOLDING PTE. LTD.

(AS SET OUT IN SCHEDULE 1)

and

DHT HOLDINGS, INC.

Dated as of September 9, 2014

 

 

 

  

  

  

 

TABLE OF CONTENTS

Page

 

	
ARTICLE I

 

Purchase and Sale of Shares; Closing

	  	  	  
	
SECTION 1.01.

	
Purchase and Sale of the Shares

	
1

	
SECTION 1.02.

	
Purchase Price Adjustment

	
2

	
SECTION 1.03.

	
Closing Date

	
3

	
SECTION 1.04.

	
Transactions To Be Effected on the Closing Date

	
3

	  	  	  
	
ARTICLE II

 

Warranties Relating to Each Seller

	  
	
SECTION 2.01.

	
Standing and Power; Authority

	
6

	
SECTION 2.02.

	
Execution and Delivery; Enforceability

	
6

	
SECTION 2.03.

	
Powers of Attorney

	
6

	
SECTION 2.04.

	
No Conflicts; Consents

	
7

	
SECTION 2.05.

	
Litigation

	
7

	
SECTION 2.06.

	
The Seller Shares

	
7

	
SECTION 2.07.

	
Brokers

	
8

	
SECTION 2.08.

	
No Additional Representations and Warranties

	
8

	  	  	  
	
ARTICLE III

 

Warranties Relating to the Company

	  	  	  
	
SECTION 3.01.

	
Organization and Standing

	
8

	
SECTION 3.02.

	
Share Capital of the Company, the Subsidiaries and Goodwood

	
9

	
SECTION 3.03.

	
Authority

	
11

	
SECTION 3.04.

	
No Conflicts; Consents

	
11

	
SECTION 3.05.

	
Financial Statements; Internal Controls

	
12

	
SECTION 3.06.

	
No Undisclosed Liabilities

	
13

	
SECTION 3.07.

	
Vessels

	
13

	
SECTION 3.08.

	
Real Property

	
14

	
SECTION 3.09.

	
Intellectual Property

	
14

	
SECTION 3.10.

	
Contracts

	
15

	
SECTION 3.11.

	
Permits

	
17

	
SECTION 3.12.

	
Insurance

	
17

	
SECTION 3.13.

	
Tax Matters

	
18

	
SECTION 3.14.

	
Legal Proceedings

	
19

	
SECTION 3.15.

	
Employee Benefit Plans

	
19

 

 

  

i

  

 

 

	
SECTION 3.16.

	
Absence of Changes or Events

	
20

	
SECTION 3.17.

	
Compliance with Applicable Laws

	
20

	
SECTION 3.18.

	
Employee Matters

	
21

	
SECTION 3.19.

	
Transactions with Affiliates

	
21

	
SECTION 3.20.

	
Brokers

	
21

	
SECTION 3.21.

	
Environmental Matters

	
21

	
SECTION 3.22.

	
No Additional Representations and Warranties

	
22

	
SECTION 3.23.

	
General

	
22

	  	  	  
	
ARTICLE IV

 

Warranties of Purchaser

	  	  	  
	
SECTION 4.01.

	
Organization and Standing

	
23

	
SECTION 4.02.

	
Power and Authority

	
23

	
SECTION 4.03.

	
No Conflicts; Consents

	
23

	
SECTION 4.04.

	
Litigation

	
24

	
SECTION 4.05.

	
Securities Act

	
24

	
SECTION 4.06.

	
Brokers

	
24

	
SECTION 4.07.

	
Relevant Claims

	
24

	
SECTION 4.08.

	
No Additional Representations and Warranties

	
24

	  	  	  
	
ARTICLE V

 

Covenants

	  	  	  
	
SECTION 5.01.

	
Covenants Relating to Conduct of Business

	
24

	
SECTION 5.02.

	
Access to Information

	
28

	
SECTION 5.03.

	
Confidentiality

	
28

	
SECTION 5.04.

	
Reasonable Endeavors; Consents, Approvals and Filings

	
28

	
SECTION 5.05.

	
Expenses; Transfer Taxes

	
29

	
SECTION 5.06.

	
Continuing Operation of the Company and Employee Matters

	
29

	
SECTION 5.07.

	
Tax Matters

	
30

	
SECTION 5.08.

	
Publicity

	
30

	
SECTION 5.09.

	
Financing

	
30

	
SECTION 5.10.

	
Further Assurances

	
31

	
SECTION 5.11.

	
Company Assistance with Financing

	
31

	  	  	  
	
ARTICLE VI

 

Conditions Precedent

	  	  	  
	
SECTION 6.01.

	
Conditions to Each Party’s Obligation

	
31

	
SECTION 6.02.

	
Conditions to Obligation of Purchaser

	
31

	
SECTION 6.03.

	
Conditions to Obligation of Sellers

	
32

	
SECTION 6.04.

	
Frustration of Closing Conditions

	
33

 

 

 

  

ii

  

 

 

	
ARTICLE VII

 

Termination, Amendment and Waiver

	  	  	  
	
SECTION 7.01.

	
Termination

	
33

	
SECTION 7.02.

	
Effect of Termination

	
34

	
SECTION 7.03.

	
Amendment

	
34

	
SECTION 7.04.

	
Extension; Waiver

	
34

	  	  	  
	
ARTICLE VIII

 

Relevant Claims

	  	  	  
	
SECTION 8.01.

	
Limitation on Sellers Liability

	
35

	
SECTION 8.02.

	
Calculation of Value of Relevant Claim

	
36

	
SECTION 8.03.

	
Expiry of Sellers Liability for Relevant Claims

	
37

	
SECTION 8.04.

	
Procedures

	
37

	
SECTION 8.05.

	
Tax Allocation

	
39

	
SECTION 8.06.

	
No Liability of Company Directors and Employees

	
40

	  	  	  
	
ARTICLE IX

 

General Provisions

	  	  	  
	
SECTION 9.01.

	
Assignment

	
40

	
SECTION 9.02.

	
No Third-Party Beneficiaries

	
41

	
SECTION 9.03.

	
Notices

	
41

	
SECTION 9.04.

	
Interpretation; Exhibits and Schedules; Certain Definitions

	
42

	
SECTION 9.05.

	
Consents and Approvals

	
48

	
SECTION 9.06.

	
Counterparts

	
48

	
SECTION 9.07.

	
Entire Agreement

	
48

	
SECTION 9.08.

	
Severability

	
48

	
SECTION 9.09.

	
Enforcement; Arbitration

	
48

	
SECTION 9.10.

	
Governing Law

	
50

	
SECTION 9.11.

	
Waiver of Jury Trial

	
50

	
SECTION 9.12.

	
Language

	
50

 

  

iii

  

 

Annexes, Schedules and Exhibits

	
INDEX OF DEFINED TERMS

	  	  
	
SCHEDULE 1

	
List of Sellers

	
SCHEDULE 2

	
Company, Subsidiaries and Vessels

	
SCHEDULE 3

	
Actual Equity Amount Statement

	  	  
	
EXHIBIT A

	
Form of Escrow Agreement

 

 

  

iv

  

 

SHARE PURCHASE AGREEMENT (this “Agreement”), dated as of September 9, 2014, between the VARIOUS SELLING SHAREHOLDERS (whose names are set out in Schedule 1, collectively, the “Sellers” and each a “Seller”) and DHT HOLDINGS, INC. (“Purchaser”).

RECITALS

Samco Shipholding Pte. Ltd., a private company limited by shares incorporated under the laws of the Republic of Singapore (“Company”), has an issued and paid-up share capital of $51,626,316 comprising 5,100 ordinary shares at the date of this Agreement (the “Shares”).  The Shares are owned by Sellers in the amounts set forth opposite such Seller’s name in Schedule 1 (with respect to each Seller, as applicable, the “Seller Shares”).

Purchaser desires to purchase from each Seller, and each Seller desires to sell to Purchaser, the Seller Shares.

On or prior to the date of this Agreement, each POA Seller has executed and delivered a valid power of attorney in the form previously agreed between Sellers and Purchaser (each a “Power of Attorney”) appointing each of Samaual Abdullah T Bakhsh and Bengt Axel Olof Hermelin (each a “POA Attorney”) as attorney with authority to act, in the name of such POA Seller and on such POA Seller’s behalf, in relation to this Agreement and the transactions contemplated hereby, including to sign, execute, deliver and/or issue this Agreement in the name of such POA Seller and on such POA Seller’s behalf.

Accordingly, the parties hereby agree as follows:

 

ARTICLE I

Purchase and Sale of Shares; Closing

SECTION 1.01.      Purchase and Sale of the Shares.

(a)          On the terms and subject to the conditions of this Agreement, Sellers shall sell to Purchaser, and Purchaser shall purchase from Sellers, the Shares.  The Sellers irrevocably waive any right of pre-emption conferred on each of them by the articles of association of the Company or otherwise over the Shares.

(b)          Purchaser shall not be obliged to purchase, and the Sellers shall not be obliged to sell, any of the Seller Shares unless the sale and purchase of all of the Shares is completed simultaneously.

(c)          The aggregate consideration payable by Purchaser for the Seller Shares shall be:

(i)             the payment by Purchaser to the Sellers at the Closing of an aggregate amount equal to $317,005,000 (the “Initial Purchase Price”), less the Escrow Amount pending final determination of the Actual Equity Amount in accordance with Section 1.02 and Schedule 3; and

 

 

  

  

  

 

 

(ii)            such further payment or adjustment payment as is provided for under Section 1.02, made by Purchaser to the Sellers or by the Sellers to Purchaser (as the case may be).

 

The Initial Purchase Price, as adjusted pursuant to Section 1.01(c)(ii) and Section 1.02, is referred to as the “Purchase Price”.  The Purchase Price shall be allocated among Sellers in their Respective Percentages as set out opposite their respective names in Schedule 1.  The sale and purchase of the Shares is referred to in this Agreement as the “Acquisition”.

SECTION 1.02.      Purchase Price Adjustment.

(a)          If the Actual Equity Amount is:

(i)            a sum which is greater than the Provisional Equity Amount, Purchaser shall pay to the Sellers in accordance with Section 1.02(b) a sum equal to the difference and Purchaser and the Sellers Representative shall jointly instruct the Escrow Agent to pay to the Sellers, from the Escrow Fund and in accordance with Section 1.02(b), the entire amount of the Escrow Fund (including such interest, if any, that has accrued on such sum); or

(ii)           a sum which is less than the Provisional Equity Amount:

	
  

	
(1)

	
and in the event the difference is less than the Escrow Amount, Purchaser and the Sellers Representative shall jointly instruct the Escrow Agent to pay: (A) to Purchaser, from the Escrow Fund and in accordance with Section 1.02(b), a sum equal to such difference (together with such interest, if any, that has accrued on such sum); and (B) to the Sellers, from the Escrow Fund and in accordance with Section 1.02(b), the balance of the Escrow Fund (together with such interest, if any, that has accrued on such sum);

	
  

	
(2)

	
and in the event the difference exceeds the Escrow Amount, Purchaser and the Sellers Representative shall jointly instruct the Escrow Agent to pay to Purchaser, from the Escrow Fund and in accordance with Section 1.02(b), the entire amount of the Escrow Fund (together with such interest, if any, that has accrued on such sum) and Sellers shall pay to Purchaser in accordance with Section 1.02(b) a sum equal to such difference minus the Escrow Amount; or

(iii)           equal to the Provisional Equity Amount, Purchaser and the Sellers Representative shall jointly instruct the Escrow Agent to pay to the Sellers, from the Escrow Fund and in accordance with Section 1.02(b), a sum equal to the Escrow Amount (together with such interest, if any, that has accrued on such sum).

 

 

  

2

  

 

(b)          Any sum payable under Section 1.02(a) shall be paid:

(i)            within 14 Business Days after the date of the Actual Equity Amount being finally determined pursuant to the procedures set forth in Schedule 3; and

(ii)           by electronic funds transfer for same day value to:

	
  

	
(1)

	
(where such sum is payable to the Sellers) to the bank accounts designated by the Sellers Representative in the Escrow Account release instructions; or

	
  

	
(2)

	
(where such sum is payable to Purchaser) the Purchaser’s bank account designated in writing by Purchaser (such designation to be made at least two Business Days prior to the anticipated date of such payment).

(c)           For the purposes of determining the Actual Equity Amount, the provisions of Schedule 3 shall apply.

SECTION 1.03.      Closing Date.  The closing of the Acquisition (the “Closing”) shall take place on the second Business Day following the satisfaction (or, to the extent permitted by Applicable Law, the waiver by all the parties) of the conditions set forth in Section 6.01 and the satisfaction (or, to the extent permitted by Applicable Law, the waiver by the party entitled to the benefit thereof) of the conditions set forth in Sections 6.02 and 6.03, at such time and place as shall be agreed between the Sellers and Purchaser.  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

SECTION 1.04.      Transactions To Be Effected on the Closing Date.

(a)          At the Closing, the Sellers shall deliver to Purchaser (or, in the case of the items described in Section 1.04(a)(iv) and 1.04(a)(v), make available and resident at the office of the Company’s corporate secretary, where such items relate to the Company, and make available and resident at the relevant Subsidiary’s registered office, where such items relate to any Subsidiary, or, in the case of the items described in Section 1.04(a)(v), make available and resident at the Company’s premises at 20 Science Park Road, Singapore):

(i)             a separate share transfer form from each Seller in respect of such Sellers’ Seller Shares duly executed and completed in favor of Purchaser, together with copies of the powers of attorney or other authority under which any such transfers have been executed, where required;

(ii)            the original share certificates representing the Seller Shares (or an express indemnity in a form satisfactory to the Purchaser in the case of any certificate found to be missing);

 

 

  

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(iii)           duly completed working sheets computing the net asset value per share in the form prescribed by the Stamp Duty Branch of the Inland Revenue Authority of Singapore and signed by a director or the secretary of the Company in respect of the share transfers referred to in Section 1.04(a)(i);

(iv)           in respect of the Company and each of the Subsidiaries, all its statutory and minute books (each duly written up to the date immediately prior to the Closing Date), its common seal (if any), certificate of incorporation and any certificate on change of name and the share certificates in respect of the shares held in the Non-Vessel Subsidiaries and the Goodwood Shares;

(v)            in respect of the Company and each of the Subsidiaries, all other books and records of the Company and its Subsidiaries, including all financial, accounting and banking books and records of the Company and each Subsidiary;

(vi)           certificates of good standing dated within 5 Business Days of Closing for:

(1)          the Company from the Singapore accounting and corporate regulatory authority; and

(2)          each of the Subsidiaries from the Cayman Islands general registry of companies;

(vii)         letters of resignation (in a form agreed between the Sellers and the Purchaser) duly executed by Samaual Abdullah Bakhsh, Omnia Abdullah Bakhsh and Loke Mun-Tze Jacqueline Joelle, resigning from their offices as directors of the Company as of Closing, acknowledging that they have no claims against the Company;

(viii)        the New Service Contracts duly executed by the Existing Employee counterparty and the Company;

(ix)          certified copies of the resolutions of the board of directors of the Company resolving that:

	
  

	
(1)

	
the transfers mentioned in Section 1.04(a)(i) be approved and registered by the Company (subject only to their being duly stamped) and a definitive share certificate in the name of Purchaser for all the Shares be issued and delivered to Purchaser;

	
  

	
(2)

	
the persons named in Section 1.04(c) be validly appointed as the directors of the Company as of the Closing;

	
  

	
(3)

	
the resignations of the directors of the Company referred to in Section 1.04(a)(vii) above be accepted so as to take effect as of the Closing; and

 

 

  

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(4)

	
the New Service Contracts be approved by the Company and that the execution of the same on behalf of the Company be authorized.

(b)          At the Closing, Purchaser shall:

(i)             deliver copies of the resolutions or approvals of the board of directors of Purchaser authorizing the purchase by Purchaser of the Seller Shares and the other transactions contemplated by this Agreement and the execution of the relevant documents relating to the Acquisition;

(ii)            pay:

(1)          to each Seller, by wire transfer of immediately available funds for value on the Closing Date, to a bank account (or bank accounts) designated in writing by such Seller (such designation to be made at least two Business Days prior to the Closing Date), an amount in cash equal to the amount set out against such Seller’s name in column (D) of the table in Schedule 1; and

(2)          into the Escrow Fund in accordance with the Escrow Agreement, a sum equal to the Escrow Amount;

(iii)           procure that the Company submits all necessary filings and makes all necessary entries in the corporate records of the Company to effect and record the transactions contemplated by this Agreement.

(c)          With effect from Closing, Svein Moxnes Harfjeld and Trygve P. Munthe shall be appointed as directors of the Company until the earlier of their resignation or removal or until their respective successors are duly elected and qualified in accordance with Applicable Law and the Company Articles, as the case may be.

(d)          At the Closing, Purchaser and Bengt Axel Olof Hermelin, serving as trustee for each of the Sellers (the “Sellers Representative”), shall enter into an escrow agreement substantially in the form attached hereto as Exhibit A (the “Escrow Agreement”) with an agent to be selected by Purchaser and the Sellers (the “Escrow Agent”), and an amount equal to $5,000,000 (the “Escrow Amount”) shall be deposited with the Escrow Agent by Purchaser in accordance with Section 1.04(b)(ii)(2) and pursuant to the terms of the Escrow Agreement, which amount shall be held by the Escrow Agent in an escrow fund (the “Escrow Fund”) pending final determination of the Actual Equity Amount in accordance with Section 1.02 and Schedule 3. The fees and expenses of the Escrow Agent shall be borne equally between Purchaser (on the one hand) and the Sellers (on the other hand) in accordance with the Escrow Agreement.

Following the final determination of the Actual Equity Amount in accordance with the provisions of Schedule 3, the Sellers Representative and Purchaser undertake to cooperate to issue a release instruction in accordance with the terms of the Escrow Agreement, to the Escrow Agent within 10 Business Days after the date of the Actual Equity Amount being finally determined pursuant to the procedures set forth in Schedule 3, directing the Escrow Agent to release and pay the Escrow Amount from the Escrow Fund in accordance with the terms of this Agreement.

 

 

  

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Each of the Sellers hereby agrees and acknowledges that they have each appointed Bengt Hermelin as the “Sellers Representative” for the purposes of the Escrow Agreement and they approve and instruct him to open up the Escrow Account in his sole name (and that of the Purchaser) for the purposes required by the Escrow Agreement. Furthermore, the Sellers acknowledge and agree that the Escrow Amount shall be paid into the Escrow Account, and that the Escrow Account shall be operated in accordance with the Escrow Agreement, including that the fees owed to the Escrow Agent will be borne equally between Purchaser (on the one hand) and the Sellers (on the other hand) in accordance with the Escrow Agreement.  The Sellers also acknowledge that Bengt Hermelin alone shall be the account holder and signatory to the Escrow Account and Bengt Hermelin is authorised on the Sellers’ behalf to handle any amounts released from the Escrow Account in accordance with this Agreement and the Escrow Agreement, and that he alone shall be responsible for remitting such amounts in the Relevant Percentages to the Sellers after their release.

 

ARTICLE II

Warranties Relating to Each Seller

 

Each Seller hereby warrants to Purchaser, severally and not jointly, as follows:

SECTION 2.01.      Standing and Power; Authority.  Such Seller is a natural person and has full power and authority and is competent to execute this Agreement and to consummate the Acquisition and the other transactions contemplated hereby.  The execution and delivery by such Seller of this Agreement and the consummation by such Seller of the Acquisition and the other transactions contemplated hereby have been duly authorized by all necessary action on the part of such Seller.

SECTION 2.02.      Execution and Delivery; Enforceability.  Such Seller has duly executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

SECTION 2.03.      Powers of Attorney.  (a)  The Power of Attorney of each POA Seller has been duly authorized, executed and delivered by such POA Seller and constitutes such POA Seller’s legal, valid and binding obligation, enforceable against such POA Seller in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

 

 

  

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(b)           Each POA Attorney is a natural person, has been duly authorized by each POA Seller and has full power and authority and is competent to execute this Agreement and to consummate and cause the consummation of the Acquisition and the other transactions contemplated hereby, in each case in the name of such POA Seller and on such POA Seller’s behalf.

(c)           The Sellers have made available to Purchaser true and complete copies of each Power of Attorney.

SECTION 2.04.      No Conflicts; Consents.  (a)  The execution and delivery by such Seller of this Agreement does not and the consummation of the Acquisition and the other transactions contemplated hereby and compliance by such Seller with the terms hereof and thereof will not, (i) result in the creation of any Lien upon any of such Seller’s Shares, (ii) conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of such Seller (other than such Seller’s Shares) under, any provision of any Contract to which such Seller is a party or by which any of its properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 2.04(b), conflict with, or result in any violation of any provision of, any judgment, order or decree (“Judgment”) or Applicable Law, in each case, applicable to such Seller or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on the ability of such Seller to perform its obligations under this Agreement or a material adverse effect on the ability of such Seller to consummate the Acquisition and the other transactions contemplated hereby (any such material adverse effect, a “Seller Material Adverse Effect”).

(b)           No material consent, approval, waiver, license, permit, order or authorization (“Consent”) of or from, or registration, declaration, notice or filing made to or with, any Governmental Entity is required to be obtained or made by or with respect to such Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the Acquisition or the other transactions contemplated hereby, other than (i) the Regulatory Approvals and (ii) compliance with and filings under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and the rules and regulations of any securities exchange.

SECTION 2.05.      Litigation.  As of the date of this Agreement (a) there is no material Proceeding pending or, to the knowledge of such Seller, threatened against such Seller and (b) to the knowledge of such Seller, such Seller is not a party to any Judgment or settlement agreement of or with a Governmental Entity that, in any case, individually or in the aggregate, has had or would reasonably be expected to have a Seller Material Adverse Effect.

SECTION 2.06.      The Seller Shares.  Such Seller has good and valid title to the Seller Shares, free and clear of all Liens.  Assuming Purchaser has the requisite power and authority to be the lawful owner of the Seller Shares, upon:  (i) delivery to Purchaser at the Closing of the items set forth in Section 1.04(a); (ii) the items referred to in Section 1.04(a)(i) being duly stamped by the Purchaser and then registered with and by the Company; and (iii) such Seller’s receipt of the amount set out against such Seller’s name in column (D) of the table in Schedule 1, good and valid title to the Seller Shares will pass to Purchaser, free and clear of any Liens, other than those arising from acts of Purchaser or its affiliates.  Other than this Agreement, the Seller Shares are not subject to any voting trust agreement, arrangement or other Contract, including any Contract restricting or otherwise relating to the voting, dividend rights or disposition of the Seller Shares.

SECTION 2.07.      Brokers.  Other than the Poten Arrangements (for which the Sellers shall be fully and solely responsible), no broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby based upon arrangements made by or on behalf of such Seller.

SECTION 2.08.      No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES MADE BY SELLERS IN THIS AGREEMENT, SELLERS AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SHARES, THE COMPANY, THE SUBSIDIARIES OR ANY OTHER MATTER.

 

 

  

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ARTICLE III

Warranties Relating to the Company

Sellers, severally and not jointly, hereby warrant to Purchaser that the following warranties in this Article III (the “Sellers Warranties”) are true and accurate at the date of this Agreement, except for the matters set forth in the Company Disclosure Letter which, subject to Section 3.23(c) and the provisions of the Company Disclosure Letter, qualify the Sellers Warranties:

SECTION 3.01.      Organization and Standing.   (a)  Each of the Company and the Subsidiaries and Goodwood is a corporation or other registered business entity duly incorporated, organized or registered (as the case may be), validly existing and in good standing (to the extent the concept is recognized in the applicable jurisdiction) under the laws of the jurisdiction of its organization and has full power and authority to enable it to own the Vessels and to enable it to own, lease or otherwise hold its other properties and assets and to conduct its businesses as presently conducted.  The term “Subsidiary” means each company or other entity listed in Part B of Schedule 2.

(b)           The Company has made available to Purchaser true and complete copies of (i) the memorandum of association of the Company, as amended to the date of this Agreement (the “Company Memorandum of Association”), and the articles of association of the Company, as amended to the date of this Agreement (the “Company Articles”), and (ii) the comparable governing instruments, each as amended to the date of this Agreement, of each Subsidiary and Goodwood.

 

 

  

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SECTION 3.02.      Share Capital of the Company, the Subsidiaries and Goodwood.  (a)  The Seller Shares:

(i)             are ordinary shares in the capital of the Company (“Ordinary Shares”) and together constitute the entire issued and allotted shares of the Company;

(ii)            are beneficially and legally owned by the Sellers in the proportions set out in Schedule 1 and the Sellers have the right to exercise all voting and other rights over such Seller Shares;

(iii)           are the only class of share capital or other equity securities of the Company issued, reserved for issuance, allotted or outstanding;

(iv)           are duly authorized, validly issued and allotted and fully paid (or credited as fully paid) and, except as contemplated by this Agreement, are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Singapore Companies Act, the Company Memorandum of Association or the Company Articles or any Contract to which the Company is a party or otherwise bound; and

(v)            have not been and are not listed on any stock exchange or regulated market.

(b)          There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Ordinary Shares may vote (“Voting Company Debt”).

(c)          Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” share rights, share appreciation rights, share-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Subsidiary is a party or by which it is bound (i) obligating the Company or any Subsidiary to issue or allot, deliver or sell, or cause to be issued, delivered or sold, additional Ordinary Shares or other equity interests in, or any security convertible or exercisable for or exchangeable into any share capital or other equity interest in, the Company, any Subsidiary or any Voting Company Debt or (ii) obligating the Company or any Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking.  As of the date of this Agreement, there are not any outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Ordinary Shares or other equity interests in the Company or any Subsidiary.

(d)          Schedule 2, Part B sets forth for each Subsidiary a description of its authorized share capital (including classes and authorized number of shares, where applicable), the number of shares issued and allotted in each class of share capital and the legal and beneficial owners of such issued and allotted shares.  The shares held by the Company in each Subsidiary:

 

 

  

9

  

 

(i)             have been duly authorized and validly issued and allotted;

(ii)            are fully paid;

(iii)           comprise the whole of the issued and allotted shares in each Subsidiary; and

(iv)           are owned directly or indirectly by the Company free and clear of all Liens (other than Liens pursuant to the Company Debt Facilities).

(e)           Schedule 2, Part C sets forth for Goodwood a description of its share capital (including classes and number of shares, where applicable), the number of shares issued and allotted in each class of share capital and the legal (and in the case of the shares held by the Company only, also the beneficial) owners of such issued and allotted shares.  The Goodwood Shares:

(i)             have been duly authorized and validly issued and allotted;

(ii)            are fully paid;

(iii)           in the aggregate, represent 50% of the whole of the issued and allotted shares of Goodwood; and

(iv)           are owned directly or indirectly by the Company free and clear of all Liens (other than Liens pursuant to the Company Debt Facilities).

(f)          The shares of the Subsidiaries and the Goodwood Shares are free of any restriction on the right to vote, sell or otherwise dispose of such share capital (other than such restrictions pursuant to the Company Debt Facilities and, in the case of the Goodwood Shares, the Goodwood JV).

(g)          Except as set forth above, to the knowledge of the Company there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” share rights, share appreciation rights, share-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Goodwood is a party or by which Goodwood is bound (i) obligating Goodwood to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares or other equity interests in, or any security convertible or exercisable for or exchangeable into any share capital of or other equity interest in, Goodwood or (ii) obligating Goodwood to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking.  As of the date of this Agreement, to the knowledge of the Company there are not any outstanding contractual obligations of Goodwood to repurchase, redeem or otherwise acquire any shares of or other equity interests in Goodwood.

(h)          Except for its interests in the Subsidiaries and the Goodwood Shares, the Company does not as of the date of this Agreement own, directly or indirectly, any share capital, capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person and does not have any branch, division or establishment outside of Singapore or the Cayman Islands.

 

 

  

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(i)           The registers, statutory books, books of account and other records of each of the Company and the Subsidiaries which are required to be maintained under Applicable Law:

(i)             are up to date in all material respects;

(ii)            are maintained in all material respects in accordance with Applicable Law on a proper and consistent basis;

(iii)           contain materially complete records of all matters required to be dealt with in such books and records; and

(iv)           where required, have attached to them copies of all such resolutions (including any agreements attached to or incorporated in such resolutions) as are required by Applicable Law to be delivered to the Registrar of Companies of Singapore (where applicable) and all other resolutions passed by the Company or such Subsidiary or any class of members or shareholders thereof, other than resolutions relating to ordinary business at any annual general meeting.

(j)           All registers, books and records referred to in Section 3.02(i) and all other material documents (including copies of all material Contracts to which the Company or any Subsidiary is a party) which are the property of the Company or the Subsidiaries are in the possession (or under the control through appointed corporate secretarial service providers) of the Company or such Subsidiary.

(k)          All material accounts, documents and returns required by Applicable Law to be delivered by the Company or any Subsidiary or made to the Registrar of Companies of Singapore (where applicable) have been delivered or made on a timely basis.

(l)           Each of the Non-Vessel Subsidiaries has no employees and, except as is necessary in the ordinary course of business to effect the wind down of their respective operations for the period during which such companies owned and operated vessels, the Non-Vessel Subsidiaries are not involved in any activities and have not traded or incurred any new obligations or new liabilities whatsoever since they ceased to own and operate vessels.

(m)         Since the Balance Sheet Date, the Company has not declared or paid any dividend or otherwise distributed any assets to the holders of its share capital.

SECTION 3.03.      Authority.  The Company has all requisite corporate or organizational power and authority to perform its obligations under this Agreement or the other transactions contemplated hereby.  The obligations of the Company hereunder and the other transactions contemplated hereby have been duly authorized by all necessary corporate or other similar organizational action on the part of the Company, its board of directors and its shareholders.

SECTION 3.04.      No Conflicts; Consents.  (a)  The consummation of the Acquisition and the other transactions contemplated hereby and compliance by the Company with the terms hereof will not (i) conflict with, or result in any violation of any provision of, the Company Memorandum of Association or the Company Articles, (ii) conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary or, to the knowledge of the Company, Goodwood under, any provision of any Contract to which the Company or any Subsidiary or Goodwood is a party or by which any of their respective assets is bound or (iii) subject to the filings and other matters referred to in Section 3.04(b), conflict with, or result in any violation of any provision of, any Judgment or Applicable Law, in each case, applicable to the Company or any Subsidiary or, to the knowledge of the Company, Goodwood or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

 

 

  

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(b)          No material Consent of or from, or registration, declaration, notice or filing made to or with, any Governmental Entity is required to be obtained or made by or with respect to the Company or any Subsidiary or, to the knowledge of the Company, Goodwood in connection with the performance of this Agreement or the consummation of the Acquisition or the other transactions contemplated hereby, other than (i) the Regulatory Approvals and (ii) compliance with and filings under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and the rules and regulations of any securities exchange.

SECTION 3.05.      Financial Statements; Internal Controls.  (a)  The Company has made available to Purchaser true, complete and correct copies of the audited consolidated financial statements of the Company and the Subsidiaries as of and for the years ended December 31, 2011, December 31, 2012 and December 31, 2013 (the most recent such date, the “Balance Sheet Date”), together with the report of the independent auditor of the Company thereon, including, in each case, a balance sheet and statements of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity and related notes (the “Audited Financial Statements”).

(b)          The Audited Financial Statements (i) have been prepared in accordance with SFRS, applied on a consistent basis (except as may be indicated in the notes thereto), and (ii) give a true and fair view of the financial position, results of operations and cash flows of the Company and the Subsidiaries on a consolidated basis as of and for the respective periods indicated.

(c)          The Company has made available to Purchaser true, complete and correct copies of the unaudited consolidated financial statements of the Company and the Subsidiaries as of and for the quarter ended June 30, 2014, including a balance sheet and statements of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity (the “Unaudited Financial Statements” and, together with the Audited Financial Statements, the “Financial Statements”).

(d)          The Unaudited Financial Statements (i) have been prepared in accordance with the same accounting policies and principles as those adopted in preparing the Company’s management accounts for the preceding three years and, for those items included, such items have been calculated in a manner consistent with SFRS, and (ii) present fairly in all material respects the assets, liabilities, income and cash flows of the Company and the Subsidiaries on a consolidated basis as of and for the periods indicated.

 

 

  

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(e)          The Company has made available to Purchaser true, complete and correct copies of (i) the audited consolidated financial statements of Goodwood as of and for the year ended December 31, 2013, together with the report of the independent auditor of Goodwood thereon, including a balance sheet and statements of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity and related notes (the “Goodwood Audited Financial Statements”) and (ii) the unaudited consolidated management accounts of Goodwood as of and for the quarter ended March 31, 2014 (the “Goodwood Unaudited Management Accounts”).

(f)           To the knowledge of the Company, the Goodwood Unaudited Management Accounts have been prepared in accordance with the same accounting policies and principles as those adopted by Goodwood in preparing its management accounts for the preceding two years and, for those items included, such items have been calculated in a manner consistent with SFRS.

(g)          The Company has devised and maintained systems of internal accounting controls with respect to its business sufficient to provide reasonable assurances that transactions are recorded as necessary to permit the preparation of financial statements in conformity with SFRS.

SECTION 3.06.      No Undisclosed Liabilities.  (a)  As of the date of this Agreement, none of the Company or the Subsidiaries has any material Liabilities, except for (i) Liabilities that are reflected, disclosed or reserved against in the audited consolidated balance sheet as of the Balance Sheet Date or in the notes thereto (the “Year End Balance Sheet”) or the Unaudited Financial Statements or (ii) Liabilities that have been incurred since the date of the Unaudited Financial Statements in the ordinary course of business consistent with past and industry practice.

(b)          As of the date of this Agreement, the total amount outstanding under the Company Debt Facilities (other than under any agreement relating to any interest rate swap, derivative or hedging facility or transaction), on a consolidated basis, including accrued but unpaid interest, premium or penalty and other related amounts, is $323,250,000 or less.  Other than under the Company Debt Facilities, the Company and the Subsidiaries have no indebtedness for any borrowed money (or guarantees or similar obligations or understandings in respect of indebtedness for borrowed money of another person) as of the date of this Agreement.

SECTION 3.07.      Vessels.  (a) The Company or a Subsidiary has good and valid title to the Vessels in each case free and clear of all Liens, except (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, (ii) Liens for Taxes that are not due and payable or that may thereafter be paid without penalty, (iii) Liens (including Liens pursuant to the Company Debt Facilities) that secure obligations that are reflected as Liabilities on the Year End Balance Sheet or the existence of which is referred to in the notes to the Year End Balance Sheet or that are reflected as Liabilities in the Unaudited Financial Statements and (iv) other imperfections of title or encumbrances, if any, that, individually or in the aggregate, do not materially impair, and would not reasonably be expected materially to impair, the continued use and operation of the Vessels in the conduct of the business of the Company and the Subsidiaries as presently conducted (the Liens described above are referred to collectively as “Permitted Liens”).

 

 

  

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(b)           The information set out in Part D of Schedule 2 relating to the description of each Vessel, including its name, year built, owner, the country of its registration (flag), capacity (dwt), its classification society and shipyard of construction is complete and accurate in all material respects.  Each Vessel (i) is duly registered under the flag of the Republic of the Marshall Islands or the Republic of France (Registre International Français) (or both), as applicable, (ii) is seaworthy and in good operating condition (fair wear and tear excepted), (iii) has all national and international operating and trading certificates and endorsements, each valid and unextended, which are required for the operation of such Vessel in the trades and geographic areas in which it is operated, (iv)  has been classed by a classification society that is a member of the International Association of Classification Societies and (v) is fully in class with no outstanding material recommendations or notations.  To the knowledge of the Company: (A) no event has occurred and no condition exists that would cause such Vessel’s class to be suspended or withdrawn; and (B) all events and conditions which are required to be reported as to class have been disclosed and reported to such Vessel’s classification society.

SECTION 3.08.      Real Property.  Neither the Company, nor any of the Subsidiaries, owns beneficially or legally any real property.  Except for the Singapore Properties, neither the Company nor any Subsidiary leases or has any other interest in any real property.  True and complete copies of the leases with respect to the Singapore Properties are contained in Section 3.08 of the Disclosure Bundle.

SECTION 3.09.      Intellectual Property.

(a)           Neither the Company nor any Subsidiary owns any material Intellectual Property, other than unregistered Intellectual Property that, individually and in the aggregate, are not material to the conduct of the business of the Company and the Subsidiaries as presently conducted.

(b)           Since January 1, 2012, none of Sellers, the Company or the Subsidiaries has received any written communication from any person asserting any ownership interest in any Intellectual Property used by the Company.  To the knowledge of the Company, the conduct of the business of the Company and the Subsidiaries as presently conducted does not violate, conflict with or infringe in any material respect the Intellectual Property of any other person, except for such violations, conflicts or infringements that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(c)           To the knowledge of the Company, since January 1, 2012, there have been no material (i)  security breaches of any information technology systems used in connection with the business of the Company or any of the Subsidiaries and (ii) disruptions in the information technology systems of the Company or any of the Subsidiaries that adversely affected in any material respect the business of the Company or any of the Subsidiaries.

 

 

  

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SECTION 3.10.      Contracts.  (a)  Section 3.10 of the Company Disclosure Letter lists each of the following Contracts which the Company or any Subsidiary, as of the date of this Agreement, is a party to or bound by:

(i)             any Contract (other than any Contract solely between the Company and any of its Subsidiaries) relating to outstanding indebtedness for borrowed money pursuant to which the Company or any Subsidiary has an outstanding principal amount in excess of $250,000;

(ii)            any Contract relating to a security interest imposed on any Vessel or other asset or property of the Company or any of its Subsidiaries, other than Permitted Liens;

(iii)           with respect to any joint venture, partnership or other similar agreement or arrangement with a third party, any Contract that relates to the formation, creation, operation, management or control of such joint venture, partnership or similar agreement or arrangement;

(iv)           any Contract that involves or would reasonably be expected to involve aggregate payments by or to the Company or any Subsidiary in excess of $250,000 in any twelve-month period;

(v)            any Contract that (A) would limit the freedom of the Company or any Subsidiary to compete in any line of business or with any person or in any area after the Closing, (B) contains exclusivity obligations or restrictions that would be binding on the Company or any Subsidiary after the Closing or (C) provides for a “most favored nations” pricing status for any party thereto;

(vi)           any Contract relating to any material interest rate, derivatives or hedging transaction;

(vii)          any Contract with any supplier of or for the furnishing of services to the Company or any of its Subsidiaries involving consideration of more than $250,000 over its remaining term (including any automatic extensions thereto);

(viii)         any ship management agreement, contract of affreightment, financial lease (including any sale/leaseback agreement or similar arrangement) or charter (time, bareboat or otherwise) with respect to any Vessel, and Section 3.10(a)(viii) of the Company Disclosure Letter sets forth the classification of each such charter as time, bareboat or other;

(ix)            any Contract (including any Contract including an option) for or relating to the purchase or sale of any Vessel or other vessel (other than any such Contract under which the Company and the Subsidiaries have no continuing obligations, liabilities, rights or options);

(x)             any Contract under which the Company or any Subsidiary has directly or indirectly guaranteed liabilities or obligations of any person (in each case other than endorsements for the purpose of collection in the ordinary course of business);

 

 

  

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(xi)            any Contract that prohibits the payment of dividends or distributions in respect of the share capital of the Company or any Subsidiary, prohibits the pledging of the share capital of the Company or any Subsidiary or prohibits the issuance of any guarantee by the Company or any Subsidiary;

(xii)           any effective power of attorney granted by the Company or any of its Subsidiaries other than those granted to any existing director of the Company or any existing director of a Subsidiary;

(xiii)          any agreement under which the Company or any Subsidiary provided loans or advanced money to any other person (other than intercompany indebtedness or arrangements); and

(xiv)          any Contract between the Company or any Subsidiary, on the one hand, and any current or former director, officer, employee, independent contractor or consultant of the Company or any Subsidiary, on the other hand, including any Contract that contains restrictive covenants prohibiting such person from taking certain actions, including non-competition, non-solicitation, no-hire, non-disparagement or non-disclosure restrictions but not including any Company Benefit Plan, in each case under which there continues to be any obligation by any party to the other as of the date of this Agreement.

(b)           As of the date of this Agreement, each Contract required to be listed in Section 3.10 of the Company Disclosure Letter (each, a “Listed Contract”) is a valid and binding agreement of the Company or Subsidiary party thereto and, to the knowledge of the Company, any other party thereto and is in full force and effect, except for such failures to be valid, binding or in full force and effect that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  To the knowledge of the Company, the Company or the applicable Subsidiary has performed all material obligations required to be performed by it to date under the Listed Contracts, and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to the knowledge of the Company, no other party to any Listed Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, except for such noncompliance, breaches and defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  Without limiting the generality of the foregoing, to the knowledge of the Company, the Company or the applicable Subsidiary has performed all material obligations required to be performed by it to date under the Company Debt Facilities, and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder.

(c)           None of Sellers, the Company or the Subsidiaries has received any notice of the intention of any party to terminate any Listed Contract.

 

 

  

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(d)           Complete and correct copies of each Listed Contract, together with all written modifications and amendments thereto, have been made available to Purchaser.

SECTION 3.11.      Permits.

(a)           The Company and the Subsidiaries hold, own or possess all licenses, permits, certificates, approvals, authorizations, consents, registrations, exemptions and waivers from Governmental Entities or pursuant to any Maritime Guideline (collectively, “Permits”) necessary to enable them to own the Vessels and to enable them to own, lease or otherwise hold their other properties and assets and for the lawful conduct of their respective businesses as conducted on the date of this Agreement other than such Permits the lack of which, individually or in the aggregate, would not have a Company Material Adverse Effect.

(b)           To the knowledge of the Company, the Company and the Subsidiaries are in material compliance with all of the terms and requirements of each Permit.

(c)           Since January 1, 2012, none of Sellers, the Company or the Subsidiaries has received written notice from any Governmental Entity (including any written notice, warning or allegation from any Governmental Entity regarding deficiencies in compliance with any Applicable Law or Maritime Guideline) of any suit, action or proceeding (a “Proceeding”) relating to the revocation, suspension or termination of, or material modification to, any Permits, in each case other than any such item that has been cured or otherwise resolved to the satisfaction of such Governmental Entity or that is no longer being pursued by such Governmental Entity.

(d)           Subject to compliance with the matters set forth in Sections 2.04(b) and 3.04(b), none of the Permits will be subject to revocation, suspension, withdrawal or termination as a result of the consummation of the Acquisition.

SECTION 3.12.      Insurance.

(a)           Section 3.12 of the Company Disclosure Letter lists, as of the date hereof, all current policies in respect of directors and officers liability, fiduciary liability, employment practices liability, errors and omissions liability, workers’ compensation liability, hull and machinery, protection and indemnity, title and other forms of insurance owned, held by or applicable to the Company (or its assets (including the Subsidiaries’ Vessels) or business).

(b)           To the knowledge of the Company, all insurance policies listed on Section 3.12 of the Company Disclosure Letter are in full force and effect.  All premiums due and payable thereon have been paid in full (other than retroactive or retrospective premium adjustments that are not yet, but may be, required to be paid with respect to any period ending prior to the Closing Date, which amounts shall be paid prior to the Closing Date if so required).

(c)           To the knowledge of the Company, each of the Company and its Subsidiaries has complied in all material respects with the provisions of each such policy under which it is an insured party.

 

 

  

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(d)           Since January 1, 2012, the Company has not been refused any insurance in writing with respect to its assets or operations by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance.

(e)           The insurance policies listed on Section 3.12 of the Company Disclosure Letter are sufficient for compliance by the Company and the Subsidiaries with (i) all requirements of Applicable Laws and mandatory Maritime Guidelines and (ii) all Contracts to which the Company or any Subsidiary is a party.

(f)            No material claims are outstanding under the insurance policies listed on Section 3.12 of the Company Disclosure Letter.  To the knowledge of the Company, there are no circumstances existing that could give rise to a material insurance claim under the insurance policies listed on Section 3.12 of the Company Disclosure Letter for which a claim has not yet been made.

SECTION 3.13.      Tax Matters.  (a)  All material Tax Returns required to have been filed by or with respect to the Company and the Subsidiaries have been duly and timely filed (taking into account any extensions) in accordance with Applicable Law.  All such Tax Returns are true, correct and complete in all material respects.  All material Taxes required to be paid by or with respect to the Company or any Subsidiary, whether or not shown on such Tax Returns, (i) have been timely paid or (ii) are being contested in good faith by appropriate proceedings and are reserved for on the most recent financial statements of the relevant person in accordance with SFRS.

(b)           The Company and the Subsidiaries have complied in all material respects with all Applicable Law relating to the collection and withholding of Taxes (including all information reporting and record keeping requirements), and all such Taxes, including all such Taxes with respect to amounts paid or owing to any current or former director, employee, independent contractor, consultant, creditor, shareholder, or other third party, have been duly paid within the time and in the manner prescribed by Applicable Law by or on behalf of the Company and the Subsidiaries.

(c)           Since January 1, 2009, no Tax Return of the Company or any of its Subsidiaries has been under audit or examination by any Taxing Authority, and no written notice has been received by the Company or any of its Subsidiaries that any audit, examination or similar proceeding is pending, proposed or asserted with regard to any Taxes or Tax Returns of the Company or any of its Subsidiaries.  There is no deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any material amount of Taxes due and owing by the Company or any of its Subsidiaries.  Each deficiency resulting from any completed audit or examination relating to Taxes by any Taxing Authority has been timely paid or is being contested in good faith and has been reserved for on the books of the Company.

(d)           To the knowledge of the Company, neither the Company nor any Subsidiary has waived any statute of limitations in respect of material Taxes or agreed to any extension of time with respect to an assessment or deficiency for material Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course).

 

 

  

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(e)            No deficiency for any material Taxes has been asserted by any Taxing Authority in writing against the Company or any Subsidiary, except for deficiencies that have been satisfied in full, settled or withdrawn or that have been adequately reserved for in accordance with SFRS.

(f)             Neither the Company nor any of its Subsidiaries joins or has joined, for any taxable period, in the filing of any affiliated, aggregate, consolidated, combined or unitary Tax Return other than consolidated Tax Returns for the consolidated group of which the Company is the common parent.

(g)            Neither the Company nor any Subsidiary is party to or bound by any Tax sharing agreement or Tax indemnity agreement, other than an agreement (i) the sole parties to which are the Company or any wholly-owned Subsidiary or (ii) with third parties, made in the ordinary course of business, the primary subject of which is not Tax.

(h)            To the knowledge of the Company, no written claim has ever been made by any Taxing Authority in a jurisdiction where any of the Company or its Subsidiaries does not file a Tax Return that the Company or any of its Subsidiaries is, or may be, subject to a material amount of Tax in such jurisdiction.

(i)             To the knowledge of the Company, no Taxing Authority has asserted in writing any material Liens for Taxes with respect to any assets or properties of the Company or any of its Subsidiaries, except for statutory Liens for Taxes not yet due and payable.

(j)             Section 3.13(j) of the Company Disclosure Letter sets forth the classification of the Company and each Subsidiary for U.S. Federal income tax purposes and lists each entity classification election and change in entity classification that has been made within the past five years with respect to each such entity for U.S. Federal income tax purposes.

SECTION 3.14.      Legal Proceedings.  As of the date of this Agreement, (a) there is no material Proceeding pending against the Company or any Subsidiary or, to the knowledge of the Company, Goodwood or, to the knowledge of the Company, threatened against the Company or any Subsidiary or Goodwood and (b) neither the Company nor any Subsidiary or, to the knowledge of the Company, Goodwood is a party to any Judgment or settlement agreement resulting in, or that would reasonably be expected to result in, a loss to the Company and the Subsidiaries of $250,000 or more.

SECTION 3.15.      Employee Benefit Plans.

(a)           Section 3.15(a) of the Company Disclosure Letter sets forth a complete and accurate list of each Company Benefit Plan, and, to the extent applicable, the Company has made available to Purchaser true, complete and correct copies of all plan documents, trust agreements, insurance Contracts or other funding arrangements (or, in the case of any unwritten Company Benefit Plan, a written description thereof), including any material amendments or modifications, with respect to each Company Benefit Plan.  Except as set out in each Employee’s respective service contract or contracts of employment with the Company or any Subsidiary (“Existing Service Contracts”), the Company does not currently offer, operate or provide (nor has it previously offered, operated or provided) any other Company Benefit Plan and all such rights, benefits and entitlements of Employees are as set out in the relevant Existing Service Contract or the Company Disclosure Letter.  The Company is in material compliance with the terms of each Company Benefit Plan.

 

 

  

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(b)           The Company has, at the date of this Agreement, complied with all its material obligations to contribute to any central provident fund in respect of any Employee.

(c)           Neither the Company nor any Subsidiary has any material Liability in respect of, or obligation to provide, post-retirement health, medical, vision or life insurance for Employees (or their beneficiaries), except (i) as required by Applicable Laws or (ii) coverage or benefits the entire cost of which is borne by the Employee.

(d)           No current or former director, Employee, consultant or independent contractor of the Company or any Subsidiary (i) is currently receiving any severance or separation pay or any workers’ compensation or disability benefits  from the Company or any Subsidiary, (ii) has received any loan from the Company or any Subsidiary that has an outstanding balance, (iii) has a right to receive a guaranteed bonus from the Company or any Subsidiary or (iv) is entitled to receive any gross-up, make-whole or other additional payment by reason of any Tax being imposed on such person.

(e)           The execution, delivery and performance of this Agreement by Sellers and the consummation of the transactions contemplated hereby will not (alone or in combination with any other event) result in an increase in the amount of compensation or benefits, or the acceleration of the vesting, funding or timing of payment of any compensation or benefits, payable to any Employee or under any Company Benefit Plan.

SECTION 3.16.      Absence of Changes or Events.  From the Balance Sheet Date to the date of this Agreement, (a) the Company and the Subsidiaries have conducted their businesses in the ordinary course and consistent with past practice, (b) there has not been a Company Material Adverse Effect described in clause (i), (ii), (iv) or (v) of the definition thereof and (c) neither the Company nor any Subsidiary has engaged in any of the acts specified in Section 5.01(a).

SECTION 3.17.      Compliance with Applicable Laws.  (a)  The Company and the Subsidiaries and, to the knowledge of the Company, Goodwood are in compliance with all Applicable Laws and applicable Maritime Guidelines, except for instances of noncompliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  Since January 1, 2012, none of the Sellers, the Company or the Subsidiaries or, to the knowledge of the Company, Goodwood has received any written notice from a Governmental Entity that alleges that the Company or a Subsidiary is not in compliance in any material respect with any Applicable Law or any Maritime Guideline.

(b)           Neither of the Company nor any of its Subsidiaries or, to the knowledge of the Company,  Goodwood, nor any director, officer or Employee of the Company or any of its Subsidiaries or, to the knowledge of the Company, Goodwood, nor any agent or representative of the Company or any Subsidiary or, to the knowledge of the Company,  Goodwood, (i) has directly or indirectly violated any provision of the FCPA, the UK Bribery Act or any other Applicable Law that prohibits corruption or bribery or (ii) has been investigated by any Governmental Entity, or been the subject of any allegation, with respect to conduct within the scope of clause (i) above.

 

 

  

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SECTION 3.18.      Employee Matters.  (a)  As of the date of this Agreement, no current Employee has given notice to the Company or the relevant Subsidiary of his or her intention to terminate employment with the Company and the Subsidiaries.  No current director, Employee, consultant or independent contractor is a party to or is bound by any confidentiality agreement, noncompetition agreement or other Contract (with any person) that materially restricts such person’s ability to perform his or her material duties or responsibilities to the Company or any Subsidiary.

(b)           Neither the Company nor any Subsidiary is party to, or is otherwise bound by, any collective bargaining agreement or other Contract with a labor organization, and, to the knowledge of the Company, there are not any labor unions or other organizations or groups representing, purporting to represent or attempting to represent any current Employees.

(c)           Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there is no strike, work stoppage, material work slowdown or lockout in effect or pending or, to the knowledge of the Company, threatened and since January 1, 2012, there has not been any such action.

SECTION 3.19.      Transactions with Affiliates.  Section 3.19 of the Company Disclosure Letter lists all Contracts by which the Company or any Subsidiary or Goodwood, on the one hand, and Sellers or any of their affiliates (other than the Company, the Subsidiaries and Goodwood), on the other hand, are a party or are otherwise bound as of the date of this Agreement and that involve continuing liabilities or obligations of the Company or the Subsidiaries or Goodwood (other than any Existing Service Contract or New Service Contract).  No current director, officer or Employee of the Company or any Subsidiary, or any family member or affiliate of any such director, officer or Employee, (i) owns, directly or indirectly, any interest in any asset or other property used in the business of the Company and the Subsidiaries, (ii) serves as a director, officer or employee of any person that is a supplier, customer or competitor of the Company or any Subsidiary or (iii) is a debtor or creditor of the Company or any Subsidiary.

SECTION 3.20.      Brokers.  Other than the Poten Arrangements (for which the Sellers shall be fully and solely responsible), no broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby based upon arrangements made by or on behalf of the Company or the Subsidiaries.

SECTION 3.21.      Environmental Matters.

(a)           Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:  (i) there are no pending or, to the knowledge of the Company, threatened Proceedings against the Company or any Subsidiary that seek to impose, or are reasonably likely to result in, any liability or obligation of the Company or any Subsidiary under any Environmental Law; and (ii) neither the Company nor any Subsidiary is subject to any agreement or Judgment by or with any Governmental Entity or third party imposing, nor has it assumed by Contract, operation of law or otherwise, any liability or obligation on such entity under any Environmental Law.

 

 

  

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(b)           Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) to the knowledge of the Company, during the period of the Company’s or its Subsidiaries’ ownership, operation or use thereof, no formerly owned, operated or used Vessel violated any Environmental Law; (ii) there have been no Releases of Hazardous Materials in, on, from or affecting any Vessels currently or formerly owned or operated by the Company, any of its Subsidiaries or any of its former Subsidiaries; and (iii) to the knowledge of the Company, there are no facts, circumstances or conditions that would reasonably be expected to form the basis for any investigation, suit, claim, action, proceeding, compliance obligation or liability against or affecting the Company or any of its Subsidiaries relating to or arising under Environmental Laws.

(c)           There have been no material environmental audits or reports prepared in the last five years, which are in the possession or under the reasonable control of the Company or the Subsidiaries, relating to the Company’s or any of its Subsidiaries’ past or current properties, including Vessels, or operations.

SECTION 3.22.      No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES MADE BY SELLERS IN THIS AGREEMENT, SELLERS AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SHARES, THE COMPANY, THE SUBSIDIARIES OR ANY OTHER MATTER.

SECTION 3.23.      General.

(a)           In each Sellers Warranty, where any statement is qualified as being “to the knowledge of the Company” or any similar expression, such statement shall be deemed to refer to the actual knowledge or awareness of Bengt Hermelin, Borzou Aram or any Seller.

(b)           The provisions of Article VIII shall apply in relation to the liability of the Sellers in respect of any Relevant Claim.

(c)           Notwithstanding anything to the contrary in this Agreement, (i) the matters, documents and other information set forth, included or reflected in the Disclosure Bundle shall not be deemed to qualify the Fundamental Company Warranties and (ii) the matters, documents and other information disclosed or deemed to have been disclosed in paragraph 1.3 of the Company Disclosure Letter shall not be deemed to qualify the Fundamental Company Warranties.

 

 

  

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ARTICLE IV

Warranties of Purchaser

Purchaser hereby warrants to Sellers that the following warranties in this Article IV are true and accurate at the date of this Agreement:

SECTION 4.01.      Organization and Standing.  Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands and has full power and authority and possesses all governmental licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement or a material adverse effect on the ability of Purchaser to consummate the Acquisition and the other transactions contemplated hereby (any such material adverse effect, a “Purchaser Material Adverse Effect”).

SECTION 4.02.      Power and Authority.  Purchaser has all requisite power and authority to execute this Agreement and to consummate the Acquisition and the other transactions contemplated hereby.  The execution and delivery by Purchaser of this Agreement and the consummation by Purchaser of the Acquisition and the other transactions contemplated hereby have been duly authorized by all necessary action on the part of Purchaser.  Purchaser has duly executed and delivered this Agreement and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

SECTION 4.03.      No Conflicts; Consents.  (a)  The execution and delivery by Purchaser of this Agreement does not and the consummation of the Acquisition and the other transactions contemplated hereby and compliance by Purchaser with the terms hereof and thereof will not, (i) conflict with, or result in any violation of any provision of, the article of incorporation or bylaws (or other comparable organizational instruments) of Purchaser, (ii) conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of Purchaser under, any provision of any Contract to which Purchaser is a party or by which any of its assets is bound or (iii) subject to the filings and other matters referred to in Section 4.03(b), conflict with, or result in any violation of any provision of, any Judgment or Applicable Law, in each case, applicable to Purchaser or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

 

 

  

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(b)           No material Consent of or from, or registration, declaration, notice or filing made to or with, any Governmental Entity is required to be obtained or made by or with respect to Purchaser or any affiliate of Purchaser in connection with the execution, delivery and performance of this Agreement or the consummation of the Acquisition or the other transactions contemplated hereby, other than (i) the Regulatory Approvals and (ii) compliance with and filings under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and the rules and regulations of any securities exchange.

SECTION 4.04.      Litigation.  As of the date of this Agreement, (a) there is no material Proceeding pending or, to the knowledge of Purchaser, threatened against Purchaser or any affiliate of Purchaser and (b) to the knowledge of Purchaser, none of Purchaser or Purchaser’s affiliates is a party to any Judgment or settlement agreement of or with a Governmental Entity that, in any case, individually or in the aggregate, has had or would reasonably be expected to have a Purchaser Material Adverse Effect.

SECTION 4.05.      Securities Act.  The Shares purchased by Purchaser pursuant to this Agreement are being acquired for investment only and not with a view to, or for sale in connection with, any distribution thereof, and Purchaser shall not offer to sell or otherwise dispose of the Shares so acquired by Purchaser in violation of any of the registration requirements of the Securities Act.  Purchaser (either alone or together with Purchaser’s advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of Purchaser’s investment in the Shares and is capable of bearing the economic risks of such investment.

SECTION 4.06.      Brokers.  No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby based upon arrangements made by or on behalf of Purchaser or any of Purchaser’s affiliates.

SECTION 4.07.      Relevant Claims.  Purchaser warrants that as at the date of this Agreement it does not have actual knowledge of any fact which would give rise to a Relevant Claim.

SECTION 4.08.      No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES MADE BY PURCHASER IN THIS AGREEMENT, PURCHASER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING PURCHASER OR ANY OTHER MATTER.

 

ARTICLE V

Covenants

SECTION 5.01.      Covenants Relating to Conduct of Business.   (a)  Except as contemplated or permitted by this Agreement, as set forth in Section 5.01(a) of the Company Disclosure Letter or with the prior written consent of Purchaser, from the date of this Agreement to the Closing, the Company shall, and shall cause the Subsidiaries to, conduct their respective businesses in the ordinary course in substantially the same manner as previously conducted.  In addition (and without limiting the generality of the foregoing), except as set forth in Section 5.01(a) of the Company Disclosure Letter, required by Applicable Law or otherwise contemplated or permitted by this Agreement, from the date of this Agreement to the Closing, the Company shall not, and shall not permit any Subsidiary to, do any of the following without the prior written consent of Purchaser:

 

 

  

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(i)      declare, set aside or pay any dividends on, or make any other distributions (whether in cash, shares or property) in respect of, any of its share capital, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent;

(ii)     (A) split, consolidate, combine or reclassify any of its outstanding share capital or issue or authorize the issuance of any shares or other securities in respect of, in lieu of or in substitution for its shares or (B) purchase, redeem or otherwise acquire any shares of the Company or any Subsidiary or any rights, warrants or options to acquire any such shares;

(iii)    issue, sell, grant or pledge any shares of the Company or any Subsidiary, any other voting securities or any securities convertible into (including “phantom” share rights, share appreciation rights and share-based performance units), or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities;

(iv)    amend the Company Memorandum of Association or the Company Articles or the comparable organizational documents of any Subsidiary or Goodwood;

(v)     sell, lease, license or otherwise dispose of any Vessel or any other material assets;

(vi)    enter into any Contract with respect to any merger, consolidation, liquidation, dissolution or business combination involving the Company or any Subsidiary;

(vii)   purchase, sell, lease, pledge or otherwise dispose or acquire any property or assets for which the aggregate consideration paid or payable in any individual transaction is in excess of $250,000 or in the aggregate in excess of $1,000,000;

(viii)  incur any financial indebtedness for borrowed money (other than accounts payable incurred in respect of property or services purchased in the ordinary course of business consistent with past practice) or make any third party loans or advances (other than, in each case, in the ordinary course of business consistent with past practice, for individual amounts not in excess of $250,000 or in the aggregate not in excess of $1,000,000);

(ix)     make any capital expenditures in excess of $250,000 individually or $1,000,000 in the aggregate (other than capital expenditures included in the business plans for the Company and the Subsidiaries that have been made available to Purchaser prior to the date of this Agreement);

 

 

  

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(x)      except as required by law or any judgment by a court of competent jurisdiction, (A) pay, discharge, settle or satisfy any material claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms of liabilities disclosed, reflected or reserved against in the Year End Balance Sheet (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (B) cancel any indebtedness or (C) waive or assign any claims or rights of substantial value;

(xi)     establish, adopt, amend in any material respect or terminate any Company Benefit Plan or any arrangement which, upon its establishment or adoption, would constitute a Company Benefit Plan, except as may be required by Applicable Laws or pursuant to the terms of any Company Benefit Plan or Contract, as in effect on the date of this Agreement;

(xii)    make or promise to make any bonus, profit-sharing or similar payment, or fund, materially increase or accelerate the vesting, payment or amount of, wages, salary, commissions, fringe benefits, severance benefits, deferred compensation or other compensation or benefits (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to, or for the benefit of, any current or former director, Employee, consultant or independent contractor, in each case except (A) as required by Applicable Laws or the terms of any Company Benefit Plan or Contract, as in effect on the date of this Agreement, (B) in the ordinary course of business (including in connection with promotions and employee review cycles) or (C) for any such action for which Sellers and their affiliates (other than the Company and the Subsidiaries) would be solely and directly liable (including where the Sellers are liable for this as a result of the full and entire effect and impact of such matter having been included in the calculation of the Actual Equity Amount);

(xiii)   hire or promote any Employee of the Company or any Subsidiary (whether or not in the ordinary course of business) or terminate the employment of any current Employee, other than due to such Employee’s death or disability or for cause (as determined by the Company or any Subsidiary, as applicable, in its reasonable discretion consistent with past practice);

(xiv)   make any material Tax election or settle or compromise any material Tax liability;

(xv)    enter into, modify, amend or terminate any Listed Contract (other than by entering into the New Service Contracts in accordance with, and as anticipated by, this Agreement) or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (A) adversely affect in any material respect the Company, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the transactions contemplated by this Agreement;

 

 

  

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(xvi)   enter into any charter of any Vessel in excess of three months’ duration;

(xvii)  make any changes in any material respect in the Company’s or any Subsidiary’s financial accounting or actuarial methods, principles or practices, except as may be required by SFRS (or any interpretation thereof) or by Applicable Law;

(xviii) fail to comply with or breach any representations, warranties, covenants, agreements, undertakings, obligations or conditions of the Company or the Subsidiaries under any of the Company Debt Facilities, which breach would (or with the passage of time would) constitute a default or event of default under the Company Debt Facilities; or

(xix)    authorize any of, or commit or agree to take, whether in writing or otherwise, to do any of, the foregoing actions.

(b)           Notice of Certain Events.  From the date of this Agreement until the Closing, the Company and the Sellers shall as soon as practicable notify Purchaser in writing of:  (i) any circumstance, event or action relating to any of Sellers, the Company or the Subsidiaries the existence, occurrence or taking of which has resulted or would reasonably be expected to result in the failure of any of the conditions set forth in Section 6.01 or Section 6.02 to be satisfied; (ii) any notice or other communication from any person alleging that the consent of such person is required in connection with the transactions contemplated by this Agreement; and (iii) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement.  From the date of this Agreement until the Closing, Purchaser shall as soon as practicable notify Sellers and the Company in writing of:  (A) any circumstance, event or action relating to Purchaser the existence, occurrence or taking of which has resulted or would reasonably be expected to result in the failure of any of the conditions set forth in Section 6.01 or Section 6.03 to be satisfied; (B) any notice or other communication from any person alleging that the consent of such person is required in connection with the transactions contemplated by this Agreement; and (C) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement.

(c)           Insurance.  The Company shall maintain all insurance policies set forth in Section 3.12 of the Company Disclosure Letter or suitable replacements therefor, in full force and effect through the close of business on the Closing Date.

 

 

  

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(d)           None of Sellers, the Company or Purchaser shall take any action that would, or that would reasonably be expected to, result in any of the conditions to the purchase and sale of the Shares set forth in Article VI not being satisfied.

SECTION 5.02.      Access to Information.  The Company shall, and shall cause the Subsidiaries to, afford to Purchaser and its accountants, counsel and other representatives reasonable access, upon reasonable notice during normal business hours during the period prior to the Closing, to all Employees, books, contracts, Tax Returns and records of the Company and the Subsidiaries and, during such period, shall furnish promptly to Purchaser any available information concerning the Company or a Subsidiary as Purchaser may reasonably request, so long as such access or requests do not unreasonably disrupt the normal operations of the Company and the Subsidiaries.

SECTION 5.03.      Confidentiality.  The parties acknowledge that the information being provided to it in connection with the Acquisition and the consummation of the other transactions contemplated hereby is subject to the terms of a confidentiality agreement, dated April 15, 2014, between Purchaser and the Company (the “Confidentiality Agreement”), the terms of which are incorporated herein by reference.

SECTION 5.04.      Reasonable Endeavors; Consents, Approvals and Filings.  (a)  Each Seller, the Company and Purchaser shall each use its reasonable endeavors to take, or cause to be taken, all actions, and to do or cause to be done, and to assist and cooperate in doing, all things necessary, proper or advisable to consummate as promptly as practicable the Acquisition and the other transactions contemplated by this Agreement, including using its reasonable endeavors to (i) comply as promptly as practicable with all requirements of Governmental Entities applicable to the Acquisition, (ii) seek to obtain or make as promptly as practicable all governmental approvals, filings or notices necessary or advisable in connection with the Acquisition, including any approvals, filings or notices required in connection with the Regulatory Approvals, and (iii) fulfill or cause the fulfillment of the conditions to Closing set forth in Article VI.  The parties shall cooperate with the reasonable requests of each other in seeking to obtain as promptly as practicable all such governmental approvals.  In connection therewith, Sellers and Purchaser shall make, and cause their respective affiliates to make, all filings required by Applicable Laws as promptly as practicable after the date hereof in order to facilitate prompt consummation of the Acquisition and the other transactions contemplated by this Agreement, and shall provide and shall cause their respective affiliates to provide such information and communications to Governmental Entities as such Governmental Entities may request.

(b)           From and after the date of this Agreement, Sellers and Purchaser shall use their reasonable endeavors, and shall cooperate with each other, to obtain as soon as reasonably practicable following the date hereof all Third Party Consents. Purchaser shall bear all costs, fees and expenses (including any license or other fees and expenses and any pass through or recharged legal or other costs and fees of any party granting any Third Party Consent) of itself, the Company and the Subsidiaries associated with obtaining the Third Party Consents, regardless of whether or not the Closing occurs.

 

 

  

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(c)           Prior to Closing, Sellers shall cause the Company to comply with the terms of this Agreement.  From and following Closing, Purchaser shall cause the Company to comply with the terms of this Agreement.

SECTION 5.05.      Expenses; Transfer Taxes.  (a)  Whether or not the Closing takes place, and except as set forth in Section 5.04 and Section 5.11, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs or expenses.

(b)           All share transfer, documentary, stamp, recording and other similar Taxes applicable to the transfer of the Shares (including interest, penalties and additions to any such Taxes) (“Transfer Taxes”) shall be borne by the Purchaser.  All parties hereto shall use reasonable endeavors to avail themselves of any available exemptions from any applicable Transfer Taxes and to cooperate with the other parties hereto in providing any information and documentation that may be necessary to obtain such exemptions.

SECTION 5.06.      Continuing Operation of the Company and Employee Matters.  (a)  Until the date that is two years after the Closing, Purchaser undertakes to the Sellers to operate the Company as a wholly owned subsidiary of the Purchaser, with its existing management and Employee team (subject always to the terms of their respective New Service Contracts); provided, however, that Purchaser shall be permitted to restructure its corporate organization (including with respect to the Company and the Subsidiaries) during such period as necessary, desirable or appropriate in connection with tax, financing or other structuring or planning activities or objectives as reasonably determined by Purchaser in good faith, subject at all times to the Company being maintained as a wholly owned subsidiary within the Purchaser’s corporate group and the business of the Company continuing in the manner as at the Closing Date.

(b)           Until the date that is two years after the Closing, (i) the Chief Executive Officer of the Company will report to the board of directors of the Company as constituted from time to time and (ii) the other Employees of the Company will: (A) report for administrative purposes to the  Chief Executive Officer of the Company or other respective head of their function within the Company; and (B) interact with, and report at an operational level to, individuals in equivalent functional reporting lines at the Purchaser, as determined from time to time by Purchaser.

(c)           From and after the Closing, Purchaser and its subsidiaries shall honor (and shall procure that the Company honors), in accordance with their terms, all legally binding contracts, agreements, arrangements, policies, plans and commitments of the Company and the Subsidiaries as in effect on or immediately prior to the Closing that are applicable to any current or former directors or Employees of the Company or any Subsidiary.  Employees of the Company or any Subsidiary who remain employed by Purchaser or its subsidiaries following the Closing shall receive credit for purposes of eligibility, participation and vesting (but not for benefit accruals) under any employee benefit plan, program or arrangement established or maintained by Purchaser for service accrued or deemed accrued prior to the Closing with the Company or any Subsidiary; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit.  In addition, Purchaser shall waive, or cause to be waived, any limitations on benefits relating to any pre-existing conditions to the same extent such limitations are waived under any comparable plan of Purchaser or its subsidiaries and recognize, for purposes of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by Employees of the Company and the Subsidiaries in the calendar year in which the Closing occurs.

 

 

  

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(d)           Subject to compliance with Section 5.06(c), nothing contained herein shall be construed as requiring, and the Company shall take no action that would have the effect of requiring, Purchaser to continue any specific plans or to continue the employment of any specific person (subject always to the terms of the New Service Contracts).  This Section 5.06 shall be binding and inure solely to the benefit of each party to this Agreement, and nothing in this Section 5.06, express or implied, is intended to confer upon any other person any rights pursuant to this Section 5.06.

SECTION 5.07.      Tax Matters.  (a)  Return Filings.  The Company and the Subsidiaries shall timely prepare and file with the appropriate Taxing Authorities all Tax Returns required to be filed by them and shall pay all Taxes due with respect to such Tax Returns.

(b)           Cooperation.  Sellers, the Company and Purchaser shall reasonably cooperate, and shall cause their respective affiliates, officers, employees, agents, auditors and representatives reasonably to cooperate, in preparing and filing all Tax Returns relating to the Company and the Subsidiaries, including maintaining and making available to each other all records necessary in connection with Taxes, and in resolving all disputes and audits with respect to all taxable periods relating to Taxes.  After the Closing Date, Sellers shall be granted access to the accounting and Tax records and information held by the Company and the Subsidiaries to the extent such records and information pertain to events occurring prior to the Closing Date.  The Company shall, and shall cause each Subsidiary to, (i) use its reasonable endeavors to properly retain and maintain such records until such time as Sellers determine that such retention and maintenance is no longer necessary and (ii) to allow Sellers and their agents and representatives, at times and dates reasonably acceptable to the Company, to inspect, review and make copies of such records as Sellers may deem necessary or appropriate from time to time, such activities to be conducted during normal business hours and at Sellers’ expense.

SECTION 5.08.      Publicity.  No public release or announcement concerning the transactions contemplated hereby shall be issued by any party without the prior consent of the other parties (which consent shall not be unreasonably withheld, delayed or conditioned), except as such release or announcement may be required by Applicable Law or the rules or regulations of or any listing agreement with any applicable securities exchange, in which case the party required to make the release or announcement shall allow the other parties reasonable time to comment on such release or announcement in advance of such issuance; provided, however, that the Company and Purchaser may make internal announcements to their respective employees that are consistent with the parties’ prior public disclosures regarding the transactions contemplated hereby.

SECTION 5.09.      Financing.  Purchaser shall use its reasonable endeavors to consummate one or more equity financings with aggregate net proceeds of not less than $290 million as soon as reasonably practicable after the date of this Agreement (the “Purchaser Equity Financing”).  Notwithstanding the foregoing, Purchaser shall not be required to sell any of its shares of common stock at a price less than $7.50 per share as a result of this Section 5.09, Section 5.04 or any other provision of this Agreement.

 

 

  

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SECTION 5.10.      Further Assurances.  From time to time, as and when requested by any party, each party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary to consummate the transactions contemplated by this Agreement.

SECTION 5.11.      Company Assistance with Financing.  The Company shall use its reasonable endeavors to assist Purchaser in connection with the Purchaser Equity Financing, including by delivering all financial information and reports concerning the Company and the Subsidiaries as may be reasonably requested by Purchaser and requesting its auditors to be available to and to cooperate with Purchaser and its advisers and requesting its auditors to provide customary “comfort letters” with respect to any financial information of the Company and the Subsidiaries that is included in, or incorporated by reference into, any registration statement filed by Purchaser.  Purchaser shall bear all costs, fees and expenses associated with any work undertaken by the Company’s auditors at the request of the Purchaser or its advisers in connection with the Purchaser Equity Financing, regardless of whether or not the Closing occurs.

 

ARTICLE VI

Conditions Precedent

SECTION 6.01.      Conditions to Each Party’s Obligation.  The obligation of Purchaser to purchase and pay for the Seller Shares and the obligation of each Seller to sell the Seller Shares to Purchaser is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

(a)           No Injunctions or Restraints.  No Applicable Law or Judgment enacted, entered, promulgated, enforced or issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition (a “Legal Restraint”) shall be in effect.

(b)           Company Material Adverse Effect.  From the date of this Agreement, there shall not have occurred any Company Material Adverse Effect.

SECTION 6.02.      Conditions to Obligation of Purchaser.  The obligation of Purchaser to purchase and pay for the Shares is subject to the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of the following conditions:

(a)           Warranties Relating to the Company.

(i)             No Sellers Warranty (other than the Fundamental Company Warranties) given on the date of this Agreement shall have been untrue or incorrect (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) when given on the date of this Agreement, where such breach or failure, individually or in the aggregate, has had or is reasonably expected to have a Company Material Adverse Effect.

 

 

  

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(ii)            No Fundamental Company Warranty shall have been untrue or incorrect when given on the date of this Agreement or on any date from the date of this Agreement through the Closing Date.

(iii)            Nothing shall have occurred between the date of this Agreement and Closing as a result of the non-performance or non-compliance by the Sellers or the Company with the terms of Section 5.01(a), that would, if all Sellers Warranties (other than the Fundamental Company Warranties) were deemed repeated immediately prior to the relevant event, represent a breach of such Sellers Warranties (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein), where such breach or failure, individually or in the aggregate, has had or is reasonably expected to have a Company Material Adverse Effect.

(b)           Warranties of Sellers.

(i)             No warranty in Article II (other than the warranties set out in Section 2.06) shall have been untrue or incorrect (without giving effect to any limitation as to “materiality” or “Seller Material Adverse Effect” set forth therein) when given on the date of this Agreement or on any date from the date of this Agreement through the Closing Date, where such breach or failure, individually or in the aggregate, has had or is reasonably expected to have a Seller Material Adverse Effect.

(ii)            No warranty set out in Section 2.06 shall have been untrue or incorrect when given on the date of this Agreement or on any date from the date of this Agreement through the Closing Date.

(c)           Performance of Obligations of Sellers.  Sellers shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Sellers or the Company by the time of the Closing.

(d)           Financing.  Purchaser shall have completed the Purchaser Equity Financing.

(e)           Third Party Consents.  All of the Third Party Consents shall have been obtained and shall be in full force and effect.

SECTION 6.03.      Conditions to Obligation of Sellers.  The obligation of each Seller to sell the Seller Shares to Purchaser is subject to the satisfaction (or waiver by such Seller) on or prior to the Closing Date of the following conditions:

(a)           Warranties of Purchaser.  No warranty given by Purchaser on the date of this Agreement shall have been untrue or incorrect (without giving effect to any limitation as to “materiality” or “Purchaser Material Adverse Effect” set forth therein) when given on the date of this Agreement, where such breach or failure, individually or in the aggregate, has had or is reasonably expected to have a Purchaser Material Adverse Effect.

 

 

  

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(b)           Performance of Obligations of Purchaser.  Purchaser shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Purchaser by the time of the Closing.

SECTION 6.04.      Frustration of Closing Conditions.  Neither Purchaser nor Sellers may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such party’s failure to act in good faith or to use its reasonable endeavors to cause the Closing to occur, as required by Section 5.04.

ARTICLE VII

Termination, Amendment and Waiver

SECTION 7.01.      Termination.  (a)  This Agreement may be terminated and the Acquisition and the other transactions contemplated by this Agreement abandoned at any time prior to the Closing:

(i)            by mutual written consent of Sellers and Purchaser;

(ii)           by either Sellers or Purchaser:

	
  

	
(1)

	
if the Closing does not occur on or prior to September 23, 2014 (the “Outside Date”); or

	
  

	
(2)

	
if the condition set forth in Section 6.01(a) is not satisfied and the Legal Restraint giving rise to such non-satisfaction has become final and non-appealable;

(iii)          by Sellers, if Purchaser breaches or fails to perform any of its covenants or agreements contained in this Agreement, or if any of the warranties of Purchaser contained herein fails to be true and correct, which breach or failure (A) would constitute a failure of a condition set forth in Section 6.03(a) or Section 6.03(b) and (B) is not reasonably capable of being cured by Purchaser by the Outside Date; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(iii) shall only be available if Sellers and the Company are not then in breach of any covenant or agreement contained in this Agreement and no representation or warranty of Sellers or the Company contained herein then fails to be true and correct such that the conditions set forth in Section 6.02(a), 6.02(b) or 6.02(c) could not then be satisfied; or

(iv)          by Purchaser, if Sellers breach or fail to perform any of their covenants or agreements contained in this Agreement, or if any of the Sellers Warranties or the warranties relating to the Sellers contained herein fails to be true and correct, which breach or failure (A) would constitute a failure of a condition set forth in Section 6.02(a), 6.02(b) or 6.02(c) and (B) is not reasonably capable of being cured by Sellers by the Outside Date; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(iv) shall only be available if Purchaser is not then in breach of any covenant or agreement contained in this Agreement and no representation or warranty of Purchaser contained herein then fails to be true and correct such that the conditions set forth in Section 6.03(a) or 6.03(b) could not then be satisfied.

 

 

  

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(b)           In the event of termination by Sellers or Purchaser pursuant to this Section 7.01, written notice of such termination shall be given to the other parties to this Agreement and the transactions contemplated by this Agreement shall be terminated, without further action by any party.  If the transactions contemplated by this Agreement are terminated as provided herein:

(i)            Purchaser shall return all documents and other material received from Sellers or the Company relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Sellers or the Company, as the case may be; and

(ii)           all confidential information received by Purchaser with respect to the business of the Company and the Subsidiaries shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement.

SECTION 7.02.      Effect of Termination.  If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in Section 7.01, this Agreement shall terminate and be of no further force and effect, without any liability or obligation on the part of any party, except for the provisions of (i) Sections 2.07, 3.20 and 4.06 relating to broker’s fees, (ii) Section 5.03 relating to the obligation of Purchaser to keep confidential certain information and data obtained by it, (iii) Section 5.05 and Section 5.11 relating to certain expenses, (iv) Section 5.08 relating to publicity and (v) Section 7.01 and this Section 7.02, all of which shall survive such termination.  Nothing in this Section 7.02, however, shall be deemed to release any party from any liability for damages for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement.

SECTION 7.03.      Amendment.  This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

SECTION 7.04.      Extension; Waiver.  At any time prior to the Closing, the parties may in accordance with the following provisions of this Section 7.04 (a) extend the time for the performance of any of the obligations or other acts of the other parties; (b) waive any inaccuracies in the warranties contained in this Agreement or in any document delivered pursuant to this Agreement; or (c) waive compliance with any of the agreements or conditions contained in this Agreement.  Any agreement on the part of a party to any such extension or waiver in accordance with this Section 7.04 shall be valid only if set forth in an instrument in writing signed on behalf of such party.  The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

 

  

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ARTICLE VIII

Relevant Claims

SECTION 8.01.      Limitation on Sellers Liability.

(a)          The aggregate total liability of the Sellers in respect of all Relevant Claims shall be limited to US$100,000,000 (the “Maximum Liability Amount”) and the aggregate liability of each Seller in respect of all Relevant Claims shall be limited to that Seller’s Respective Percentage of the Maximum Liability Amount; provided, however, that (A) except as provided in clause (B) below, this clause shall not apply to any Relevant Claims arising out of a breach or alleged breach of any of the Fundamental Company Warranties or any of the Fundamental Seller Warranties  and (B) in no event shall the Sellers’ aggregate liability in respect of all Relevant Claims (including those under the Fundamental Company Warranties and the Fundamental Seller Warranties) exceed the Purchase Price.

(b)          The maximum liability of each individual Seller in respect of any individual Relevant Claim shall be limited to that Seller’s Respective Percentage of the value of such Relevant Claim.

(c)          The Sellers shall not have any liability for a Relevant Claim:

(i)             unless the aggregate of all Relevant Claims for which Sellers would, but for this Section 8.01(c)(i), be liable exceed on a cumulative basis an amount equal to $2,500,000, and then only to the extent of any such excess; provided, however, that this clause (i) shall not apply to any Relevant Claims arising out of a breach or alleged breach of the Fundamental Company Warranties or the Fundamental Seller Warranties or Section 3.20 or Section 2.07;

(ii)            where the amount of the Relevant Claim is less than $175,000; provided, however, that this clause (ii) shall not apply to any Relevant Claims arising out of a breach or alleged breach of the Fundamental Company Warranties or the Fundamental Seller Warranties or Section 3.20 or Section 2.07;

(iii)            if the Relevant Claim arises or occurs as a result of any action taken or omitted to be taken by Purchaser (or by the Company or any of the Subsidiaries at the request, or with the consent, in writing of Purchaser), including any change in the accounting or Tax policies or practices of the Company or any Subsidiary after the Closing introduced by Purchaser;

(iv)            where the matter the subject of the Relevant Claim is capable of remedy by the Sellers, and the matter is remedied to Purchaser’s reasonable satisfaction within 30 days after the date on which such matter is notified to the Sellers;

 

 

  

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(v)           if the Relevant Claim occurs as a result of or is otherwise attributable to:

	
  

	
(1)

	
any legislation not in force at the date of this Agreement or any change of law which comes into force after the date of this Agreement, in each case if and to the extent such legislation or change of law has retrospective effect to prior periods; or

	
  

	
(2)

	
any increase after the Closing in any rate of Tax applicable to the Company or any of the Subsidiaries (whether for periods prior to or after Closing);

(vi)          subject to Section 3.23(c), where the matter giving rise to the Relevant Claim or to which the Relevant Claim relates was fully and fairly disclosed in or set out in the Company Disclosure Letter; or

(vii)         to the extent any amount or liability in respect of such Relevant Claim was provided for or reserved against in calculating the Actual Equity Amount, but only to the extent of such provision or reserve.

(d)           Except as otherwise specifically provided in this Agreement, Purchaser acknowledges and agrees that its sole and exclusive remedy after the Closing with respect to all Relevant Claims (other than claims of, or causes of action arising from, fraud) shall, in each case, be an action in damages and Purchaser shall not be entitled to terminate or rescind this Agreement by reason of any Relevant Claim or otherwise (other than in connection with fraud).  In furtherance of the foregoing, each of Purchaser and the Company hereby waives, from and after the Closing, to the fullest extent permitted under Applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud) it may have against Sellers arising under or based upon this Agreement (except pursuant to an action in damages).  After the Closing, Sellers shall not be entitled to terminate or rescind this Agreement for any reason.

SECTION 8.02.      Calculation of Value of Relevant Claim.  (a)  Subject to Section 8.02(b), the value of any Relevant Claim made by Purchaser shall include all Losses arising from, relating to or otherwise in respect of such Relevant Claim, and shall include reasonable legal fees and expenses in connection therewith; provided, however, that such legal fees and expenses shall be disregarded for purposes of determining whether the thresholds in 8.01(c)(i) and 8.01(c)(ii) have been satisfied.  The value of any Relevant Claim made by Purchaser shall be deemed to be net of any amounts recovered or recoverable by Purchaser or the Company as a result of any indemnification by a third party or under insurance policies with respect to such related Relevant Claim.

(b)           Purchaser shall not be entitled to recover under any Relevant Claim any amounts that are in the nature of punitive, incidental, consequential, special, treble or indirect damages or damages based on any multiple, including business interruption, loss of future revenue, profits or income, or loss of business reputation or opportunity, in each case of any kind or nature, regardless of the form of action through which any of the foregoing are sought, except to the extent such punitive, incidental, consequential, special, treble or indirect damages or damages based on any multiple are payable to an unaffiliated third party by Purchaser or its affiliates.

 

 

  

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(c)           Notwithstanding any other provision of this Agreement, the liability of the Sellers under this Agreement and the value of any Relevant Claim calculated in accordance with Section 8.02 shall not be increased as a result of the Purchaser Equity Financing and nothing in this Agreement shall increase the liability of the Sellers for any Relevant Claim beyond the amount for which the Sellers would have been liable if Purchaser was not undertaking the Purchaser Equity Financing.

(d)           Subject always to the other provisions of this Agreement limiting the liability of the Sellers, if the Purchaser establishes a valid Relevant Claim with respect to the warranties in this Agreement (having regard to any qualification or exception contained in such warranty relating to materiality or “Company Material Adverse Effect”), then the value of that Relevant Claim shall be deemed to be the full amount of such Relevant Claim and not just the amount in excess of any materiality or “Company Material Adverse Effect” threshold deemed to apply to such warranty.

SECTION 8.03.      Expiry of Sellers Liability for Relevant Claims.  The Sellers’ liability for any Relevant Claim (including under Section 8.05) shall terminate unless the Purchaser has delivered notice of such claim, stating in reasonable detail the basis of such claim and Purchaser’s reasonable estimate of the Losses claimed, by no later than:

(a)           in the case of any Relevant Claim under the warranties contained in this Agreement (other than the warranties in Section 3.13, the Fundamental Company Warranties or the Fundamental Seller Warranties), the date falling 18 months after the Closing; and

(b)           in the case of any other Relevant Claim (i.e., other than Relevant Claims subject to Section 8.03(a)), the date falling five years after the Closing.

The parties agree that, after the dates set forth above, the Sellers’ liability for any Relevant Claim shall survive only in respect of, and only until, the resolution of the matter the subject of the Relevant Claim detailed in any notice served prior to the above dates.

SECTION 8.04.      Procedures.  (a)  Third Party Claims.  In order for Purchaser to be entitled to recover for any Relevant Claim in respect of, arising out of or involving a claim made by, or any liability to, any third person (including any Taxing Authority) against the Company, any of the Subsidiaries or Purchaser (a “Third Party Claim”), Purchaser must notify the Sellers in writing (and in reasonable detail) of the Third Party Claim promptly following receipt by the Company or Purchaser of notice of the Third Party Claim; provided, however, that, subject to Section 8.03, failure to give such notification shall not affect the ability of Purchaser to recover for the Relevant Claim provided hereunder except to the extent the Sellers have been actually prejudiced as a result of such failure.  Thereafter, Purchaser shall deliver to the Sellers, promptly following the Purchaser’s or the Company’s or any Subsidiary’s receipt thereof, copies of all notices and documents (including court papers) received by the Purchaser or the Company relating to the Third Party Claim.

 

 

  

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(b)           Assumption.  If a Third Party Claim is made against the Purchaser, the Company or any of the Subsidiaries, or any Tax is payable in respect of which a claim could be brought under Section 8.05(a), the Sellers shall be entitled to participate in the defense thereof and, if they so choose, to assume the defense thereof with counsel selected by the Sellers, so long as such counsel is not reasonably objected to by the Purchaser or the Company.  Should the Sellers so elect to assume the defense of a Third Party Claim, the Sellers shall not be liable to the Purchaser or the Company for any legal expenses subsequently incurred by the Purchaser or the Company in connection with the defense thereof.  If the Sellers assume such defense, the Purchaser or the Company shall have the right to participate in the defense thereof and to employ counsel (not reasonably objected to by the Sellers), at its own expense, separate from the counsel employed by the Sellers, it being understood that the Sellers shall control such defense.  The Sellers shall be liable for the fees and expenses of counsel employed by the Purchaser or the Company for any period during which the Sellers have not assumed the defense thereof.  If the Sellers choose to defend or prosecute a Third Party Claim, the Purchaser and the Company shall cooperate in the defense or prosecution thereof.  Such cooperation shall include the retention and (upon the Sellers’ request) the provision to the Sellers of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  Whether or not the Sellers assume the defense of a Third Party Claim, the Purchaser or the Company shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Sellers’ prior written consent (which consent shall not be unreasonably withheld).  If the Sellers assume the defense of a Third Party Claim, the Purchaser and the Company shall agree to any settlement, compromise or discharge of a Third Party Claim that the Sellers may recommend and that by its terms obligates the Sellers to pay the full amount of any final liability agreed between the Sellers and the relevant third party in connection with such Third Party Claim and which releases the Purchaser, the Company and the Subsidiaries completely in connection with all future liability for such Third Party Claim.  Notwithstanding the foregoing, the Sellers shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the Purchaser and the Company in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Purchaser or the Company or any Subsidiary that the Purchaser or the Company reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages.  If such equitable relief or other relief portion of the Third Party Claim can be so separated from that for money damages, the Sellers shall be entitled to assume the defense of the portion relating to money damages.

(c)           Mitigation.  Purchaser and Sellers shall cooperate with each other with respect to resolving any claim or liability with respect to which one party is liable to the other parties hereunder, including each  agreeing to make commercially reasonable endeavors to mitigate any loss suffered by it (or any of its affiliates) or resolve any such claim or liability.

 

 

  

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SECTION 8.05.      Tax Allocation.

(a)           Tax Allocation to Sellers.  From and after Closing, each Seller shall, subject to Section 8.05(d), pay to the Purchaser (or at the Purchaser’s direction to its affiliates (including the Company and the Subsidiaries)) its Respective Percentage of an amount equal to any Tax relating to the Company or any of the Subsidiaries attributable to periods (or portions thereof) ending on or before Closing; provided, however, that the Sellers shall not have any obligation to make a payment under this Section 8.05(a) for Tax to the extent such Tax:

(i)             is provided for or reserved against in calculating the Actual Equity Amount, but only to the extent of such provision or reserve;

(ii)            is Tax arising (or increased) as a result of any change in the accounting or Tax policies or practices of the Company or any Subsidiary introduced after Closing (including any change in the accounting reference date);

(iii)           is Tax which arises or is increased as a result of any default or delay by the Company, the Purchaser or any of the Subsidiaries after Closing in paying or satisfying any Tax or any breach by the same parties of this Agreement after Closing; or

(iv)           is Tax arising in any of the circumstances reflected in Sections 8.01(c)(iii) or (iv);

(v)            is Tax which arises or is increased as a result of the Company losing or ceasing to be entitled to benefit from the awarded Approved International Shipping Enterprise (AIS) Incentive to the extent such loss or cessation of entitlement is a direct result of the entry into of this Agreement or the consummation of the transactions contemplated herein (including Closing).

(b)           Tax Allocation to Purchaser.  Except to the extent taken into account in the calculation of the Actual Equity Amount, from and after Closing, Purchaser shall pay or, if applicable, reimburse the Sellers for any Taxes relating to the Company or any of the Subsidiaries except to the extent that such Tax is Tax in respect of which the Purchaser is entitled to receive a payment under Section 8.05(a).

(c)           Overlap.  To the extent that any obligation or responsibility under this Agreement with respect to Taxes (other than pursuant to this Section 8.05) may overlap with an obligation or responsibility pursuant to this Section 8.05, the provisions of this Section 8.05 shall govern.  The limitations in Section 8.01 shall not apply to this Section 8.05 except as explicitly provided in this Section 8.05, and no separate Relevant Claim shall be brought by the Purchaser (otherwise than under Section 8.05(a)) in respect of Tax which is payable by any of the Company or any of the Subsidiaries.

(d)           Limitations.  Notwithstanding the foregoing provisions of this Section 8.05:

 

 

  

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(i)             Sections 8.01(a) and 8.01(b) shall apply to all claims made under this Section 8.05; and

(ii)             neither the Sellers (taken together) nor the Purchaser shall be liable pursuant to Section 8.05(a) or Section 8.05(b), respectively, for any individual item with respect to which the Loss suffered does not exceed $25,000; provided, however, that if the cumulative Losses suffered by the Purchaser or the Sellers (taken together) with respect to all items disregarded pursuant to the foregoing provisions of this Section 8.05(d)(ii) equal or exceed $100,000, then the Sellers (taken together) or the Purchaser, as the case may be, shall be liable for the total amount of all such Losses, and all reasonable legal fees and expenses in connection therewith, pursuant to Section 8.05(a) or Section 8.05(b), respectively, and not just the excess.

(e)           Outstanding Tax Returns.    From and after Closing, Purchaser and the Company shall: (i) deal with all matters (including preparing and dealing with all correspondence and any other documentation) relating to the Tax affairs of the Company or any of the Subsidiaries for any Tax period (or part period) ending after Closing, (ii) afford the Sellers, if they so request, reasonable opportunity to be involved in the conduct of the Tax affairs referred to in this Section 8.05(e) and all outstanding matters (including preparing and dealing with all correspondence and any other documentation) relating to the Tax affairs of the Company or any of the Subsidiaries  for all Tax periods ended on or before Closing to the extent such Tax affairs relate exclusively to Taxes for which Sellers would be required to indemnify the Purchaser pursuant to this Section 8.05, and (iii) act in accordance with all reasonable comments of the Seller in relation to the Tax affairs referred to in Section 8.05(e)(ii), including promptly supplying the Sellers with copies of any material communications received from any Taxing Authority and any communications or materials proposed to be sent to any Taxing Authority in relation thereto (and affording the Sellers such access, including the taking of copies, to such books, accounts, records and personnel, and such other assistance, as the Sellers reasonably require for the purpose of enabling the Sellers to exercise their rights in this Section 8.05(e)).

SECTION 8.06.      No Liability of Company Directors and Employees.  For the avoidance of doubt, except in the case of fraud, the Sellers and Purchaser acknowledge and agree that no director, officer, employee or agent of the Company, Purchaser or Purchaser’s affiliates shall incur any liability (in their capacity as a director, officer, employee or agent of the Company, Purchaser or Purchaser’s affiliates) for any act or omission in the course of negotiating this Agreement or, if applicable, in assisting with the preparation of the Company Disclosure Letter, and to the extent any claim may exist (other than claims of, or causes of action arising from, fraud), each of the Sellers and Purchaser hereby waives any such right or claim.

ARTICLE IX

General Provisions

SECTION 9.01.      Assignment.  This Agreement and the rights and obligations hereunder shall not be assignable or transferable, in whole or in part, by operations of law or otherwise, by any party without the prior written consent of the other parties hereto.  Any attempted assignment in violation of this Section 9.01 shall be null and void.  Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

 

 

  

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SECTION 9.02.      No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the parties hereto and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give to any person who is not a party to this Agreement any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

SECTION 9.03.      Notices.  All notices, requests, claims, demands and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, by e-mail (which is confirmed) or if sent by courier (providing proof of delivery) to the parties at the following addresses:

 

	 	
(i)   if to Purchaser, to:

	 	
DHT Holdings, Inc.

	 	
Clarendon House

	 	
2 Church Street

	 	
Hamilton HM 11

	 	
Bermuda

	 	
Attention:

	
Svein Moxnes Harfjeld and Trygve P. Munthe, Co-Chief Executive Officers

	 	
Email:

	
smh@dhtankers.com, tpm@dhtankers.com

 

	 	with a copy (which shall not constitute notice) to:
	 	
 

	 	
DHT Management AS

	 	
Haakon VIIs gt. 1, 6th floor

	 	
POB 2039, 0125 Oslo, Norway

	 	
Attention:

	
Svein Moxnes Harfjeld and Trygve P. Munthe, Co-Chief Executive Officers

	 	
Email:

	
smh@dhtankers.com, tpm@dhtankers.com

  

	 	
with a copy (which shall not constitute notice) to:

	 	
  

	 	
Cravath, Swaine & Moore LLP

	 	
Worldwide Plaza

	 	
825 Eighth Avenue

	 	
New York, New York 10019

	 	
Attention:

	
Erik R. Tavzel, Esq.

	 	
Email:

	
etavzel@cravath.com

 

 

 

 

  

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(ii)    if to Sellers, to:

	 	 
	(A) 	c/o Abraar International Holding Company
	 	
PO Box 459

	 	
Jeddah - 21411

	 	
Kingdom of Saudi Arabia

	 	
Attention:

	
Mr Mohammed A AlQatari

	 	
Email:

	
m.alqatari@retaaj.net; talal@retaaj.net; safzal@tracoksa.com

 

	(B)	
201 Ocean Drive

	 	
#01-17 The Azure

	 	
Singapore 098584

	 	
Republic of Singapore

	 	
Attention:

	
Bengt Hermelin

	 	
Email:

	
bhermelin@aol.com

	 	
with a copy (which shall not constitute notice) to:

	 	
  

	 	
Norton Rose Fulbright (Asia) LLP

	 	

One Raffles Quay

	 	
34-02 North Tower

	 	
Singapore, 048583

	 	
Attention:

	
Gervais Green

	 	
Email:

	
Gervais.green@nortonrosefulbright.com

 

SECTION 9.04.      Interpretation; Exhibits and Schedules; Certain Definitions.  

(a)           The headings contained in this Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(b)           Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The term “or” is not exclusive.  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”.

(c)           All references herein to “dollars”, “U.S. dollars”, “$”, “US$” or “USD$” shall be deemed to be references to the lawful money of the United States.

(d)           The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and shall include references to all attachments thereto and instruments incorporated therein.  References to a person are also to its permitted successors and assigns.

 

 

  

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(e)           All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement.  When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.  The Company Disclosure Letter shall be arranged in numbered and lettered sections and subsections corresponding to the numbered and lettered sections and subsections contained in Article III and Article V, and any matter fully and fairly disclosed in any section or subsection shall be deemed to qualify other sections and subsections in Article III or Article V, and for the purposes of this Agreement fully and fairly disclosed shall have the meaning given to it in the Company Disclosure Letter.

(f)            For all purposes hereof:

“Actual Equity Amount” means the Actual Equity Amount as set forth in the Closing Statement and finally determined in accordance with Schedule 3.

“affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person.  For purposes of this definition, “control”, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Applicable Law” means any statute, law (including common law), ordinance, rule or regulation applying to the relevant party.

“Business Day” means any day, other than a Saturday or a Sunday, on which commercial banks in New York, New York, Singapore, Switzerland and Bermuda, are open for normal banking business.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Company Benefit Plans” means any legally required or binding employee benefit plan, scheme, policy, practice or contract providing compensation, severance, termination pay, deferred compensation, vacation, paid time off, medical benefits, disability benefits, performance awards, share or share-related awards, fringe benefits or other employee benefits or remuneration of any kind (including, but not limited to, any bonus, deferred compensation, share bonus, share purchase, restricted share, share option or other equity-based arrangement, and any employment, consulting, termination, retention, change in control or severance plan, scheme, program, policy, arrangement or contract), whether written or unwritten, funded or unfunded, in each case, sponsored, maintained, contributed to or required to be contributed to by the Company or any Subsidiary for the benefit of any current or former director, officer, employee, independent contractor or consultant of the Company or any Subsidiary or with respect to which the Company or any Subsidiary may have any Liability, whether actual or contingent.

 

 

  

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“Company Debt Facilities” means those agreements and related security agreements listed in Section 9.4(f)(i) of the Company Disclosure Letter.

“Company Disclosure Letter” means the disclosure letter dated on or prior to the date of this Agreement and delivered by the Company to, and acknowledged by, the Purchaser in connection with this Agreement, together with all of the documents contained in the Disclosure Bundle.

“Company Material Adverse Effect” means any of the following events occurring with respect to the Company or any Subsidiary:  (i) the permanent loss of any Vessel (whether or not covered by insurance); (ii) any Release of petroleum products by one of the Vessels that is reasonably likely to result in remediation costs in excess of $2.5 million (whether or not covered by insurance); (iii) any event that is reasonably likely to reduce the Actual Equity Amount (as calculated in accordance with this Agreement) by an amount in excess of $5 million; (iv) a cost to remedy or the creation of a new Liability of the Company or any Subsidiary in excess of $5 million; or (v) the reduction in the value of assets of the Company or any Subsidiary by an amount in excess of $5 million in the aggregate.  Notwithstanding the foregoing, the following events shall not be taken into account when determining the amounts in clauses (iii) or (v) above: (A) any change, development, event or occurrence arising out of or relating to general economic or financial market conditions, (B) any change, development, event or occurrence affecting the crude oil shipping industry generally, (C) changes in Applicable Law, SFRS or IFRS, (D) any change, development, event or occurrence arising out of or relating to natural catastrophe events, acts of terrorism, war (whether or not declared) or other hostilities (other than any such change, development, event or occurrence which directly affects one of the Vessels), (E) the announcement and pendency of this Agreement and the transactions contemplated hereby, (F) any action or failure to act on the part of Sellers or the Company or any Subsidiary required by this Agreement or requested or consented to in writing by Purchaser and (G) any action on the part of Purchaser or any of Purchaser’s affiliates, to the extent that any such effect described in the preceding clauses does not materially and disproportionately affect the Company and the Subsidiaries, taken as a whole, relative to other persons engaged in the shipping of crude oil.

“Contract” means any contract, lease, license, indenture, agreement, commitment or other legally binding arrangement.

“Disclosure Bundle” means all documents and other information included in the index attached to the Company Disclosure Letter, copies of which have been made available by the Company or the Sellers or their advisers to Purchaser or its advisers and are included in the physical disclosure bundle and initialed by the parties hereto on the date hereof.

“Employee” means any current or former employee of the Company or any Subsidiary.

“Environmental Laws” means all in force laws (including common law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices, Permits, treaties or binding Contracts issued, promulgated or entered into by any Governmental Entity which are applicable to the Company or any Subsidiary or any of their respective assets or businesses and which relate in any way to the environment, preservation or reclamation of natural resources, the presence, management, Release of, or exposure to, Hazardous Materials, or to human health and safety.

 

 

  

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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Existing Employees” means Bengt Hermelin, Borzou Aram, Joan Blake, Rakesh Lamba, Navinder Singh and Celina Yeo.

“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any rules, regulations and guidance promulgated thereunder.

“Fundamental Company Warranties” means those Warranties set out in Section 3.01(a), Section 3.02(a) to (d) (inclusive) and Section 3.07(a).

“Fundamental Seller Warranties” means those Warranties set out in Section 2.01, Section 2.02, Section 2.03 and Section 2.06.

“Goodwood” means Goodwood Ship Management Pte. Ltd.

“Goodwood JV” means the joint venture agreement relating to Goodwood between the Company, Grover Shipping (Bahamas) Ltd, Ashok Ramkrishna Sabnis and Goodwood dated 31 December 2008.

“Goodwood Shares” means the 280,000 ordinary shares in the capital of Goodwood held by the Company.

“Governmental Entity” means any government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

“Hazardous Materials” means any petroleum or petroleum products, radioactive materials or wastes, asbestos in any form, polychlorinated biphenyls, phthalates, lead, mercury, chromium, hazardous or toxic substances and any other chemical, material, substance or waste that is prohibited, limited or regulated under any Environmental Law.

“IFRS” means International Financial Reporting Standards, as promulgated by the International Accounting Standards Board.

“Intellectual Property” means any patent (including all reissues, divisions, continuations and extensions thereof), patent application, patent right, trademark, trademark registration, trademark application, servicemark, trade name, business name, brand name, copyright, copyright registration, design, design registration, domain name registrations (if any) or any right to any of the foregoing.

“Liability” means any and all liabilities, obligations, debts and commitments of any kind, character or description.

 

 

  

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“Liens” means any mortgage, lien, charge, encumbrance, pledge or security interest of any kind.

“Losses” means loss, liability, claim, damage or expense (other than legal fees and expenses).

“Maritime Guideline” means any rule, code of practice, convention, protocol, guideline or similar requirement or restriction concerning or relating to a Vessel, and to which a Vessel is subject, imposed or published by any Governmental Entity, the International Maritime Organization, such Vessel’s classification society or the insurer of such Vessel.

“New Service Contracts” means the new three-year employment contracts to be entered into between the Existing Employees and the Company.

“Non-Vessel Subsidiaries” means Samco Alpha Ltd., Samco Beta Ltd. and Samco (Cayman) Ltd., details of which are set out in Part B of Schedule 2.

“person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

“POA Sellers” mean each of Baho Abdullah T Bakhsh, Hawazen Abdullah T Bakhsh, Omnia Abdullah T Bakhsh and Samaual Abdullah T Bakhsh.

“Poten Arrangements” means the agreement between the Sellers and Poten & Partners relating to the payment by the Sellers to Poten & Partners of a broker fee in the event the Acquisition reaches financial and legal closing.

“Provisional Equity Amount” means $317,005,000.

“Regulatory Approvals” means any approvals, filings or notifications required by any Governmental Entity having jurisdiction over the Company, the Subsidiaries, Sellers, or Purchaser in connection with the consummation of the transactions contemplated by this Agreement.  As of the date of this Agreement, the parties hereto do not believe any such approvals, filings or notifications exist.

“Release” means any actual release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within any building, structure, facility or fixture.

“Relevant Claim” means a claim by Purchaser under or in respect of this Agreement, including any claim with respect to any breach of warranty, covenant or agreement of Sellers contained in this Agreement.

“Respective Percentage” means, in respect of any Seller, the percentage set out against their name in column (E) of the table in Schedule 1.

“SEC” means the U.S. Securities and Exchange Commission.

 

 

  

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“Securities Act” means the U.S. Securities Act of 1933, as amended.

“SFRS” means Singapore Financial Reporting Standards, as promulgated by the Accounting Standards Council of Singapore.

“Singapore Companies Act” means the Companies Act, Chapter 50 of Singapore.

“Singapore Properties” means:  (a) the office premises sub-leased and leased by the Company at #02-23/24, 20 Science Park Road,  Teletech Park, Singapore Science Park II, Singapore 117674 pursuant to a tenancy agreement between the Company and Teletech Park Pte. Ltd.; and (b) the residential premises occupied by certain employees and for which the Company is the named tenant in the associated tenancy agreements.

A “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, more than 50% of the equity interests of which) is owned directly or indirectly by such first person or by another subsidiary of such first person.

“Tax” means (a) all taxes, charges, fees, duties, customs, tariffs, imposts, payments in lieu, levies or other assessments or charges in the nature of a tax or any other similar payment imposed by any Taxing Authority, including income, license, recording, occupation, environmental, customs duties, single business, margin, unemployment, disability, mortgage, inventory, alternative or add-on minimum, profits, receipts, premium, excise, property, sales, use, transfer, franchise, payroll, withholding, social security, estimated or other taxes and (b) any interest, penalty, fine or addition to any of the foregoing, whether disputed or not.

“Tax Return” means any national, local, provincial or state Tax report, return (including information return), claim for refund, election, notice, estimated Tax filing, declaration, statement, schedule, form, request or other document (including any related or supporting information or any amendment to any of the foregoing) supplied to, required to be filed with or required to be maintained by any Taxing Authority with respect to Taxes, including any return or filing made on a consolidated, group, combined, unified or affiliated basis.

“Taxing Authority” means any Governmental Entity having primary jurisdiction over the assessment, determination, collection or imposition of any Tax on the Company or any Subsidiary.

“Third Party Consents” means the Consents of third parties listed in Section 9.4(f)(ii) of the Company Disclosure Letter.

“UK Bribery Act” means the U.K. Bribery Act 2010, as amended, and any rules, regulations and guidance promulgated thereunder.

“Vessel” or “Vessels” means the vessels owned by the Company or its Subsidiaries as set out in Schedule 2, Part D.

 

 

  

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SECTION 9.05.      Consents and Approvals.  For any matter under this Agreement requiring the consent or approval of any party to be valid and binding on the parties hereto, such consent or approval must be in writing.

SECTION 9.06.      Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

SECTION 9.07.      Entire Agreement.

(a)           This Agreement, the Company Disclosure Letter and the Confidentiality Agreement, along with the Schedules and Exhibits hereto and thereto, constitute the whole and only agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements, whether oral or in writing, among the parties relating to the subject matter hereof.

(b)           Each party hereto acknowledges that, in entering into this Agreement, it is not relying upon any pre-contractual statement that is not set forth in this Agreement, the Company Disclosure Letter or the Confidentiality Agreement, along with the Schedules and Exhibits hereto and thereto, and that, except in the case of fraud, no party hereto shall have any right of action against any other party hereto arising out of or in connection with any pre-contractual statement, except to the extent that such statement is repeated in this Agreement, the Company Disclosure Letter or the Confidentiality Agreement, along with the Schedules and Exhibits thereto.

(c)           For the purposes of this Section 9.07, “pre-contractual statement” means any agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, and any draft of any of the foregoing, whether or not in writing, relating to the subject matter of this Agreement made or given by any person at any time prior to the time at which this Agreement becomes legally binding.

SECTION 9.08.      Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Applicable Law, or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party or such party waives its rights under this Section 9.08 with respect thereto.  Upon any determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated by this Agreement are fulfilled to the extent possible.

SECTION 9.09.      Enforcement; Arbitration.  (a)  The parties agree that irreparable damage may occur in the event that any of the material provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of competent jurisdiction, without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled at law or in equity.  The right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of Sellers or Purchaser would have entered into this Agreement.  Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other parties hereto have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or in equity.  The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 9.09 shall not be required to provide any bond or other security in connection with any such order or injunction, and the party opposing such injunction or injunctions hereby agrees that it shall not contest the amount or absence of any such bond or other security requested or offered by the party seeking such injunction or injunctions.

 

 

  

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(b)           Any dispute arising out of or in connection with this Agreement or the Company Disclosure Letter, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the arbitration rules of the International Chamber of Commerce (the “ICC”), which rules are deemed to be incorporated by reference into this Section 9.09 (the “ICC Rules”).  The number of arbitrators shall be three.  Purchaser shall nominate one arbitrator and Sellers shall jointly nominate one arbitrator in accordance with the ICC Rules, and the President of the arbitral tribunal shall be jointly nominated by the two party-nominated arbitrators.    If the party-nominated arbitrators fail to jointly nominate the President within 30 days of their confirmation as arbitrators, either of Sellers or Purchaser may request the ICC International Court of Arbitration to appoint the President.  The seat, or legal place, of arbitration shall be London.  The language to be used in the arbitral proceedings shall be English.  The governing law of the arbitration agreement shall be the laws of England and Wales.

(c)            Any award rendered by the arbitrators shall be final, binding and unappealable, except as provided under the governing law, and judgment may be entered on any such award by any court having competent jurisdiction.

(d)            In its award the arbitrators shall allocate, in their discretion, among the parties to the arbitration all costs of the arbitration, including the fees and expenses of the arbitrators and reasonable attorney’s fees, costs and expert witness expense of the parties.

(e)            Each Seller irrevocably appoints Norose Notices Limited of 3 More London Riverside, London SE1 2AQ as its agent in England for service of process in relation to any court proceedings pursuant to subclause (a) or (c) above.

(f)            Purchaser irrevocably appoints Cravath, Swaine & Moore LLP of CityPoint, One Ropemaker Street, London EC2Y 9HR, as its agent in England for service of process in relation to any court proceedings pursuant to subclause (a) or (c) above.

 

 

  

49

  

 

SECTION 9.10.      Governing Law.  This Agreement, and all matters, claims or causes of action (whether in contract or tort) based upon, arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the laws of England and Wales, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

SECTION 9.11.      Waiver of Jury Trial.  Each party hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or any transaction contemplated hereby.  Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waivers and certifications in this Section 9.11.

SECTION 9.12.      Language.  The language of this Agreement and the transactions contemplated hereby is English and all notices to be given in connection with this Agreement must be in English.  All demands, requests, statements, certificates or other documents or communications to be provided in connection with this Agreement and the transactions contemplated hereby must be in English or accompanied by a certified English translation, in which case the English translation shall prevail unless the document or communication is a statutory or other official document or communication.

[Signature Pages Follow]

 

 

  

50

  

 

IN WITNESS WHEREOF, each of the Sellers and Purchaser have duly executed this Agreement as of the date first written above.

	
SIGNED by SVEIN MOXNES 

 

HARFJELD

 

for and on behalf of

 

DHT HOLDINGS, INC.,

 

in the presence of:

	
)

 

)

 

)

 

)

	
 

 

 

/s/ Svein Moxnes Harfjeld

..................................................................................

(Authorised Signatory)

 

	
 

 

.........................................................

Witness name:

Address:

	  	  

 

	
SIGNED by

 

BENGT AXEL OLOF HERMELIN

 

as duly authorized attorney for

 

SAMAUAL ABDULLAH T BAKHSH

 

in the presence of:

	
)

 

)

 

)

 

)

	
 

 

 

/s/ Bengt Axel Olof Hermelin

...........................................................................................

 

	
 

 

..........................................................

Witness name:

Address:

	  	  

 

[Signature Page to Share Purchase Agreement]

 

 

  

  

  

 

 

	
SIGNED by

 

BENGT AXEL OLOF HERMELIN

 

as duly authorized attorney for

 

BAHO ABDULLAH T BAKHSH

 

in the presence of:

	
)

 

)

 

)

 

)

	
 

 

 

/s/ Bengt Axel Olof Hermelin

...........................................................................................

 

	
 

 

..........................................................

Witness name:

Address:

	  	  

	
SIGNED by

 

BENGT AXEL OLOF HERMELIN

 

as duly authorized attorney for

 

HAWAZEN ABDULLAH T BAKHSH

 

in the presence of:

	
)

 

)

 

)

 

)

	
 

 

 

/s/ Bengt Axel Olof Hermelin

...........................................................................................

 

	
 

 

..........................................................

Witness name:

Address:

	  	  

 

[Signature Page to Share Purchase Agreement]

  

  

  

 

 

	
SIGNED by

 

BENGT AXEL OLOF HERMELIN

 

as duly authorized attorney for

 

OMNIA ABDULLAH T BAKHSH 

 

in the presence of:

	
)

 

)

 

)

 

)

	
 

 

 

/s/ Bengt Axel Olof Hermelin

...........................................................................................

 

	
 

 

.........................................................

Witness name:

Address:

	  	  

	
SIGNED by 

 

BENGT AXEL OLOF HERMELIN

 

in the presence of:

	
)

 

)

	
 

/s/ Bengt Axel Olof Hermelin

...........................................................................................

	
 

 

.........................................................

Witness name:

Address:

 

	  	  

 

[Signature Page to Share Purchase Agreement]

 

 

  

  

  

 

INDEX OF DEFINED TERMS

 

 

	
Term

	
Section

	
Acquisition

	
Section 1.01(c)

	
Actual Equity Amount

	
Section 9.04(f)

	
affiliate

	
Section 9.04(f)

	
Agreement

	
Preamble

	
Applicable Law

	
Section 9.04(f)

	
Audited Financial Statements

	
Section 3.05(a)

	
Balance Sheet Date

	
Section 3.05(a)

	
Business Day

	
Section 9.04(f)

	
Closing

	
Section 1.03

	
Closing Date

	
Section 1.03

	
Code

	
Section 9.04(f)

	
Company

	
Recitals

	
Company Articles

	
Section 3.01(b)

	
Company Benefit Plans

	
Section 9.04(f)

	
Company Debt Facilities

	
Section 9.04(f)

	
Company Disclosure Letter

	
Section 9.04(f)

	
Company Material Adverse Effect

	
Section 9.04(f)

	
Company Memorandum of Association

	
Section 3.01(b)

	
Confidentiality Agreement

	
Section 5.03

	
Consent

	
Section 2.04(b)

	
Contract

	
Section 9.04(f)

	
control

	
Section 9.04(f)

	
controlled

	
Section 9.04(f)

	
controlling

	
Section 9.04(f)

	
Disclosure Bundle

	
Section 9.04(f)

	
Employee

	
Section 9.04(f)

	
Environmental Laws

	
Section 9.04(f)

	
Escrow Agent

	
Section 1.04(d)

	
Escrow Agreement

	
Section 1.04(d)

	
Escrow Amount

	
Section 1.04(d)

	
Escrow Fund

	
Section 1.04(d)

	
Exchange Act

	
Section 9.04(f)

	
Existing Employees

	
Section 9.04(f)

	
Existing Service Contracts

	
Section 3.15(a)

	
FCPA

	
Section 9.04(f)

	
Financial Statements

	
Section 3.05(c)

	
Fundamental Company Warranties

	
Section 8.01(a)

	
Fundamental Seller Warranties

	
Section 8.01(a)

	
Goodwood

	
Section 9.04(f)

	
Goodwood Audited Financial Statements

	
Section 3.05(e)

	
Goodwood JV

	
Section 9.04(f)

	
Goodwood Shares

	
Section 9.04(f)

 

 

  

1

  

 

 

	Term	
Section

	
Goodwood Unaudited Management Accounts

	
Section 3.05(e)

	
Governmental Entity

	
Section 9.04(f)

	
Hazardous Materials

	
Section 9.04(f)

	
ICC

	
Section 9.09(b)

	
ICC Rules

	
Section 9.09(b)

	
IFRS

	
Section 9.04(f)

	
Initial Purchase Price

	
Section 1.01(c)(i)

	
Intellectual Property

	
Section 9.04(f)

	
Judgment

	
Section 2.04(a)

	
Legal Restraint

	
Section 6.01(a)

	
Liability

	
Section 9.04(f)

	
Liens

	
Section 9.04(f)

	
Listed Contract

	
Section 3.10(b)

	
Losses

	
Section 9.04(f)

	
Maritime Guideline

	
Section 9.04(f)

	
Maximum Liability Amount

	
Section 8.01(a)

	
New Service Contracts

	
Section 9.04(f)

	
Non-Vessel Subsidiaries

	
Section 9.04(f)

	
Ordinary Shares

	
Section 3.02(a)(i)

	
Outside Date

	
Section 7.01(a)(ii)(1)

	
Permits

	
Section 3.11(a)

	
Permitted Liens

	
Section 3.07(a)

	
person

	
Section 9.04(f)

	
POA Attorney

	
Recitals

	
POA Sellers

	
Section 9.04(f)

	
Poten Arrangements

	
Section 9.04(f)

	
Power of Attorney

	
Recitals

	
pre-contractual statement

	
Section 9.07(c)

	
Proceeding

	
Section 3.11(c)

	
Provisional Equity Amount

	
Section 9.04(f)

	
Purchase Price

	
Section 1.01(c)

	
Purchaser

	
Preamble

	
Purchaser Equity Financing

	
Section 5.09

	
Purchaser Material Adverse Effect

	
Section 4.01

	
Regulatory Approvals

	
Section 9.04(f)

	
Release

	
Section 9.04(f)

	
Relevant Claim

	
Section 9.04(f)

	
Respective Percentage

	
Section 9.04(f)

	
SEC

	
Section 9.04(f)

	
Securities Act

	
Section 9.04(f)

	
Seller

	
Preamble

	
Seller Material Adverse Effect

	
Section 2.04(a)

	
Seller Shares

	
Recitals

 

 

  

2

  

 

 

	Term 	Seller
	
Sellers

	
Preamble

	
Sellers Representative

	
Section 1.04(d)

	
Sellers Warranties

	
Article III

	
SFRS

	
Section 9.04(f)

	
Shares

	
Recitals

	
Singapore Companies Act

	
Section 9.04(f)

	
Singapore Properties

	
Section 9.04(f)

	
subsidiary

	
Section 9.04(f)

	
Subsidiary

	
Section 3.01(a)

	
Tax

	
Section 9.04(f)

	
Tax Return

	
Section 9.04(f)

	
Taxing Authority

	
Section 9.04(f)

	
Third Party Claim

	
Section 8.04(a)

	
Third Party Consents

	
Section 9.04(f)

	
Transfer Taxes

	
Section 5.05(b)

	
UK Bribery Act

	
Section 9.04(f)

	
Unaudited Financial Statements

	
Section 3.05(c)

	
Vessel

	
Section 9.04(f)

	
Vessels

	
Section 9.04(f)

	
Voting Company Debt

	
Section 3.02(b)

	
Year End Balance Sheet

	
Section 3.06(a)

 

  

3

  

Schedule 1

List of Sellers

	
 

 

A

	
 

 

B

	
 

 

C

 

	
 

 

D

	
 

 

E

	
 

 

Seller

	
 

 

Address

	
 

 

Number of Sale Shares held

	
 

 

Amount of Initial Purchase Price (less Amount of Escrow Amount)

	
 

 

Respective Percentage

	
SAMAUAL

ABDULLAH T 

BAKHSH

	
 

	
 

	
$118,561,900

	
 

	 	 	 	 	 
	
BAHO 

ABDULLAH T 

BAKHSH

	
 

	 	
$59,280,950

	 
	 	 	 	 	 
	
HAWAZEN 

ABDULLAH T 

BAKHSH

	
 

	
 

	
$59,280,950

	 
	 	 	 	 	 
	
OMNIA 

ABDULLAH T 

BAKHSH

	
 

	 	
$59,280,950

	
 

	 	 	 	 	 
	
BENGT 

AXEL OLOF 

HERMELIN

	
 

	
 

	
$15,600,250

	 
	
 

Total

	  	
 

 

	
 

$312,005,000

	
 

  

4

  

Schedule 2

 

Company and Subsidiaries

 

Part A – The Company

 

 

	
Date and place of incorporation

	
25 July 2008

 

Singapore

 

	
Registered number

	
200814598E

 

	
Registered office

	
80 Raffles Place

#32-01

UOB Plaza

Singapore (048624)

 

	
Issued share capital

	
5100 Ordinary Shares fully paid

 

	
Directors

	
Bengt Axel Olof Hermelin (Managing Director)

 

Samaual Abdullah T Bakhsh

 

Omnia Abdullah T Bakhsh

 

Loke Mun-Tze Jacqueline Joelle

 

	
Secretary

	
M Sivaananthan

 

Loke Mun-Tze Jacqueline Joelle

 

 

 

  

5

  

 

Part B – The Subsidiaries

	
Name

	
SAMCO GAMMA LTD.

 

	

Date and place of 

incorporation

	
1 May 2001 – Cayman Islands

	
Registered number

	
109904

	
Authorised share capital

	
USD$50,000

	
Issued share capital

	
300 Ordinary Shares fully paid

	
Shareholder

	
No & class of shares

	
Registered holder

	
Beneficial owner

	  	
300 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

	
Name

	
SAMCO DELTA LTD.

	

Date and place of 

incorporation

	

14 JANUARY 2004 – Cayman Islands

	
Registered number

	

132067

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

200 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
200 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

	
Name

	
SAMCO EPSILON LTD.

	

Date and place of 

incorporation

	

14 JANUARY 2004 – Cayman Islands

	
Registered number

	

132064

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

200 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
200 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

 

  

6

  

 

	
Name

	
  

SAMCO ETA LTD.

	

Date and place of 

incorporation

	

9 JULY 2008 – Cayman Islands

	
Registered number

	

213929

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

300 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
300 Ordinary Shares

	
Samco Shipholding Pte. Ltd.

	
Samco Shipholding Pte. Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

	
Name

	
  

SAMCO KAPPA LTD.

	

Date and place of 

incorporation

	

9 JULY 2008 – Cayman Islands

	
Registered number

	

213860

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

300 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
300 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

	
Name

	
  

SAMCO THETA LTD.

	

Date and place of 

incorporation

	

9 APRIL 2010 – Cayman Islands

	
Registered number

	

239259

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

400 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
400 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

  

7

  

 

 

	
Name

	
  

SAMCO IOTA LTD.

	

Date and place of 

incorporation

	

9 APRIL 2010 – Cayman Islands

	
Registered number

	

239276

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

300 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
300 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

	
Name

	
  

SAMCO ALPHA LTD.

	

Date and place of 

incorporation

	

14 AUGUST 2000 – Cayman Islands

	
Registered number

	

103195

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

200 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
200 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

	
Name

	
  

SAMCO BETA LTD.

	

Date and place of 

incorporation

	

14 AUGUST 2000 – Cayman Islands

	
Registered number

	

103194

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

100 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
100 Ordinary Shares

	

Samco 

Shipholding Pte. 

Ltd.

	

Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

  

8

  

 

	
Name

	
  

SAMCO (CAYMAN) LTD.

	
Date and place of 

incorporation

	

24 MAY 1996 – Cayman Islands

	
Registered number

	

66291

	
Authorised share capital

	

USD$50,000

	
Issued share capital

	

200 Ordinary Shares fully paid

	
Shareholder

	

No & class of shares

	
Registered holder

	
Beneficial owner

	 	
200 Ordinary Shares

	
Samco 

Shipholding Pte. 

Ltd.

	
Samco 

Shipholding Pte. 

Ltd.

	
Directors

	
Verita Limited (Chairman and Director); Integra Limited (Director)

	
Secretary

	
Reid Services Limited

 

  

9

  

 

Part C - Goodwood

	
Name

	
  

GOODWOOD SHIP MANAGEMENT PTE. LTD.

 

	
Date and place of 

incorporation

	

04/03/2008

Singapore

 

	
Registered number

	

200804341W

 

	
Issued share capital

	

560000 Ordinary Shares fully paid

 

	
Shareholder

	

No & class of shares

 

	
Registered holder

	
Beneficial owner

	 	
280000

	
Samco 

Shipholding Pte. 

Ltd.

	
Samco 

Shipholding Pte. 

Ltd.

 

	 	126000	
Ashok 

Ramkrishna 

Sabnis

 

	 -
	 	154000	
Grover Shipping 

(Bahamas) LTD.

 

	 -
	
Directors

	

Jan Petter Roed

 

  

Bengt Axel Olof Hermelin

 

  

Ashok Ramkrishna Sabnis

 

	
Secretary

	
M Sivaananthan

 

  

  

10

  

 

 

Part D - Vessels

	
Name of 

Vessel

 

	
Name 

of 

Owner

 

	
Year 

Built

 

	
Country of 

registration 

(flag)

 

	
Capacity 

(DWT)

 

(Scantling)

 

	
Classification 

society

 

	
Shipyard of 

construction

 

	
Samco 

Scandinavia 

S273

 

	
Samco 

Gamma 

Ltd.

 

	
2006

 

	
Republic of 

the Marshall 

Islands

 

	
318,000

 

	
ABS

 

	
Hyundai

 

	
Samco 

Europe

S274

 

	
Samco 

Delta 

Ltd.

 

	
2007

 

	

Republic of 

the Marshall 

Islands

	
318,000

 

	
DNV

 

	
Hyundai

 

	
Samco 

China

S275

 

	
Samco 

Epsilon 

Ltd.

 

	
2007

 

	
French International

Registry and 

Republic of 

Marshall Islands

 

	
318,000

 

	
DNV

 

	
Hyundai

 

	
Samco

Amazon

S501

 

	
Samco 

Eta

Ltd.

 

	
2011

 

	

French International

Registry and 

Republic of 

Marshall Islands

 

	
318,000

 

	
DNV

 

	
Hyundai

 

	
Samco 

Redwood

S502

 

	
Samco 

Kappa 

Ltd.

 

	
2011

 

	

French International

Registry and 

Republic of 

Marshall Islands

 

	
318,000

 

	
DNV

 

	
Hyundai

 

	
Samco 

Sundarbans 

S556

 

	
Samco 

Theta

 Ltd.

 

	
2012

 

	

Republic of 

the Marshall 

Islands

 

	
318,000

 

	
ABS

 

	
Hyundai

 

	
Samco 

Taiga

S557

 

	
Samco 

Iota 

Ltd.

 

	
2012

 

	

Republic of 

the Marshall 

Islands

 

	
318,000

 

	
ABS

 

	
Hyundai

 

 

 

  

11

  

 

Schedule 3

Actual Equity Amount Statement

Part A – Preparation

	
1

	
The parties shall procure that a draft of the Closing Statement (the “Draft Closing Statement”) shall be prepared by the Chief Financial Officer of the Company in accordance with this Schedule 3 and delivered to each of the Sellers and the Purchaser within three (3) calendar months of Closing.  Each of the Sellers and the Purchaser shall co-operate with the other with regard to the preparation, review, agreement or determination of the Draft Closing Statement and the Closing Statement and shall, subject to reasonable notice, make available during normal office hours to the other and its representatives and accountants all books and records of the Company as the other party may reasonably require.

	  	  	  
	
2

	
The Draft Closing Statement and the Closing Statement shall:

	  	  	  
	  	
(a)

	
be in the form set out in Part B of this Schedule 3 and shall include the assets and liabilities noted therein for the Company and the Subsidiaries on a consolidated basis and include a statement of the Actual Equity Amount; provided that (i) all Tax assets and Tax liabilities included in the Draft Closing Statement and the Closing Statement shall be stated in separate line items therein and (ii) the Draft Closing Statement and the Closing Statement shall not take into account any deferred Tax asset or any deferred Tax liability;

	  	  	  
	  	
(b)

	
be prepared in accordance with the principles and requirements set out in paragraphs 3 and 4 of Part A of this Schedule 3;

	  	  	  
	  	
(c)

	
subject to paragraph 2(b) above, be prepared using the same accounting principles, policies, bases, practices and estimation techniques as were used in the preparation of the Unaudited Financial Statements;

	  	  	  
	  	
(d)

	
subject to paragraphs 2(b) and 2(c) above, be prepared on a going concern basis in accordance with SFRS applied in a manner consistent with the Unaudited Financial Statements; and

	  	  	  
	  	
(e)

	
notwithstanding any other provision of this Schedule, provide a value of $580,000,000 for the Vessels line item.

	  	  	  
	
3

	
The Draft Closing Statement and the Closing Statement shall be drawn up according to the following principles:

	  	  	  
	  	
(a)

	
the Draft Closing Statement and the Closing Statement shall be drawn up as at close of business on the Closing Date.  Other than amounts owed to the Escrow Agent by the Sellers pursuant to the Escrow Agreement, no account shall be taken of events taking place after the close of business on the Closing Date, except to the extent that such events provide additional evidence as to the conditions existing at the Closing Date;

	  	  	  

 

 

 

 

 

  

12

  

 

 

	 	
(b)

	
Other than amounts owed to the Escrow Agent by the Sellers pursuant to the Escrow Agreement, no account shall be taken of events taking place on the Closing Date to effect Closing of this Agreement or any aspect of it;

	 	 	 
	 	
(c)

	
if any costs, fees and expenses incurred by the Company or any Subsidiary (i) associated with obtaining the Third Party Consents on or prior to the Closing Date in accordance with Section 5.04(b) or otherwise or (ii) in respect of work undertaken by the Company’s auditors at the request of the Purchaser or its advisers in connection with the Purchaser Equity Financing in accordance with Section 5.11 or otherwise, have not been paid or reimbursed by Purchaser as of the Closing Date, no account shall be taken in the Draft Closing Statement or the Closing Statement of the effect of such costs, fees or expenses;

	 	 	 
	 	
(d)

	
no account shall be taken in the Draft Closing Statement or the Closing Statement for any amount owed or due between the Company and its Subsidiaries, or between one Subsidiary and another Subsidiary.

 

	
4

	
The Draft Closing Statement and the Closing Statement shall be expressed in thousands of US Dollars (USD ‘000).  Amounts in other currencies shall be translated into US Dollars based on the prevailing exchange rate as at the Closing Date as derived from the website, www.oanda.com.

	  	  	  
	
5

	  	
As soon as practicable after the delivery of the Draft Closing Statement to the Sellers and the Purchaser in accordance with paragraph 1, and in any event within 60 calendar days of such delivery (the “Review Period”), the Sellers and the Purchaser shall review the Draft Closing Statement and each shall inform the other in writing of what adjustments (if any) they each propose be made to the Draft Closing Statement in order for the Draft Closing Statement to comply with the provisions of this Schedule 3.

	  	  	  
	
6

	
If neither the Sellers or the Purchaser proposes any adjustments to the Draft Closing Statement in writing within the Review Period or each confirms to the other that it has no adjustments to propose to the Draft Closing Statement within the Review Period, the Draft Closing Statement and the amount of the Actual Equity Amount specified in such Draft Closing Statement shall be the Closing Statement and the Actual Equity Amount as determined respectively for all purposes of this Agreement, shall be final and binding on the parties and shall not be subject to question on any ground whatsoever.

	  	  	  
	
7

	
If, during the Review Period, either the Purchaser or the Sellers give written notice to the other(s) in accordance with paragraph 5 of adjustments proposed to be made to the Draft Closing Statement or any item thereof (a “Disagreement Notice”), and the other party agrees with all of the adjustments proposed, such adjustments shall be included in the Draft Closing Statement and the Draft Closing Statement (as so adjusted) and the amount of the Actual Equity Amount specified in such Draft Closing Statement shall be the Closing Statement and the Actual Equity Amount as determined respectively for all purposes of this Agreement, shall be final and binding on the parties and shall not be subject to question on any ground whatsoever.

	  	  	  

 

 

 

  

13

  

 

 

	
8

	
If any party does not agree with any of the adjustments proposed by any other party in any Disagreement Notice within 30 calendar days of delivery to it of a Disagreement Notice, the Sellers and the Purchaser shall agree in writing (the “Joint Disagreement Notice”) which aspects of the Draft Closing Statement should be referred for determination to KPMG LLP or, if it is unable or unwilling to act in such capacity, PricewaterhouseCoopers LLP, or such other accountants as shall be agreed in writing by Purchaser and Sellers (the “Reporting Accountants”).  The Joint Disagreement Notice shall set out each party’s objections and attach any such information and material as is necessary to support such objections.  Such matter or matters as set out in the Joint Disagreement Notice (but no other matters) shall then be referred by the Purchaser and the Sellers jointly to the Reporting Accountants for determination.

	  	  	  
	
9

	
If the Sellers and the Purchaser are unable to agree on the terms of the Joint Disagreement Notice within 30 calendar days of delivery to the others of a Disagreement Notice, any of the Sellers or the Purchaser may by notice to the other parties require that the Draft Closing Statement be referred to the Reporting Accountants (the “Appointment Notice”).

	  	  	  
	
10

	
The Reporting Accountants shall determine the dispute on the following basis:

	  	  	  
	  	
(a)

	
the Reporting Accountants shall be instructed to notify the Sellers and the Purchaser of their determination of any matter specified in the Joint Disagreement Notice or (in the case where the parties are unable to agree on the terms of the Joint Disagreement Notice) the Purchaser’s Disagreement Notice and/or the Sellers’s Disagreement Notice within 30 calendar days of the Joint Disagreement Notice or the Appointment Notice being served (as the case may be);

	  	  	  
	  	
(b)

	
each of the Sellers and the Purchaser shall be entitled to make written submissions to the Reporting Accountants, but subject thereto the Reporting Accountants shall have power to determine the procedure to be followed in relation to their determination;

	  	  	  
	  	
(c)

	
in making their determination the Reporting Accountants shall act as experts and not as arbitrators, their decision as to any matter of fact referred to them for determination shall be final and binding in all respects on the parties and shall not be subject to question on any ground whatsoever (save in the event of manifest error (in which case the relevant part of their determination shall be void and the matter shall be remitted to the Reporting Accountants for correction)); and

	  	  	  
	  	
(d)

	
the fees and expenses (including the cost of any value-added, sales or similar Tax) of the Reporting Accountants shall be borne equally between the Purchaser (on the one hand) and the Sellers (on the other hand).

	  	  	  
	
11

	
The determination of the Reporting Accountants pursuant to paragraphs 8 to 11 shall:

	  	  	  
	  	
(a)

	
be made in writing and delivered to the Sellers and the Purchaser; and

	  	  	  

 

 

  

14

  

 

 

	  	
(b)

	
unless otherwise agreed in writing by the Sellers and the Purchaser, include reasons for each relevant determination.

	  	  	  
	
12

	
The Purchaser and the Sellers shall enter into an appropriate form of appointment of the Reporting Accountants as soon as reasonably practicable (and in any event within 10 Business Days) following the  delivery of the Joint Disagreement Notice or the Appointment Notice (as the case may be) and the Purchaser and Sellers shall act reasonably in agreeing the terms and conditions of such appointment, including in respect of fees and any exclusions and limitations of liability where it can be reasonably demonstrated that such terms and conditions reflect market standard provisions for such appointments.

	  	  	  
	
13

	
Following any determination by the Reporting Accountants pursuant to paragraphs 8 to 11, the Purchaser and Sellers shall jointly incorporate into and reflect in the Draft Closing Statement the matters determined by the Reporting Accountants and the Draft Closing Statement (as so adjusted) and the amount of the Actual Equity Amount stated in such Draft Closing Statement shall be the Closing Statement and the Actual Equity Amount respectively for all purposes of this Agreement and shall be final and binding on the parties and shall not be subject to question on any ground whatsoever (save in the event of manifest error (in which case the relevant part of the Reporting Accountant’s determination shall be void and the matter shall be remitted to the Reporting Accountants for correction)).

	  	  	  
	
14

	
Until the Actual Equity Amount has been determined pursuant to this Schedule 3, the Sellers and the Purchaser shall respectively:

	  	  	  
	  	
(a)

	
co-operate with the Reporting Accountants and comply with their reasonable requests made in connection with the carrying out of their duties under this Schedule 3.  In particular, the Purchaser shall, subject to reasonable notice, make available during normal office hours to the Reporting Accountants all books and records relating to the Company and the Subsidiaries as the Reporting Accountants may reasonably request during the period from the appointment of the Reporting Accountants down to the making of the relevant determination; and

	  	  	  
	  	
(b)

	
generally provide the Reporting Accountants with such other information and assistance as they may reasonably require (including access to and assistance at reasonable times from personnel employed by the Sellers, the Company or the Purchaser, as the case may be).

	  	  	  
	
15

	
Nothing in this Schedule 3 shall entitle a party or the Reporting Accountants access to any information or document which is protected by legal professional privilege or litigation privilege, provided that neither the Sellers nor the Purchaser shall be entitled to refuse to supply such part or parts of documents as contain only the facts on which the relevant claim or argument is based.

	  	  	  

 

 

  

15

  

 

 

	
16

	
Each of the Sellers and the Purchaser shall, and shall procure and ensure that its accountants and other advisers and the Reporting Accountants shall, keep all information and documents provided to them pursuant to this Schedule 3 confidential and shall not use the same for any purpose, except for disclosure or use in connection with the preparation of the Draft Closing Statement, the Closing Statement, any Disagreement Notice, any Joint Disagreement Notice or any Appointment Notice, the proceedings of the Reporting Accountants or another matter arising out of this Agreement or in defending any claim or argument or alleged claim or argument relating to this Agreement or its subject matter.  For the avoidance of doubt, the foregoing shall not limit or in any way restrict the disclosure or use by Purchaser or its affiliates of the Audited Financial Statements or the Unaudited Financial Statements.

 

 

  

16

  

Part B - Form of Actual Equity Statement

	  	  	  	
30 June 2014

	 	  	 	
Closing Date

	  	  	  	
USD’000

	 	  	 	
USD’000

	
 Non-current assets

	  	  	 	  	 	  
	
 Vessels

	
580,000

	 	  	 	
580,000

	
 Property, plant and equipment

	
19

	 	  	 	  
	
 Subsidiaries

	  	
0

	 	  	 	  
	
 Associates and Joint Ventures

	  	
963

	 	  	 	  
	  	  	  	
580,982

	 	  	 	  
	  	  	  	  	 	  	 	  
	
 Current assets

	  	  	 	  	 	  
	
 Assets held for sale

	  	
0

	 	  	 	  
	
 Inventory

	  	  	
2,190

	 	  	 	  
	
 Trade and other receivables

	
14,613

	 	  	 	  
	
 Cash and cash equivalents

	
58,748

	 	  	 	  
	  	  	  	
75,551

	 	  	 	  
	  	  	  	  	 	  	 	  
	
 Total assets

	  	
656,533

	 	  	 	  
	  	  	  	  	 	  	 	  
	
 Non-current liabilities

	  	 	  	 	  
	
 Loans and borrowings

	
269,989

	 	  	 	  
	
 Derivative financial liabilities

	
8,082

	 	  	 	  
	  	  	  	
278,071

	 	  	 	  
	  	  	  	  	 	  	 	  
	
 Current liabilities

	  	  	 	  	 	  
	
 Trade and other payables

	
8,540

	 	  	 	  
	
 Loans and borrowings

	
48,677

	 	  	 	  
	
 Derivative financial liabilities

	
4,233

	 	  	 	  
	
 Taxation payable

	
7

	 	  	 	  
	  	  	  	
61,457

	 	  	 	   
	
 Total liabilities

	  	
339,528

	 	  	 	  
	  	  	  	  	 	  	 	  
	
 Net assets

	  	
317,005

	 	  	 	   
	  	  	  	  	 	  	 	  
	
 Provisional Equity Amount

	
USD

	
 

317,005,000

	 	
Actual 

Equity 

Amount

	 	  

 

 

 

  

17

  

 

 

Exhibit A

Form of Escrow Agreement

 

 

 

 

  

  

  

 

 

Exhibit A

   

 

	Confidential	EXECUTION COPY

 

 

 

	 	
Dated

 

	
September 2014

 

	 

 

 

 

BENGT AXEL OLOF HERMELIN

(AS TRUSTEE FOR THE SELLING SHAREHOLDERS OF

SAMCO SHIPHOLDING PTE. LTD.)

 

and

 

DHT HOLDINGS, INC.

 

and

 

ING BANK N.V., SINGAPORE BRANCH

 

 

 

 

 

 

ESCROW AGREEMENT

 

  

  

  

 

 

Contents

 

	Clause 	Page

 

	
1

	
Interpretation

	
1

	
2

	
Appointment and Fess

	
2

	
3

	
Escrow Account

	
3

	
4

	
Payment of the Escrow Sum into the Escrow Account

	
3

	
5

	
Release from Escrow Account and Termination

	
3

	
6

	
Final Payment Date

	
4

	
7

	
Notices

	
5

	
8

	
Duration and Termination

	
6

	
9

	
Miscellaneous

	
7

	
10

	
Governing law

	
8

	
11

	
Jurisdiction

	
8

	  	  	  
	
Schedule 1 Escrow Account and Conditions

	
10

	
Schedule 2 Authorised Signatories and Call Back

	
11

	
Schedule 3 Relevant Instruction

	
13

 

  

  

  

 

THIS ESCROW AGREEMENT is dated 9 September 2014 and is made

 

BETWEEN:

 

	
(1)   

	
BENGT OLAF HERMELIN (passport number: 82504892) whose address is at 201 Ocean Drive #01-17, 098584 Singapore) (Bengt Hermelin), in his capacity as trustee for the selling shareholders (Sellers) of Samco Shipholding Pte. Ltd., a private company limited by shares incorporated under the laws of the Republic of Singapore, in accordance with the terms, and for the purposes only, of that certain Share Purchase Agreement, dated September 9, 2014; between the Sellers and DHT (the Share Purchase Agreement);

 

	
(2)   

	
DHT Holdings, Inc. a company incorporated in the Marshall Islands (company registration number 39572 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960) (DHT); and

 

	
(3)   

	
ING Bank N.V., Singapore Branch (Escrow Agent or Escrow Bank).

 

	
1   

	
Interpretation

 

	
1.1    

	
In this Escrow Agreement:

 

	
   

	
Authorised Signatories means for each of DHT and Bengt Hermelin, the persons set out against their respective names in Schedule 2

 

	
   

	
Business Day means any day, other than a Saturday or a Sunday, on which commercial banks in New York, Singapore and Bermuda, are open for normal banking business

 

	
   

	
Escrow Account means the deposit account opened with the Escrow Bank on or before the date of this Escrow Agreement, details of which are set out in Schedule 1

 

	
   

	
Escrow Agreement means this agreement, its recitals and its schedules

 

	
   

	
Escrow Sum means the sum of US$5,000,000

 

	
   

	
Escrow Fund means the amount of the Escrow Sum in the Escrow Account at any time, including any interest thereon

 

	
   

	
Parties means the parties to this Escrow Agreement, and Party means any one of them

 

	
   

	
Relevant Instruction means a joint instruction in writing from DHT and Bengt Hermelin in the form set out in Schedule 3

 

 

  

1

  

 

 

	
   

	
US$ or United States Dollar means the lawful currency of the United States of America from time to time

 

	
1.2   

	
Any reference to a statute or statutory provision is a reference to it as it is in force for the time being, taking account of any change, extension, consolidation or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

	
1.3   

	
Unless the context otherwise requires:

 

	
  

	
(a)

	
words in the singular include the plural and words in the plural include the singular;

 

	
  

	
(b)

	
words denoting any gender include all other genders;

 

	
  

	
(c)

	
any reference to persons includes individuals, bodies corporate, companies, partnerships, unincorporated associations, firms, trusts and all other legal entities;

 

	
  

	
(d)

	
any reference to a Party is to a party to this Escrow Agreement; and

 

	
  

	
(e)

	
any reference to time shall be to London time.

 

	
1.4   

	
Clause headings are for convenience only and do not affect the interpretation of this Escrow Agreement.  Any reference to a clause, sub-clause, paragraph or Schedule is to the relevant clause, sub-clause, paragraph or Schedule of this Escrow Agreement.  The Schedules to this Escrow Agreement shall for all purposes form part of this Escrow Agreement.

 

	
2   

	
Appointment and Fees

 

	
2.1   

	
DHT and Bengt Hermelin hereby appoint the Escrow Agent as their agent to carry out the tasks assigned to the Escrow Agent in this Escrow Agreement in accordance with its terms, and the Escrow Agent agrees to the terms of that appointment.

 

	
2.2   

	
DHT and Bengt Hermelin agree that the consideration for the performance by the Escrow Agent of its obligations under this Escrow Agreement (including the review, negotiation and execution of this Escrow Agreement, opening of the Escrow Account, completion of any know your customer documentation, maintenance of the Escrow Account and all ancillary administrative duties) shall be the fixed fee payment of US$10,000 (the Escrow Fee), payable 50% by DHT and 50% by the Sellers (the Sellers’ Share).  DHT shall pay the full amount of the Escrow Fee to the Escrow Agent simultaneously with the Escrow Sum being deposited in the Escrow Account in accordance with clause 4.1; provided, however, that DHT and Bengt Hermelin agree that the Sellers’ Share shall thereafter be deducted from the Actual Equity Amount (as such term is defined in the Share Purchase Agreement).

 

 

  

2

  

 

 

	
3   

	
Escrow Account and Conditions

 

	
   

	
On or before the date of this Escrow Agreement, the Escrow Bank shall set up the Escrow Account with the details set out in Schedule 1 (subject to other Parties entering into all necessary account opening documents as required by the Escrow Bank).

 

	
   

	
This Escrow Agreement shall take effect on and from the date (the Effective Date) that the Escrow Agent notifies the other Parties that it has received all of the documents and evidence listed in Schedule 1 in form and substance satisfactory to the Escrow Agent. The Escrow Agent shall notify the other Parties promptly upon being so satisfied.

 

	
4   

	
 Payment of the Escrow Sum into the Escrow Account

 

	
4.1   

	
On or before the date of this Escrow Agreement, DHT shall pay the Escrow Sum into the Escrow Account, whereupon the Escrow Sum shall be held by the Escrow Agent in accordance with, and subject to, the provisions of this Escrow Agreement.

 

	
4.2   

	
The Escrow Agent undertakes:

 

	
(a)    

	
to hold (and dispose of) the Escrow Sum solely on the terms and subject to the conditions of this Escrow Agreement; and

 

	
(b) 

	
not to permit any withdrawal to be made from the Escrow Account except in accordance with the provisions of this Escrow Agreement.

 

	
5   

	
Release from Escrow Account and Termination

 

	
5.1   

	
In the event that DHT and Bengt Hermelin agree in writing as to the release of the Escrow Fund or part thereof, DHT and Bengt Hermelin shall execute and deliver to the Escrow Agent a Relevant Instruction executed by their respective Authorised Signatories only.  The Escrow Agent shall, subject as provided in this Escrow Agreement, as soon as practicable and in any event, no later than 2 Business Days following receipt of the Payment Notice, make the payment or payments provided for in the Payment Notice out of the Escrow Account.

 

	
5.2   

	
Any Relevant Instruction must be in writing in the format set out in Schedule 3, and is irrevocable.

 

	
5.3   

	
Upon the delivery of the final balance of the Escrow Fund by the Escrow Agent to DHT and Bengt Hermelin as directed by the Parties in accordance with this Escrow Agreement, the Escrow Account shall promptly be closed and this Escrow Agreement and the duties and obligations of the Escrow Agent under this Escrow Agreement shall terminate.

 

 

  

3

  

 

 

	
5.4   

	
Provided Relevant Instructions are in the form specified in Schedule 3:

 

	
  

	
(a)

	
the Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties without inquiry and without requiring substantiating evidence of any kind; and

 

	
  

	
(b)

	
the Escrow Agent is authorised to act upon that instruction if the actual or purported signature, regardless of how or by whom affixed, resembles the specimens set out in Schedule 3.

 

	
5.5   

	
In no circumstances shall the Escrow Agent be obliged to make any payment from the Escrow Account where this would result in a negative balance on the Escrow Account.

 

	
5.6   

	
In the event that pursuant to any binding court order, the Escrow Agent is required to pay out, release or transfer any amount standing to the credit of the Escrow Account, the Escrow Agent is hereby expressly authorised, in its sole discretion, to obey and comply with all such writs, orders or decrees, which it is advised by legal counsel of its own choosing (at cost and expense of the Parties (other than the Escrow Agent)) is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto.

 

	
6   

	
Representations and Warranties

 

	
  

	
Each Party (other than the Escrow Agent) makes the representations and warranties set out in this Clause 6 to the Escrow Agent on the date of this Escrow Agreement.

 

	
6.1   

	
Status

 

	
  

	
a)

	
(In the case of DHT) It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.

 

	
  

	
b)

	
(In the case of DHT) It has the power to own its assets and carry on its business as it is being conducted.

 

	
6.2   

	
Non-conflict with other obligations

 

	
    

	

The entry into and performance by each Party of, and the transactions contemplated by, this Escrow Agreement do not and will not conflict with:

 

	
  

	
(a)

	
any law or regulation applicable to such Party;

 

  

4

  

 

 

	
  

	
(b)

	
(in the case of DHT) its constitutional documents; or

 

	
  

	
(c)

	
any agreement or instrument binding upon such Party or any of its or any of such Party’s assets.

 

	
6.3   

	
Power and authority

 

	
   

	
Each Party has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Escrow Agreement to which it is a party and the transactions contemplated by the Escrow Agreement.

 

	
7   

	
Notices

 

	
7.1   

	
A notice or other communication given under or in connection with this Escrow Agreement must be:

 

	
  

	
(a)

	
in writing;

 

	
  

	
(b)

	
in the English language; and

 

	
  

	
(c)

	
sent by a Permitted Method to the Notified Address.

 

	
7.2   

	
The Permitted Method means any of the methods set out in column (1) below.  A notice given by the Permitted Method will be deemed to be given and received on the date set out in column (2) below.

 

	
(1)

Permitted Method

	
(2)

Date on which notice deemed given and received

	
Personal delivery

	
If left at the Notified Address before 5pm on a Business Day, when left and otherwise on the next Business Day

	
Recorded delivery or courier

	
The date on which the notice is signed for or acknowledged.

	
E-mail, with the notice attached in PDF format

	
On receipt of an automated delivery receipt or confirmation of receipt from the relevant server if before 5pm on a Business Day and otherwise on the next Business Day

 

  

5

  

 

 

	
7.3   

	
The Notified Address of each of the parties is as set out below:

 

	
Name of party

 

	
Address

 

	
E-mail address

 

	
Marked for the attention of:

 

	
Bengt Hermelin

 

	
201 Ocean Drive #01-17, 098584 Singapore

 

	
bhermelin@aol.com

 

	
Bengt Hermelin

 

	
DHT Holdings, Inc.

 

	
DHT Holdings, Inc.

Clarendon House

2 Church Street

Hamilton HM11

Bermuda

With a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

 

	
smh@dhtankers.com

tpm@dhtankers.com

etavzel@cravath.com

 

	
Svein Moxnes Harfjeld and

Trygve P. Munthe, Co-CEOs

Erik Tavzel

 

 

	
ING Bank N.V., Singapore Branch

 

	
9 Raffles Place, #19-02 Republic Plaza, Singapore 048619

 

	
Lynnette.goh@asia.ing.com

SGPAY.PROCESSING@asia.ing.com

Copy to:

Kane.chung@asia.ing.com

Gerbrand.vroegop@asia.ing.com

 

	
Lynnette Goh

SGPAY PROCESSING

Copy to:

Kane ChungGerbrand Vroegop

 

 

	
 

	

or such other Notified Address as any party may, by notice to the others, substitute for their Notified Address set out above.

 

	
8   

	
Duration and Termination

 

	
8.1   

	
This Escrow Agreement shall have effect from the date of this Escrow Agreement and shall, subject to the termination of this Escrow Agreement in accordance with its provisions, automatically terminate on the payment of all monies held in the Escrow Account out of the Escrow Account in accordance with the provisions of this Escrow Agreement.

 

	
8.2   

	
Termination of this Escrow Agreement will be without prejudice to the completion of transactions entered into prior to termination.  All remedies under this Escrow Agreement shall survive the termination of this Escrow Agreement.

 

 

  

6

  

 

 

	
8.3   

	
The rights of the Parties under this clause 8 shall be without prejudice to any claim that any Party may have against any other Party for damages for any prior breach of contract.

 

	
9   

	
Miscellaneous

 

	
9.1   

	
No purported alteration of this Escrow Agreement shall be effective unless it is in writing, refers to this Escrow Agreement and is duly executed by each Party to this Escrow Agreement.

 

	
9.2   

	
This Escrow Agreement may be executed in any number of counterparts, and each of the executed counterparts, when duly exchanged or delivered, shall be deemed to be an original, but, taken together, they shall constitute one instrument.

 

	
9.3   

	
A person who is not a party to this Escrow Agreement has no rights under the Contracts (Rights of Third Parties) Cap. 53B to enforce any of its terms.

 

	
9.4   

	
If any part of this Escrow Agreement is found by any court or other competent authority to be invalid, unlawful or unenforceable then such part shall be severed from the remainder of this Escrow Agreement which shall continue to be valid and enforceable to the fullest extent permitted by law.

 

	
9.5   

	
Except as otherwise expressly provided in this Escrow Agreement, no Party shall assign, encumber, dispose of or otherwise transfer its rights under this Escrow Agreement or purport to transfer any burden imposed on it under this Escrow Agreement without the prior written consent of the others, and which written consent any Party may withhold in its absolute discretion.

 

	
9.6   

	
This Escrow Agreement expressly and exclusively sets forth the duties of Escrow Agent with respect to any and all matters pertinent hereto, and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent. This Escrow Agreement constitutes the entire agreement between the Escrow Agent and the other parties hereto in connection with the subject matter of this escrow, and no other agreement entered into between the parties, or any of them, shall be considered as adopted or binding, in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement may be referred to herein or deposited with Escrow Agent or the Escrow Agent may have knowledge thereof, and Escrow Agent’s rights and responsibilities shall be governed solely by this Escrow Agreement.

 

	
9.7   

	
The Parties (other than Escrow Agent) hereby severally agree to indemnify and hold the Escrow Agent, its affiliates and their officers, employees, successors, assigns, attorneys and agents (each an “Indemnified Party”) harmless from all losses, costs, claims, demands, expenses, damages, penalties and attorney’s fees suffered or incurred by any Indemnified Party or Escrow Agent as a result of anything which it may do or refrain from doing in connection with this Escrow Agreement or any litigation or cause of action arising from or in conjunction with this Escrow Agreement or involving the subject matter hereof or the Escrow Fund; provided that the foregoing indemnification shall not extend to the gross negligence or willful misconduct of Escrow Agent.

 

 

  

7

  

 

 

	
10   

	
Governing law

 

	
10.1   

	
This Escrow Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with Singapore law.

 

	
10.2   

	
The Parties irrevocably agree that all disputes arising under or in connection with this Escrow Agreement, or in connection with the negotiation, existence, legal validity, enforceability or termination of this Escrow Agreement, regardless of whether the same shall be regarded as contractual claims or not, shall be exclusively governed by and determined only in accordance with Singapore law.

 

	
11   

	
Jurisdiction

 

	
11.1   

	
The Parties irrevocably agree that the courts of Singapore are to have exclusive jurisdiction, and that no other court is to have jurisdiction to:

 

	
  

	
(a)

	
determine any claim, dispute or difference arising under or in connection with this Escrow Agreement, any non-contractual obligations connected with it, or in connection with the negotiation, existence, legal validity, enforceability or termination of this Escrow Agreement, whether the alleged liability shall arise under the law of Singapore or under the law of some other country and regardless of whether a particular cause of action may successfully be brought in the Singapore courts (Proceedings); and

 

	
  

	
(b)

	
grant interim remedies, or other provisional or protective relief.

 

	
11.2   

	
The Parties submit to the exclusive jurisdiction of the courts of Singapore and accordingly any Proceedings may be brought against the Parties or any of their respective assets in such courts.

 

	
11.3   

	
Without prejudice to any other mode of service allowed under any relevant law, DHT:

 

	
  

	
(a)

	
irrevocably appoints BSL Corporate Services Pte. Ltd. as its agent for service of process in relation to any proceedings before the Singapore courts in connection with this Escrow Agreement;

 

 

  

8

  

 

	
  

	
(b)

	
agrees that failure by a process agent to notify DHT of the process will not invalidate the proceedings concerned.

 

This Escrow Agreement has been entered into on the date stated at the beginning of this Escrow Agreement.

 

  

9

  

 

 

Signed by:

 

BENGT AXEL OLOF HERMELIN

 

 

 

.........................................................................

 

 

Signed on behalf of:

 

DHT HOLDINGS, INC.

 

 

 

.........................................................................

 

 

Signed on behalf of:

 

ING BANK N.V., SINGAPORE BRANCH

 

 

 

.........................................................................

 

 

 

 

10

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