<PAGE>
SENIOR FACILITY AGREEMENT
between
BOSS LTD.
STAVANGER SUN LTD.
as borrowers
CHRISTIANIA BANK OG KREDITKASSE ASA
as agent and security trustee
and
CHRISTIANIA BANK OG KREDITKASSE ASA
as lender
Clifford Chance
London
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
CLAUSE PAGE
<S> <C>
1. Interpretation ........................................................ 1
2. The Facility .......................................................... 8
3. Purpose ............................................................... 8
4. Conditions Precedent .................................................. 8
5. Nature of Rights and Obligations ...................................... 8
6. Availability .......................................................... 9
7. Interest Periods ...................................................... 10
8. Interest .............................................................. 11
9. Repayment and Prepayment .............................................. 11
10. Taxes and Tax Receipts ................................................ 13
11. Changes in Circumstances .............................................. 14
12. Representations ....................................................... 16
13. Information Covenants ................................................. 18
14. Financial Condition ................................................... 19
15. General Covenants ..................................................... 20
16. Events of Default ..................................................... 21
17. Default Interest and Indemnity ........................................ 24
18. Currency of Account and Payment ....................................... 26
19. Payments .............................................................. 26
20. Set-Off ............................................................... 26
21. Sharing ............................................................... 27
22. Fees .................................................................. 27
23. Costs and Expenses .................................................... 28
24. The Agent and the Banks ............................................... 29
25. Benefit of Agreement .................................................. 32
26. Assignments and Transfers ............................................. 33
27. Calculations and Evidence of Debt ..................................... 34
28. Remedies and Waivers .................................................. 35
29. Partial Invalidity .................................................... 35
30. Notices ............................................................... 35
31. Law ................................................................... 36
32. Jurisdiction .......................................................... 36
The First Schedule ........................................................ 38
Condition Precedent Documents ............................................. 38
The Second Schedule ....................................................... 41
Notice of Drawdown ........................................................ 41
The Third Schedule ........................................................ 42
Form of Transfer Certificate .............................................. 42
The Fourth Schedule ....................................................... 44
</TABLE>
<PAGE>
THIS AGREEMENT is made on 30 October 1997
BETWEEN:
(1) THE COMPANIES named in the Fourth Schedule (the "BORROWERS" and singly
a "BORROWER") acting jointly and severally;
(2) CHRISTIANIA BANK OG KREDITKASSE ASA (in its capacity as agent, the
"AGENT");
(3) CHRISTIANIA BANK OG KREDITKASSE ASA (in its capacity as the security
trustee, the "SECURITY TRUSTEE"); and
(4) CHRISTIANIA BANK OG KREDITKASSE ASA (the "INITIAL BANK").
RECITALS
A. The Initial Bank has agreed to grant to the Borrowers, upon the terms
and subject to the conditions herein set forth, a loan facility in the
amount of up to $30,000,000.
B. By a further loan facility agreement (the "JUNIOR FACILITY AGREEMENT")
of even date herewith and made between the Borrowers, the Agent, the
Security Trustee and Christiania Bank og Kreditkasse ASA as Initial
Bank, the Initial Bank has agreed to lend to the Borrowers a further
sum of up to $5,000,000 secured by second ranking security over the
assets mortgaged or charged by the Borrowers to the Security Trustee
pursuant to the Facility Documents defined therein.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"ADMINISTRATIVE GENERAL PARTNER" means GMC Administration Ltd., a
company duly incorporated under the laws of the Cayman Islands.
"ADVANCE" means, save as otherwise provided herein, each of the
advances made or to be made by the Initial Bank hereunder;
"ASSIGNMENTS OF ACCOUNTS" means the assignment of each Borrower's bank
accounts to be executed by each Borrower in favour of the Security
Trustee pursuant to paragraph 3, of Part 2 of the First Schedule and
"ASSIGNMENT OF ACCOUNTS" means either of them;
"ASSIGNMENTS OF EARNINGS AND INSURANCES" means an assignment of
earnings and insurances to be entered into by each Borrower in favour
of the Security Trustee pursuant to paragraph 2 of Part 2 of the First
Schedule and "ASSIGNMENT OF EARNINGS AND INSURANCES" means either of
them;
"BANKS" means the Initial Bank and any Transferees of the Initial Bank
(and any subsequent
<PAGE>
Transferees) and "BANK" means each of the Banks;
"BASLE PAPER" means the paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988 and prepared
by the Basle Committee on Banking Regulations and Supervision, as
amended in November 1991;
"CAPITAL ADEQUACY REQUIREMENT" means a request or requirement relating
to the maintenance of capital, including one which makes any change to,
or is based on any alteration in, the interpretation of the Basle Paper
or which increases the amounts of capital required thereunder, other
than a request or requirement made by way of implementation of the
Basle Paper in the manner in which it is being implemented at the date
hereof;
"DRAWDOWN DATE" means in relation to each Advance the date on which
such Advance is made to the relevant Borrower in respect of the Vessel
being purchased by such Borrower;
"EARNINGS ACCOUNT" in relation to each Borrower has the meaning
ascribed to it in the Assignment of Earnings and Insurances to which
such Borrower is a party;
"EVENT OF DEFAULT" means any of those events specified in Clause 16.1
(EVENTS OF DEFAULT);
"FACILITY" means the dollar loan facility granted to the Borrowers in
this Agreement;
"FACILITY AMOUNT" means an amount of up to US$30,000,000 to be advanced
by the Initial Bank to the Borrowers;
"FACILITY OFFICE" means in relation to a Bank, the Agent or the
Security Trustee the office identified with its the signature below (or
in the case of a Transferee, at the end of the Transfer Certificate to
which it is a party as Transferee) or such other office as it may from
time to time select;
"FACILITY DOCUMENTS" means this Agreement, the Senior Interest Rate
Swap Agreement, the Junior Interest Rate Swap Agreement, the Trust
Deed, the Mortgages, the Assignments of Earnings and Insurances entered
into by each Borrower, the Priority Agreement and the Assignments of
Accounts entered into by each Borrower and any other document agreed
between the Agent and the Borrowers to be a Facility Document and
"FACILITY DOCUMENT" means each of them;
"FAIR MARKET VALUE" means, in relation to each Vessel at any time, the
sale value of such Vessel in dollars determined on the basis of a sale
(for cash and prompt delivery) by a willing seller to a willing buyer,
free of charter and encumbrances and at arm's length on normal
commercial terms;
"FINAL REPAYMENT DATE" means in relation to both the first Advance and
the second Advance, the date which falls 60 months after the Drawdown
Date for the first Advance;
"GENERAL PARTNERS" means the Managing General Partner and the
Administrative General Partner and "GENERAL PARTNER" means each of
them;
<PAGE>
"INITIAL MANAGEMENT AGREEMENTS" means each of the agreements (as from
time to time amended or novated) to be entered into or entered into
between each respective Borrower and Det Stavangerske Damskipsselskap,
Norway relating to the management of the Vessel owned by such Borrower
pursuant to paragraph 9 Part 1 of the First Schedule commencing from
the relevant Drawdown Date;
"INSTRUCTING GROUP" means a Bank or group of Banks to whom in aggregate
more than fifty per cent of the Loan is (or, immediately prior to its
repayment, was then) owed;
"INTEREST PERIOD" means in relation to each Advance any of those
periods mentioned in Clause 7.2 (DURATION OF INTEREST PERIODS);
"JUNIOR INTEREST RATE SWAP AGREEMENT" means the International Swap
Dealers Association, Inc., Master Agreement together with a
confirmation letter dated on or about the date hereof entered into by
the Borrower, and the Initial Bank (as from time to time amended,
supplemented or extended by the parties thereunder) pursuant to which
the Borrower will hedge all or part of its interest costs under the
Junior Facility Agreement;
"LIBERIA" means the Republic of Liberia;
"LIBOR" means, in relation to any period for which an interest rate is
to be determined hereunder, the rate per annum determined by the Agent
to be equal to the LIBOR fixing on Telerate page 3740 for deposits in
dollars for a period corresponding to that period at 11.00 a.m. on the
Quotation Date for that period Provided that if there are no such rates
so appearing on such page at such time it means the rate per annum
determined by the Agent to be equal to the arithmetic mean (rounded
upwards, if not already such a multiple to the nearest whole multiple
of one-sixteenth of one per cent.) of the respective rates (as notified
to the Agent) at which the Reference Banks were offering to prime banks
in the London Interbank Market deposits in dollars for a period
corresponding to such period at such time;
"LOAN" means the aggregate principal amount for the time being
outstanding hereunder;
"MANAGING GENERAL PARTNER" means Genmar Boss Ltd. a company duly
incorporated under the laws of the State of New York, USA;
"MARGIN" means one and one-quarter per cent. (1-1/4%) per annum;
"MEMORANDUM OF AGREEMENTS" means each of the agreement dated 26
September 1997 (as from time to time amended or novated) made between
each respective Borrower and the Seller for the purchase and sale of
the Vessel to be purchased by each respective Borrower;
"MORTGAGES" means each of the Norwegian International Ship Mortgages to
be granted by Boss Ltd as the relevant Borrower over its Vessel and a
first preferred Liberian ship mortgage to be granted by Stavanger Sun
Ltd, as the relevant Borrower over its Vessel, to the Security Trustee
both pursuant to paragraph 1, Part 2 of the First Schedule and
"MORTGAGE" means any of them;
"NORWEGIAN INTERNATIONAL SHIP MORTGAGES" means the following Norwegian
International
<PAGE>
ship mortgages granted by Boss Ltd over its Vessel to secured (but not
limited to):
(i) the Facility Amount under the Senior Facility Agreement;
(ii) the maximum exposure amount of $900,000 under the Senior
Interest Rate Swap Agreement;
(iii) the Facility Amount under the Junior Facility Agreement; and
(iv) the maximum exposure amount of $250,000 under the Junior
Interest Rate Swap Agreement;
"NOTICE OF DRAWDOWN" means a notice in the form or substantially the
form of that set out in the Second Schedule;
"PERMITTED LIENS" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"PRIORITY AGREEMENT" means the agreement between the Agent, the Banks,
the Borrowers and the Agent and the lenders under the Junior Facility
Agreement regulating the priorities and the rights of enforcement of
security between the Banks and the lenders under the Junior Facility
Agreement pursuant to paragraph 7 of Part 1 of the First Schedule;
"QUOTATION DATE" in relation to any period for which an interest rate
is to be determined hereunder means the day on which quotations would
ordinarily be given by prime banks in the London Interbank Market for
dollar deposits for delivery on the first day of that period Provided
that if, for any such period, quotations would ordinarily be given on
more than one date, the Quotation Date for that period shall be the
last of those dates;
"REFERENCE BANK" means the principal Oslo office of Christiania Bank og
Kreditkasse ASA and such other banks as may from time to time be agreed
between the Borrower and the Agent;
"REPAYMENT DATES" means in relation to each Advance, the days which
fall 3, 6, 9, 12, 15, 18, 21, 24, 27, 30, 33, 36, 39, 42, 45, 48, 51,
54, 57 and 60 months after the Drawdown Date for such Advance, save for
the Final Repayment Date for the second Advance which shall fall on the
same date as the Final Repayment Date for the first Advance;
"RETENTION ACCOUNT" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"SELLER" means in relation to each Vessel the party listed against the
name of such Vessel in the Fourth Schedule and "SELLERS" means both of
them;
"SENIOR INTEREST RATE SWAP AGREEMENT" means the International Swap
Dealers Association, Inc. Master Agreement together with a confirmation
letter both entered into by the Borrowers and the Initial Bank (as from
time to time amended, supplemented or extended by the parties
thereunder) pursuant to which the Borrowers will hedge all or part of
their
<PAGE>
interest costs under this Agreement;
"SHAREHOLDER" means Boss L.P., the sole shareholder of each Borrower;
"SUBSEQUENT MANAGEMENT AGREEMENTS" means each of the agreements (as
from time to time amended or novated) to be entered or entered into
between each respective Borrower and Universe Tankships (Bermuda) Ltd.
relating to the management of the Vessel owned by such Borrower
pursuant to paragraph 9, Part 1, of the First Schedule commencing upon
the termination of the Initial Management Agreement for such Vessel;
"TERMINATION DATE" means the earlier of 31 December 1997 and the date
on which the Facility Amount has been reduced to zero;
"TRANSFER CERTIFICATE" means a certificate in the form set out in the
Third Schedule (or such other form as may be agreed between the
relevant Bank, the proposed Transferee, the Agent and the Borrowers
pursuant to Clause 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS)) signed by
a Bank and a Transferee whereby:
(i) such Bank seeks to procure the transfer to such Transferee of
all or a part of such Bank's rights and obligations hereunder
upon and subject to the terms and conditions set out in Clause
26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS); and
(ii) such Transferee undertakes to perform the obligations it will
assume as a result of delivery of such certificate to the
Borrowers as is contemplated in Clause 26.4 (TRANSFERS BY
BANKS)
"TRANSFER DATE" in relation to any Transfer Certificate means the date
for the making of the transfer as specified in the schedule to such
Transfer Certificate;
"TRANSFEREE" means a bank or other financial institution to which a
Bank seeks to transfer all or part of such Bank's rights and
obligations hereunder;
"TRUST DEED" means a security trust deed of the date hereof entered
into between the Security Trustee, the Agent, the Borrowers and the
Banks and the agent and lenders under the Junior Facility Agreement
pursuant to paragraph 4, Part 2 of the First Schedule;
"VESSEL" in relation to each Borrower means the vessel listed against
the name of such Borrower in Part 1 of the Fourth Schedule and
"VESSELS" means both of them;
1.2 Any reference in this Agreement to:
the Agent, the Security Trustee, or the Banks shall be construed so as
to include their respective successors, Transferees and permitted
assigns in accordance with their respective interests;
a "BUSINESS DAY" shall be construed as a reference to a day (other than
a Saturday or Sunday) on which banks are generally open for business in
Oslo, London and New York City;
<PAGE>
a "CHARTER" shall be construed as a reference to any agreement pursuant
to which either Vessel is, or will be, employed;
a "CLAUSE" shall, subject to any contrary indication, be construed as a
reference to a clause hereof;
an "ENCUMBRANCE" shall be construed as a reference to a mortgage,
charge, pledge, lien or other encumbrance securing any obligation of
any person or any other type of preferential arrangement (including,
without limitation, title transfer and retention arrangements) having a
similar effect;
the "EQUIVALENT" in one currency (in this paragraph the "FIRST
CURRENCY") of an amount denominated in another currency (in this
paragraph the "SECOND CURRENCY") on any date shall, save as otherwise
provided, be construed as a reference to the amount of the first
currency which could be purchased with that amount of the second
currency at the spot rate of exchange quoted by the Agent at or about
11.00 a.m. on such date for the purchase of the first currency with the
second currency for delivery on the second business day thereafter;
a "GUARANTEE" includes any guarantee, indemnity or other obligation to
pay, purchase, provide funds for the payment of or indemnify against
the consequences of default in the payment of indebtedness of any other
person and any encumbrance which secures the payment of any
indebtedness of any other person;
a "HOLDING COMPANY" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned
company or corporation is a subsidiary;
"INDEBTEDNESS" shall be construed so as to include any obligation
(whether incurred as principal or as surety) for the payment or
repayment of money, whether present or future, actual or contingent;
a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month save that, where any such period would otherwise end on
a day which is not a business day, it shall end on the next business
day, unless that day falls in the calendar month succeeding that in
which it would otherwise have ended, in which case it shall end on the
preceding business day Provided that, if a period starts on the last
business day in a calendar month or if there is no numerically
corresponding day in the month in which that period ends, that period
shall end on the last business day in that later month (and references
to "MONTHS" shall be construed accordingly);
a "PERSON" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
a "SCHEDULE" shall, subject to any contrary indication, be construed as
a reference to a schedule hereto;
<PAGE>
a "SUBSIDIARY" of a company or corporation shall be construed as a
reference to any company or corporation:
(i) which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
(ii) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the
first-mentioned company or corporation; or
(iii) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation
and, for these purposes, a company or corporation shall be treated as
being controlled by another if that other company or corporation is
able to direct its affairs and/or to control the composition of its
board of directors or equivalent body;
"TAX" shall be construed so as to include any present or future tax,
levy, impost, duty or other charge of a similar nature (including,
without limitation, any penalty or interest payable in connection with
any failure to pay or any delay in paying any of the same);
"TOTAL LOSS" in relation to either Vessel includes any actual,
constructive, arranged, agreed or compromised total loss, any
requisitioning for title and the capture, seizure, arrest, detention,
or confiscation of such Vessel by any government, or by persons
purporting to act on behalf of any government, unless such Vessel be
released and restored to the Owner from such capture, seizure,
detention or confiscation within one month after the date thereof; and
the "WINDING-UP" or "DISSOLUTION" of a company or limited partnership
shall be construed so as to include any equivalent or analogous
proceedings under the law of the jurisdiction in which such company or
limited partnership is incorporated or established or any jurisdiction
in which such company or limited partnership carries on business.
1.3 "$" and "DOLLARS" denote lawful currency of the United States of
America.
1.4 Save where the contrary is indicated, any reference in this Agreement
to:
(i) this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may
be, such other agreement or document as the same may have
been, or may from time to time be, amended, varied or
supplemented;
(ii) a statute shall be construed as a reference to such statute as
the same may have been, or may from time to time be, amended
or re-enacted; and
(iii) a time of day shall be construed as a reference to London
time.
1.5 Clause headings are for ease of reference only.
<PAGE>
1.6 For the purposes of the Facility Documents, a total loss of either
Vessel shall be deemed to have occurred:
(i) if it consists of an actual total loss, at noon Greenwich Mean
Time on the actual date of loss or, if that is not known, on
the date on which she was last heard of;
(ii) if it consists of a requisitioning for title, at noon
Greenwich Mean Time on the date on which the same is expressed
to take effect by the person making the same; and
(iii) if it consists of a constructive or compromised or arranged or
agreed total loss, at noon Greenwich Mean Time on the date at
which notice of her abandonment is given to her insurers for
the time being or (if her insurers for the time being do not
admit the claim for total loss) at the time on which a total
loss is subsequently adjudged to have occurred by a competent
court or arbitration tribunal or liability in respect thereof
as a total loss is admitted by underwriters.
1.7 All obligations of the Borrowers under this Agreement are joint and
several obligations of both of the Borrowers.
2. THE FACILITY
The Initial Bank hereby grants to the Borrowers, upon the terms and
subject to the conditions hereof, a loan facility in the maximum amount
of $30,000,000.
3. PURPOSE
The purpose of the Facility is to provide the Borrowers with funds to
part finance the purchase of the Vessels and, accordingly, the
Borrowers shall apply all of the amounts raised by them hereunder in or
towards such purpose (but so that neither the Agent nor the Initial
Bank shall be obliged to concern itself with the application of amounts
borrowed by the Borrowers hereunder).
4. CONDITIONS PRECEDENT
The Borrowers shall not be entitled to give any Notice of Drawdown
hereunder unless the Agent shall have confirmed to the relevant
Borrower by facsimile or letter that it has received three days prior
to the proposed date for making of an Advance each of the documents
specified in Part 1 of the First Schedule and found the same to be
satisfactory to it in form and substance.
5. NATURE OF RIGHTS AND OBLIGATIONS
5.1 OBLIGATIONS OF BANKS SEVERAL
The obligations of each Bank hereunder are several.
<PAGE>
5.2 FAILURE OF ANY BANK TO PERFORM OBLIGATIONS
The failure by a Bank to perform its obligations hereunder shall not
affect the obligations of the Borrowers towards any other party hereto
nor shall any other party be liable for the failure by such Bank to
perform its obligations hereunder.
5.3 RIGHTS OF BANKS SEVERAL
The rights of the Banks hereunder are also several. The amount at any
time owing by the Borrowers to any party under this Agreement shall be
a separate and independent debt from any amount owing to any other
party.
6. AVAILABILITY
6.1 THE FACILITY
The Facility shall be made by the Initial Bank to the Borrowers by way
of one Advance in respect of each Vessel.
6.2 DRAWDOWN CONDITIONS
Save as otherwise provided herein, an Advance will be made by the
Initial Bank to the relevant Borrower on the request of either Borrower
if:
(i) not more than ten nor less than two business days before the
proposed date for the making of an Advance the Agent has
received from the relevant Borrower a Notice of Drawdown
therefor, receipt of which shall oblige the Borrowers to
borrow the amount therein requested on the date therein stated
upon the terms and subject to the conditions contained herein;
(ii) the amount stated in the Notice of Drawdown shall not be more
than the lesser of the amount of the Facility Amount and 57%
of the purchase price of the Vessel being purchased by such
Borrower as set out in the Memorandum of Agreement;
(iii) the relevant Drawdown Date is a business day which is or
precedes the Termination Date;
(iv) on or before the relevant Drawdown Date the Agent has received
from the relevant Borrower with respect to its Vessel each of
the documents specified in Part 2 of the First Schedule and
found the same to be satisfactory to it in both form and
substance;
(v) the interest rate applicable to such Advance during its first
Interest Period does not fall to be determined pursuant to the
proviso to Clause 7.2 (DURATION OF INTEREST PERIODS); and
(vi) (a) no event has occurred which is or may become (with
the passage of time, the giving of notice, the making
of any determination hereunder or any
<PAGE>
combination thereof) an Event of Default; and
(b) the representations set out in Clause 12
(REPRESENTATIONS) are true on and as of the proposed
date for the making of such Advance
or the Agent agrees (notwithstanding any matter mentioned at
(a) or (b) above) that such Advance should be made.
7. INTEREST PERIODS
7.1 INTEREST PERIODS
The period for which an Advance is outstanding shall be divided into
successive periods each of which (other than the first) shall start on
the last day of the preceding such period.
7.2 DURATION OF INTEREST PERIODS
The duration of each Interest Period relating to an Advance shall, save
as otherwise provided herein, be one, three, six or twelve months, or
any such other period as may be agreed from time to time between the
Borrowers and the Agent, in each case as the Borrowers may select by
not less than three business days' prior notice to the Agent Provided
that:
(i) if the Borrowers select a duration of twelve months in
relation to an Interest Period, then:
(a) the Borrowers may, at the same time, notify the Agent
of an alternative selection of three or six months to
apply if the Borrowers' selection becomes ineffective
pursuant to (b) below; and
(b) any Bank may, at any time before 9.00 a.m. on the
second business day preceding the first day of such
Interest Period, notify the Agent that it objects to
the Borrowers' selection, whereupon such selection
shall become ineffective Provided that no such
objection shall be given except for reason of the non
availability to such Bank of dollars for twelve
months interest periods in the London Inter-bank
Market;
(ii) if the Borrowers fail to give such notice of their selection
in relation to an Interest Period, or if their selection
becomes ineffective under (i)(b) above and the Borrowers have
failed to give the Agent any permitted alternative selection
pursuant to (i)(a) above, then the duration of that Interest
Period shall, subject to (iii) below, be three months;
(iii) the Borrowers may not select an Interest Period of one month
more than three times during any calendar year; and
(iv) any Interest Period which would otherwise end during the month
preceding, or extend beyond, the Final Repayment Date shall be
of such duration that it shall end on the Final Repayment
Date.
<PAGE>
7.3 If pursuant to Clause 7.2 the Borrowers select an Interest Period for
an Advance which will extend beyond one or more Repayment Dates, then
such Advance shall be divided into parts such that on such (or each
such) Repayment Date there will be one or more parts in an amount equal
to the amount scheduled to be repaid on each such Repayment Date, each
such part to constitute an Advance and to have an Interest Period
ending on that Repayment Date.
8. INTEREST
8.1 PAYMENT OF INTEREST
On the last day of each Interest Period (and, in the case of an
Interest Period of a duration of more than three months, on the last
day of each successive period of three months falling within such
Interest Period) the Borrowers shall pay accrued interest on the
Advance to which such Interest Period relates.
8.2 CALCULATION OF INTEREST
The rate of interest applicable to the Advance from time to time during
an Interest Period relating thereto shall be the rate per annum which
is the sum of the Margin and LIBOR for such Interest Period Provided
that if LIBOR for an Interest Period falls to be determined in
accordance with the proviso to the definition thereof but none of the
Reference Banks was offering to prime banks in the London Interbank
Market dollar deposits for the proposed duration of such Interest
Period, the rate of interest applicable to the Advance to which such
Interest Period relates from time to time during such Interest Period
shall be the rate per annum which is the sum of the Margin and the
weighted average of the rates per annum notified to the Agent by each
Bank before the last day of such Interest Period to be that which
expresses as a percentage rate per annum the cost to it of funding such
Advance during such Interest Period from whatever sources it may select
and the Agent shall notify the Borrower accordingly.
9. REPAYMENT AND PREPAYMENT
9.1 REPAYMENT
The Borrowers shall repay the Loan in instalments by repaying on each
Repayment Date in relation to each Advance an amount as set out below:
<TABLE>
<CAPTION>
REPAYMENT DATE NO. INSTALMENT PAYABLE IN $000
FIRST ADVANCE SECOND ADVANCE
<S> <C> <C>
1 500 500
2 500 500
3 500 500
4 500 500
5 550 550
<PAGE>
6 550 550
7 550 550
8 550 550
9 600 600
10 600 600
11 600 600
12 600 600
13 650 650
14 650 650
15 650 650
16 650 650
17 700 700
18 700 700
19 700 700
20 3700 3700
</TABLE>
9.2 PREPAYMENT
The Borrowers may, if they have given to the Agent not less than
fifteen (15) business days' prior notice to that effect, prepay the
whole or any part of an Advance (but if in part being an amount or
integral multiple of $250,000) on the last day of an Interest Period
relating thereto. Any prepayment made the amount of which if added to
all other prepayment amounts previously made by the Borrowers pursuant
to this Clause would be equal to or less than $1,000,000 shall satisfy
the Borrowers' remaining obligations under Clause 9.1 (REPAYMENT) in
order of maturity. Further prepayments in excess of $1,000,000 made by
the Borrowers shall satisfy the Borrowers' remaining obligations under
Clause 9.1 (REPAYMENT) in inverse order of maturity.
9.3 NOTICE OF PREPAYMENT
Any notice of prepayment given by the Borrowers pursuant to Clause 9.2
(PREPAYMENT) shall be irrevocable and shall specify the date upon which
such prepayment is to be made and the amount thereof and shall oblige
the Borrowers to make such prepayment on such date.
9.4 PREPAYMENT FEE
If the Borrowers make any prepayment pursuant to Clause 9.2
(PREPAYMENT) the Borrowers shall be obliged, together with such
prepayment, to pay a prepayment fee equal to one quarter of one per
cent. (3%) of the amount so prepaid Provided that no such fee shall be
payable if such prepayment was made either (i) pursuant to a
refinancing of the Loan granted by Christiania Bank og Kreditkasse ASA
or by a syndicate of banks of which Christiania Bank og Kreditkasse ASA
is an agent or an underwriter or (ii) during the 12 months preceding
the Final Repayment Date.
9.5 INTEREST RATE SWAP AGREEMENT
If the Borrowers make any prepayment pursuant to Clause 9.2, they shall
be obliged to pay to the Initial Bank as counterparty to the Senior
Interest Rate Swap Agreement and, to any
<PAGE>
assignees of any part of the Initial Bank's interest in the Senior
Interest Rate Swap Agreement (the "ASSIGNEE") (or the Initial Bank
shall pay to the Agent for account of the Borrowers) the amount of any
loss (or, as the case may be, profit) incurred or made by the Initial
Bank and any Assignee as a result of a total or partial early
termination of the Senior Interest Rate Swap Agreement made between the
Borrowers and the Initial Bank which is made to ensure that the
notional principal amount of the Senior Interest Rate Swap Agreement
matches the reduced amount of the Loan.
9.6 NO OTHER REPAYMENTS OR REBORROWING
No amount repaid or prepaid hereunder may be reborrowed.
10. TAXES AND TAX RECEIPTS
10.1 TAX GROSS-UP
All payments to be made by either Borrower to any person under any of
the Facility Documents shall be made free and clear of and without
deduction for or on account of tax unless either Borrower is required
to make such a payment subject to the deduction or withholding of tax,
in which case the sum payable by either Borrower in respect of which
such deduction or withholding is required to be made shall be increased
to the extent necessary to ensure that, after the making of such
deduction or withholding, such person receives and retains (free from
any liability in respect of any such deduction or withholding) a net
sum equal to the sum which it would have received and so retained had
no such deduction or withholding been made or required to be made.
10.2 TAX INDEMNITY
Without prejudice to the provisions of Clause 10.1 (TAX GROSS-UP), if
any person or the Agent on its behalf is required to make any payment
on account of tax or otherwise (not being a tax imposed on the net
income of the Facility Office by the jurisdiction in which it is
incorporated or in which the Facility Office is located) on or in
relation to any sum received or receivable by such person under any of
the Facility Documents (including, without limitation, any sum received
or receivable under this Clause 10) or any liability in respect of any
such payment is asserted, imposed, levied or assessed against such
person, the Borrowers shall, upon demand of the Agent, promptly
indemnify such person against such payment or liability, together with
any interest, penalties and expenses payable or incurred in connection
therewith Provided that if a Bank or the Agent or the Security Trustee
considers that it is reasonable to do so and that it would not be
otherwise prejudiced thereby, it will, prior to instructing the Agent
to make a demand under this Clause 10.2, use reasonable endeavours to
determine whether any such payment or liability was correctly or
legally imposed or asserted.
10.3 CLAIMS BY A BANK
If a Bank intends to make a claim pursuant to Clause 10.2 (TAX
INDEMNITY) it shall notify the Agent of the event by reason of which it
is entitled to do so whereupon the Agent shall notify the Borrowers
accordingly.
<PAGE>
10.4 NOTIFICATION OF REQUIREMENT TO DEDUCT TAX
If, at any time, either Borrower is required by law to make any
deduction or withholding from any sum payable by it under any of the
Facility Documents (or if thereafter there is any change in the rates
at which or the manner in which such deductions or withholdings are
calculated), the Borrowers shall promptly notify the Agent, whereupon
the Agent shall notify the Banks and the Security Trustee accordingly.
10.5 EVIDENCE OF PAYMENT OF TAX
If either Borrower makes any payment under any of the Facility
Documents in respect of which it is required to make any deduction or
withholding, it shall pay the full amount required to be deducted or
withheld to the relevant taxation or other authority within the time
allowed for such payment under applicable law and shall deliver to the
Agent, within thirty days after it has received the same, an original
receipt (or a certified copy thereof) issued by such authority
evidencing the payment to such authority of all amounts so required to
be deducted or withheld in respect of such payment.
11. CHANGES IN CIRCUMSTANCES
11.1 INCREASED COSTS
If, by reason of (a) any change in law or in its interpretation or
administration and/or (b) compliance with any Capital Adequacy
Requirement or any request from or requirement of any central bank or
other fiscal, monetary or other authority:
(i) a Bank or any holding company of such Bank incurs a cost as a
result of such Bank having entered into and/or performing its
obligations under this Agreement and/or assuming or
maintaining a commitment under this Agreement and/or making
any advance hereunder;
(ii) a Bank or any holding company of such Bank is unable to obtain
the rate of return on its overall capital which it would have
been able to obtain but for such Bank having entered into
and/or performing its obligations and/or assuming or
maintaining a commitment under this Agreement;
(iii) there is any increase in the cost to a Bank or any holding
company of such Bank of funding or maintaining all or any of
the advances comprised in a class of advances formed by or
including the advances made or to be made by such Bank
hereunder; or
(iv) a Bank or any holding company of such Bank becomes liable to
make any payment on account of tax or otherwise (not being a
tax imposed on the net income of the Facility Office by the
jurisdiction in which such Bank is incorporated or in which
the Facility Office is located) on or calculated by reference
to the amount of an Advance made or to be made hereunder
and/or by reference to any sum received or receivable by such
Bank hereunder,
<PAGE>
then the Borrowers shall, from time to time on demand of the Agent,
promptly pay to the Agent for the account of such Bank amounts
sufficient to indemnify it (or,as the case may be, to enable it to
indemnify its holding company) against, as the case may be, (1) such
cost, (2) such reduction in such rate of return (or such proportion of
such reduction as is, in the opinion of such Bank, attributable to its
obligations hereunder), (3) such increased cost (or such proportion of
such increased cost as is, in the opinion of such Bank, attributable to
its funding or maintaining its advance hereunder) or (4) such
liability.
11.2 INCREASED COSTS CLAIMS
If a Bank intends to make a claim pursuant to Clause 11.1 (INCREASED
COSTS) it shall notify the Agent of the event by reason of which it is
entitled to do so whereupon the Agent shall notify the Borrowers
accordingly.
11.3 ILLEGALITY
If at any time it is unlawful for a Bank to make its portion of an
Advance or to fund or allow to remain outstanding its portion of the
Loan, then that Bank shall, promptly after becoming aware of such fact,
deliver to the Agent who will deliver to the Borrowers a certificate to
that effect whereupon:
(i) if no Advance has been made hereunder, the Bank shall not
thereafter be obliged to make an Advance hereunder and the
Facility Amount shall be reduced to zero; and
(ii) if an Advance has already been made hereunder, then, if the
Agent on behalf of any relevant Bank so requires, the
Borrowers shall on such date as the Agent shall have specified
repay such Bank's portion of the Loan in full together with
accrued interest thereon.
11.4 MITIGATION
(a) If circumstances arise which would (or would upon the giving
of notice) result in:
(i) the reduction of a Bank's portion of the Loan
pursuant to Clause 11.3 (ILLEGALITY);
(ii) the prepayment of the Loan pursuant to Clause 11.3
(ILLEGALITY);
(iii) an increase in the amount of any payment pursuant to
Clause 10.1 (TAX GROSS-UP); or
(iv) a claim by a Bank for indemnification pursuant to
Clause 10.2 (TAX INDEMNITY) or a claim by a Bank for
indemnification pursuant to Clause 11.1 (INCREASED
COSTS),
then, without in any way limiting, reducing or otherwise
qualifying the obligations of the Borrowers under any of the
Clauses referred to above, such Bank shall, in consultation
with the Agent and the Borrowers, take such reasonable steps
as may be
<PAGE>
reasonably open to it to mitigate the effects of such
circumstances, including by transferring its Facility Office
to another jurisdiction or by assigning its rights hereunder
to another financial institution approved by the Borrowers
Provided that such Bank shall have no obligation to transfer
its Facility Office or assign its rights hereunder as
aforesaid if it is of the opinion that to do so would or might
have an adverse effect on its business, operations or
financial condition.
(b) If circumstances arise which would result in the Security
Trustee being entitled pursuant to Clause 4.5 of the Trust
Deed to exercise its rights to make deductions and
withholdings from payments made to the Agent hereunder, the
Security Trustee shall, in consultation with the Borrowers,
take such reasonable steps as may be reasonably open to it to
mitigate the effects of such circumstances Provided that the
Security Trustee shall have no obligation to do so if it is of
the opinion that to do so would or might have an adverse
effect on its business operations or financial condition.
12. REPRESENTATIONS
12.1 Subject to any reservations and/or qualifications as to matters of law
which may be made in the legal opinions referred to in paragraphs 3, 4,
and 5 of Part 1 of the First Schedule, each Borrower represents that:
(i) STATUS It is a limited liability company duly organised under
the laws of the Cayman Islands with power to enter into the
Facility Documents and to exercise its rights and perform its
obligations under the Facility Documents and in respect of
Boss Ltd, as the relevant Borrower, it has the power to
register its Vessel in the office of the Norwegian
International Ship Register in Norway and, in respect of
Stavanger Sun Ltd as the relevant Borrower, it is duly
qualified as a foreign maritime entity in Liberia with the
power to register its Vessel in the office of the Deputy
Commissioner of Maritime Affairs of the Republic of Liberia in
New York;
(ii) DUE AUTHORISATION All corporate and other action required to
authorise the execution by it of the Facility Documents and
the performance of its obligations under the Facility
Documents has been duly taken;
(iii) NO DEDUCTIONS OR WITHHOLDING Under the laws of the Cayman
Islands and Liberia in force at the date hereof, it will not
be required to make any deduction or withholding from any
payment it may make under any of the Facility Documents;
(iv) CLAIMS PARI PASSU Without prejudice to the security
constituted by or pursuant to any Facility Documents under the
laws of the Cayman Islands and Liberia in force at the date
hereof, the claims of the Agent, the Banks and the Security
Trustee against it under any Facility Documents will, to the
extent that such claims exceed the realised value of the
security therefor, rank at least PARI PASSU with the claims of
all its other unsecured and non-subordinated creditors save
those whose claims are preferred solely by any bankruptcy,
insolvency or other similar laws of general application;
(v) NO IMMUNITY In any proceedings taken in the Cayman Islands in
relation to any of the Facility Documents, it will not be
entitled to claim for itself or any of its assets
<PAGE>
immunity from suit, execution, attachment or other legal
process;
(vi) GOVERNING LAW AND JUDGMENTS In any proceedings taken in the
Cayman Islands in relation to any of the Facility Documents,
the choice of English law as the governing law of those of the
Facility Documents as are expressed to be governed by English
law and any judgment obtained in England will be recognised
and enforced;
(vii) VALIDITY AND ADMISSIBILITY IN EVIDENCE Other than the
recording of the Mortgage over its Vessel, in respect of Boss
Ltd as the relevant Borrower, at the office of the Norwegian
International Ship Register and, in respect of Stavanger Sun
Ltd as the relevant Borrower, at the office of the Deputy
Commissioner of Maritime Affairs of the Republic of Liberia in
New York and any required registration in the Cayman Islands
all acts, conditions and things required to be done, fulfilled
and performed in order (a) to enable it lawfully to enter
into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in the Facility
Documents, (b) to ensure that the obligations expressed to be
assumed by it in the Facility Documents are legal, valid and
binding and (c) to make the Facility Documents admissible in
evidence in the Cayman Islands have been done, fulfilled and
performed;
(viii) NO FILING OR STAMP TAXES Under the laws of the Cayman Islands
in force at the date hereof, it is not necessary that any of
the Facility Documents be filed, recorded or enrolled with any
court or other authority in its jurisdiction of incorporation
or that any stamp, registration or similar tax be paid on or
in relation to any such Facility Documents; and
(ix) BINDING OBLIGATION The obligations expressed to be assumed by
it in the Facility Documents are legal and valid obligations
binding on it in accordance with the terms of such Facility
Documents.
12.2 Each Borrower further represents that:
(i) NO WINDING-UP It has not taken any corporate action nor have
any other steps been taken or legal proceedings been started
or (to the best of its knowledge and belief) threatened
against it for its winding-up, dissolution or reorganisation
or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or
of any or all of its assets or revenues;
(ii) NO MATERIAL DEFAULT It is not in breach of or in default under
any agreement to which it is a party or which is binding on it
or any of its assets to an extent or in a manner which might
have a material adverse effect on its business or financial
condition;
(iii) NO MATERIAL PROCEEDINGS No action or administrative proceeding
of or before any court or agency which might have a material
adverse effect on its business or financial condition has been
started or threatened;
(iv) NO OTHER BUSINESS It has not incurred any liabilities or
entered into any other commitments nor undertaken any business
other than in connection with the purchase
<PAGE>
or operation of its Vessel;
(v) NO UNDISCLOSED LIABILITIES As at the date hereof it has no
liabilities (contingent or otherwise) which have not been
disclosed to the Agent nor any unrealised or anticipated
losses arising from commitments entered into by it;
(vi) FULL DISCLOSURE Each of the Memorandum of Agreement, the
Initial Management Agreement and the Subsequent Management
Agreement in respect of its Vessel are in full force and
effect and has disclosed to the Agent all of the terms and
conditions of each such agreement and there are no amendments
or variations to any such document which have not been
disclosed to the Agent;
(vii) NO OBLIGATION TO CREATE SECURITY Its execution of the Facility
Documents and its exercise of its rights and performance of
its obligations thereunder will not result in the existence of
nor oblige it to create any encumbrance over all or any of its
present or future revenues or assets except pursuant to the
Facility Documents;
(viii) EXECUTION OF FACILITY DOCUMENTS Its execution of the Facility
Documents and its exercise of its rights and performance of
its obligations under the Facility Documents do not constitute
and will not result in any breach of any agreement or treaty;
(ix) ENCUMBRANCES Save as permitted by Clause 15(ix), no
encumbrance exists over all or any of its present or future
revenues or assets;
(x) OWNERSHIP OF THE BORROWER The Shareholder is the sole
shareholder of each Borrower;
(xi) OWNERSHIP OF THE SHAREHOLDER The General Partners are the only
general partners of the Shareholder; and
(xii) MANAGEMENT OF THE VESSEL Its Vessel will be managed by Det
Stavangerske Damskipsselskap, Norway in accordance with the
provisions of the relevant Initial Management Agreement until
the termination of such Initial Management Agreement and
thereafter by Universe Tankships (Bermuda) Ltd in accordance
with the provisions of the relevant Subsequent Management
Agreement.
13. INFORMATION COVENANTS
13.1 ANNUAL STATEMENTS
Each Borrower shall as soon as the same become available, but in any
event within one hundred and eighty days after the end of each of its
financial years, furnish to the Agent, its balance sheet as at the end
of such financial year and its profit-and-loss accounts in respect of
that financial year, in each case prepared in accordance with
internationally accepted accounting principles consistently applied.
13.2 SEMI-ANNUAL STATEMENTS
<PAGE>
Each Borrower shall as soon as the same become available, but in any
event within 90 days after the end of each of its financial half years,
furnish to the Agent, its balance sheet as at the end of such
accounting period and its profit-and-loss accounts in respect of that
accounting period, together with its cash flow reports for such period
in each case prepared in accordance with internationally accepted
accounting principles consistently applied.
13.3 NOTIFICATION OF EVENT OF DEFAULT
Each Borrower shall promptly inform the Agent of the occurrence of any
event which is or may become (with the passage of time, the giving of
notice, the making of any determination hereunder or any combination
thereof) an Event of Default and, upon receipt of a written request to
that effect from the Agent, promptly deliver to the Agent a written
confirmation given by a duly authorised officer of such Borrower to the
effect that, save as previously notified to the Agent or as notified in
such confirmation, no such event has occurred.
13.4 NOTIFICATION OF OFF-HIRE
Each Borrower shall promptly inform the Agent of any material
interruption in the operation of its Vessel (which shall include
situations where such Vessel is off-hire for a period of 5 days or more
at any one time) and the financial implications of such interruption.
13.5 OTHER FINANCIAL INFORMATION
Each Borrower shall from time to time on the request of the Agent use
its best endeavours to furnish the Agent with such other information
about its business, assets and financial condition (including financial
accounts and cash flow reports) as the Agent may reasonably request.
13.6 CHARTERING
Each Borrower shall promptly inform and furnish the Agent with such
information about its chartering activities as the Agent may reasonably
request.
14. FINANCIAL CONDITION
14.1 FAIR MARKET VALUE OF VESSEL
The Borrowers shall ensure that the aggregate of the Fair Market Value
of the Vessels over which the Security Trustee has a Mortgage as
established by R.S. Platou and H Clarkson Limited or such other two (2)
reputable brokers appointed by the Agent (after consultation with the
Borrower) shall at all times be equal to at least 140% of the Loan. If
at any time these ratios are not met, the Borrowers will forthwith on
the demand of the Agent prepay such portion of the Loan as will ensure
that such ratios are complied with. The Agent shall be entitled to
request such estimates of the Fair Market Value at least twice per
calendar year (or at any time after the occurrence of an Event of
Default) and the Borrowers shall promptly pay or reimburse to the Agent
the cost of obtaining such valuations.
14.2 MINIMUM WORKING CAPITAL
<PAGE>
The Borrowers shall between them maintain at all times Working Capital
(which shall mean Current Assets less Current Liabilities) of at least
$2,000,000.
14.3 NOTIFICATION OF FINANCIAL CONDITION Each Borrower shall deliver to the
Agent semi annually a certificate stating the Borrower's compliance
with the covenants undertaken pursuant to this Clause 14 with each of
the semi-annual financial statements delivered pursuant to Clause 13.2.
14.4 For the purposes of Clause 14.2:
"CURRENT ASSETS" means the aggregate of all assets of the Borrowers
which, in accordance with internationally accepted accounting
principles, would be classed as current assets; and
"CURRENT LIABILITIES" means the aggregate of all obligations of the
Borrowers which, in accordance with internationally accepted accounting
principles, would be considered as current liabilities, excluding all
amounts of principal due under this Facility within one year from the
date of calculation.
15. GENERAL COVENANTS
Each Borrower:
(i) shall obtain, comply with the terms of and do all that is
necessary to maintain in full force and effect all
authorisations, approvals, licences and consents required in
or by the laws and regulations of the Cayman Islands and all
other applicable jurisdictions to enable it lawfully to enter
into and perform its obligations under the Facility Documents
or to ensure the legality, validity, enforceability or
admissibility in evidence in the Cayman Islands and all other
applicable jurisdictions of the Facility Documents;
(ii) shall procure that no change of the classification or flag or
management of its Vessel shall occur without the prior written
consent of the Agent;
(iii) shall, in the event of total loss of its Vessel, procure that
the Advance made in respect of its Vessel is repaid within 90
days of the Agent's written notice (whether as a result of the
application of insurance proceeds or otherwise);
(iv) shall not, without the prior written consent of the Agent,
(such consent not to be unreasonably withheld) permit any
distributions of its profits or assets or pay any dividends or
other distributions to the Shareholder or any of the
Shareholder's partners;
(v) shall not make any loans, grant any credit (save in the
ordinary course of business) or give any guarantee or
indemnity to or for the benefit of any person or otherwise
voluntarily assume any liability, whether actual or
contingent, in respect of any obligations of any person;
<PAGE>
(vi) shall not, without prior written consent of the Agent, make
any investments which exceeds $250,000 with its assets of
(otherwise than by placing its cash into bank accounts with
the Agent) except for any investments required to maintain the
classification status of its Vessel;
(vii) shall not, without the prior written consent of the
Instructing Group and the Agent, permit any change to its
shareholding;
(viii) shall maintain all its bank accounts with the Agent's branch
in New York and shall only operate such accounts in accordance
with Clause 11 of the Assignment of Earnings and Insurances;
(ix) shall not, without the prior consent of the Agent, create or
permit to subsist any encumbrance over all or any of its
present or future revenues or assets other than the Permitted
Liens and any encumbrance created pursuant to the Facility
Documents and any second priority security over its Vessel and
its earnings, insurances and bank accounts in favour of the
Security Trustee on terms acceptable to the Agent to secure
its obligations under the Junior Facility Agreement;
(x) shall manage its business and procure that its Vessel is
managed in compliance with all applicable laws and regulations
applicable thereto and shall promptly notify the Agent of any
non-compliance other than of a minor or technical nature;
(xi) shall not engage in any other business other than the
ownership and chartering of its Vessel;
(xii) shall procure that its Vessel is at all times fully approved
by major oil companies relevant in its trade; and
(xiii) shall ensure that the technical management of its Vessel
remains with Det Stavangerske Damskipsselskap, Norway until
the termination of the relevant Initial Management Agreement
and thereafter with Universe Tankships (Bermuda) Ltd.
16. EVENTS OF DEFAULT
16.1 If:
(i) FAILURE TO PAY Either Borrower fails to pay any sum due from
it under this Agreement at any time in the currency and in the
manner specified herein or therein; or
(ii) MISREPRESENTATION Any representation or statement made by
either Borrower in any Facility Document or in any notice or
other document, certificate or statement delivered by it
pursuant hereto or thereto or in connection herewith or
therewith is or proves to have been incorrect or misleading in
any material respect when made; or
(iii) COVENANTS Either Borrower fails duly to perform the
obligations expressed to be assumed by it in Clause 14
(FINANCIAL CONDITION) or 15 (GENERAL COVENANTS); or
<PAGE>
(iv) INSURANCE Either Borrower fails to insure its Vessel in
accordance with the requirements of the Assignment of Earnings
and Insurances and/or the Mortgage; or
(v) OTHER OBLIGATION Either Borrower fails duly to perform or
comply with any other obligation expressed to be assumed by it
in any Facility Document and such failure is not remedied
within thirty days after the Agent has given notice to such
Borrower requiring the same to be remedied; or
(vi) CROSS DEFAULT If (a) any indebtedness of either Borrower or
the Shareholder or any General Partner is not paid when due
(or within any period of grace applicable thereto), (b) any
indebtedness of either Borrower or the Shareholder, or any
General Partner is declared to be or otherwise becomes due and
payable prior to its specified maturity or (c) any creditor of
either Borrower or the Shareholder or any General Partner,
becomes entitled to declare any indebtedness of either
Borrower or the Shareholder or any General Partner due and
payable prior to its specified maturity Provided that it shall
not be an Event of Default if, with respect to any General
Partner, the events specified in (a), (b) and (c) above are
genuinely disputed by such General Partner in appropriate
legal proceedings; or
(vii) INSOLVENCY AND RESCHEDULING Either Borrower or the Shareholder
or any General Partner is unable to pay its debts as they fall
due, commences negotiations with any one or more of its
creditors with a view to the general readjustment or
rescheduling of its indebtedness or makes a general assignment
for the benefit of or a composition with its creditors; or
(viii) WINDING-UP Otherwise than for the purposes of a reconstruction
on terms previously approved by the Instructing Group, either
Borrower or the Shareholder or any General Partner takes any
corporate action or other steps are taken or legal proceedings
are started for its winding-up, dissolution or re-organisation
or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or
of any or all of its revenues and assets; or
(ix) REPUDIATION Either Borrower repudiates any Facility Document
or does or causes to be done any act or thing evidencing an
intention to repudiate any such Facility Document; or
(x) LEGALITY OF FACILITY DOCUMENTS At any time any act, condition
or thing required to be done, fulfilled or performed in order
(a) to enable either Borrower lawfully to enter into, exercise
its rights under and perform its obligations expressed to be
assumed by it in the Facility Documents, (b) to ensure that
the obligations expressed to be assumed by either Borrower in
the Facility Documents are legal, valid and binding or (c) to
make any of the Facility Documents admissible in evidence in
the Cayman Islands is not done, fulfilled or performed; or
(xi) COMPLIANCE WITH OBLIGATIONS At any time it is or becomes
unlawful for either Borrower to perform or comply with any or
all of its obligations under any Facility Document or any of
the obligations of either Borrower under the Facility Document
<PAGE>
are not or cease to be legal, valid and binding; or
(xii) SEIZURE BY GOVERNMENT By or under the authority of any
government, (a) the management of either Borrower is wholly or
partially displaced or the authority of either Borrower in the
conduct of its business is wholly or partially curtailed or
(b) the whole or any part (the market value of which is twenty
per cent. or more of the market value of the whole) of its
revenues or assets is seized, nationalised, expropriated or
compulsorily acquired; or
(xiii) MATERIAL ADVERSE CHANGE There shall occur any event or
circumstance which in the opinion of the Instructing Group
may, or may be likely to, materially and adversely affect the
ability of either Borrower to discharge its obligations under
the Facility Documents in the manner provided therein; or
(xiv) VARIATION OR TERMINATION OF AGREEMENTS Either Memorandum of
Agreement is amended in any material manner without the prior
written consent of the Agent or terminated otherwise than by
reason of the due discharge of all obligations of each of the
parties thereto or if any party thereto is in breach of any of
its obligations thereunder; or
(xv) MANAGEMENT AGREEMENT If there is any material amendment to
either Initial Management Agreement or either Subsequent
Management Agreement or, either Initial Management Agreement
or either Subsequent Management Agreement is terminated or
otherwise ceases to be effective without the Agent's prior
written consent; or
(xvi) JUNIOR FACILITY Any event of default (howsoever described)
occurs under the Junior Facility Agreement; or
(xvii) PARTNERSHIP/OWNERSHIP STRUCTURE If there is any change in the
shareholding of either Borrower or of any General Partner
without the prior written consent of the Instructing Group; or
(xviii) ANALOGOUS EVENT If any event occurs to either Borrower, the
Shareholder or any General Partner under the laws of any other
jurisdiction which is analogous to any of the events or
circumstances referred to in paragraphs (vii) or (viii) above;
or
(xix) SWAP AGREEMENT Any event of default (howsoever described)
occurs under the Senior Interest Rate Swap Agreement,
then, and in any such case and at any time thereafter, the Agent may,
and shall if so instructed by the Instructing Group, by written notice
to the Borrowers:
(a) declare the Loan to be immediately due and payable (whereupon
the same shall become so payable together with accrued
interest thereon and any other sums then owed by the Borrowers
hereunder) or declare the Loan to be due and payable on demand
of the Agent; and/or
<PAGE>
(b) declare that the Facility Amount shall be cancelled, whereupon
the same shall be cancelled and the amount thereof reduced to
zero.
16.2 ADVANCE DUE ON DEMAND
If, pursuant to Clause 16.1, the Agent declares the Loan to be due and
payable on demand of the Agent, then, and at any time thereafter, the
Agent may by written notice to the Borrowers:
(i) call for repayment of the Loan on such date as it may specify
in such notice (whereupon the same shall become due and
payable on such date together with accrued interest thereon
and any other sums then owed by the Borrowers hereunder) or
withdraw its declaration with effect from such date as it may
specify in such notice; and/or
(ii) select as the duration of any Interest Period relating to an
Advance which begins whilst such declaration remains in effect
a period of six months or less.
17. DEFAULT INTEREST AND INDEMNITY
17.1 DEFAULT INTEREST PERIODS
If any sum due and payable by the Borrowers hereunder is not paid on
the due date therefor in accordance with the provisions of Clause 19
(PAYMENTS) or if any sum due and payable by the Borrowers under any
judgment of any court in connection with this Agreement is not paid on
the date of such judgment, the period beginning on such due date or, as
the case may be, the date of such judgment and ending on the date upon
which the obligation of the Borrowers to pay such sum (the balance
thereof for the time being unpaid being herein referred to as an
"UNPAID SUM") is discharged shall be divided into successive periods,
each of which (other than the first) shall start on the last day of the
preceding such period and the duration of each of which shall be
selected by the Agent.
17.2 DEFAULT INTEREST
During each such period relating thereto as is mentioned in Clause 17.1
(DEFAULT INTEREST PERIODS) an unpaid sum shall bear interest at the
rate per annum which is the sum from time to time of one per cent., the
Margin and LIBOR for that period Provided that:
(i) if, for any such period, LIBOR falls to be determined pursuant
to the proviso to the definition thereof but none of the
Reference Banks was offering dollar deposits for the period
aforesaid, the rate of interest applicable to such unpaid sum
shall be determined by reference to the cost to each Bank of
obtaining such deposits from such sources as it may select as
notified to the Agent; and
(ii) if such unpaid sum is all or part of an Advance which became
due and payable on a day other than the last day of an
Interest Period relating thereto, the first such period
applicable thereto shall be of a duration equal to the
unexpired portion of that Interest Period and the rate of
interest applicable thereto during such period shall be that
<PAGE>
which exceeds by one per cent. the rate which would have been
applicable to it had it not so fallen due.
17.3 PAYMENT OF DEFAULT INTEREST
Any interest which shall have accrued under Clause 17.2 (DEFAULT
INTEREST) in respect of an unpaid sum shall be due and payable and
shall be paid by the Borrowers at the end of the period by reference to
which it is calculated or on such other dates as the Agent may specify
by written notice to the Borrowers.
17.4 BROKEN PERIODS
If any Bank receives or recovers all or any part of such Bank's share
of an Advance otherwise than on the last day of an Interest Period
relating to such Advance, the Borrowers shall pay to the Agent on
demand an amount equal to the amount (if any) by which (a) the
additional interest which would have been payable on the amount so
received or recovered had it been received or recovered on the last day
of that Interest Period exceeds (b) the amount of interest which in the
opinion of the Agent would have been payable to the Agent on the last
day of that Interest Period in respect of a dollar deposit equal to the
amount so received or recovered placed by it with a prime bank in
London for a period starting on the third business day following the
date of such receipt or recovery and ending on the last day of that
Interest Period.
17.5 BORROWER'S INDEMNITY
The Borrowers jointly and severally undertake:
(i) to indemnify each of the Agent, each Bank and the Security
Trustee against any loss or expense, including legal fees on a
full indemnity basis, which any of them may sustain or incur
as a consequence of any default by either Borrower in the
performance of any of the obligations expressed to be assumed
by it in any of the Facility Documents to which it is a party;
and
(ii) to indemnify each Bank against any loss it may suffer as a
result of its funding its share of an Advance requested by
either Borrower hereunder but not made by reason of the
operation of any one or more of the provisions hereof.
17.6 Any unpaid sum shall (for the purposes of this Clause 17 and Clause
11.1 (INCREASED COSTS) be treated as an advance and accordingly in this
Clause 17 and Clause 11.1 (INCREASED COSTS) the term "Advance" includes
any unpaid sum and the term "Interest Period", in relation to an unpaid
sum, includes each such period relating thereto as is mentioned in
Clause 17.1 (DEFAULT INTEREST PERIODS).
<PAGE>
18. CURRENCY OF ACCOUNT AND PAYMENT
18.1 CURRENCY OF ACCOUNT
The dollar is the currency of account and payment for each and every
sum at any time due from the Borrowers hereunder Provided that each
payment in respect of costs and expenses shall be made in the currency
in which the same were incurred.
18.2 CURRENCY INDEMNITY
If any sum due from the Borrowers under any Facility Document to which
either Borrower is party or any order or judgment given or made in
relation hereto or thereto has to be converted from the currency (the
"FIRST CURRENCY") in which the same is payable under such Facility
Document or order or judgment into another currency (the "SECOND
CURRENCY") for the purpose of (i) making or filing a claim or proof
against either Borrower, (ii) obtaining an order or judgment in any
court or other tribunal or (iii) enforcing any order or judgment given
or made in relation to any Facility Document, the Borrowers shall
indemnify and hold harmless each of the persons to whom such sum is due
from and against any loss suffered as a result of any discrepancy
between (a) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(b) the rate or rates of exchange at which such person may in the
ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or
in part, of any such order, judgment, claim or proof.
19. PAYMENTS
19.1 PAYMENTS
On each date on which this Agreement requires an amount to be paid by
the Borrowers or a Bank hereunder, the Borrowers or, as the case may
be, such Bank shall make the same available to the Agent by payment in
dollars and in same day funds (or in such other funds as may for the
time being be customary in New York City for the settlement in New York
City of international banking transactions in dollars) to the account
of the Agent in Oslo or such other account as the Agent may have
specified for this purpose.
19.2 NO SET-OFF
All payments made by the Borrowers hereunder shall be made free and
clear of and without any deduction for or on account of any set-off or
counterclaim.
20. SET-OFF
Each Borrower authorises each Bank at any time following the occurrence
of an Event of Default to apply any credit balance to which either
Borrower is entitled on any account of either Borrower with such Bank
in satisfaction of any sum due and payable from the Borrowers to such
Bank under this Agreement but unpaid; for this purpose, such Bank is
authorised to purchase with the moneys standing to the credit of any
such account such other
<PAGE>
currencies as may be necessary to effect such application.
21. SHARING
21.1 REDISTRIBUTION OF PAYMENTS
If at any time, the proportion which any Bank (a "RECOVERING BANK") has
received or recovered (whether by payment, the exercise of a right of
set-off or combination of accounts or otherwise) in respect of its
portion of any payment (a "RELEVANT PAYMENT") to be made under this
Agreement by the Borrowers for account of such Recovering Bank and one
or more other Banks is greater (the portion of such receipt or recovery
giving rise to such excess proportion being herein called an "EXCESS
AMOUNT") than the proportion thereof so received or recovered by the
Bank or Banks so receiving or recovering the smallest proportion
thereof, then:
(i) such Recovering Bank shall pay to the Agent an amount equal to
such excess amount;
(ii) there shall thereupon fall due from such Recovering Bank an
amount equal to the amount paid out by such Recovering Bank
pursuant to paragraph (i) above, the amount so due being, for
the purposes hereof, treated as if it were an unpaid part of
such Recovering Bank's portion of such relevant payment; and
(iii) the Agent shall treat the amount received by it from such
Recovering Bank pursuant to paragraph (i) above as if such
amount had been received by it from the Borrowers in respect
of such relevant payment and shall pay the same to the persons
entitled thereto (including such Recovering Bank) PRO RATA to
their respective entitlements thereto.
21.2 REPAYABLE RECOVERIES
If any sum (a "RELEVANT SUM") received or recovered by a Recovering
Bank in respect of any amount owing to it by the Borrowers becomes
repayable and is repaid by such Recovering Bank, then:
(i) each Bank which has received a share of such relevant sum by
reason of the implementation of Clause 19.1 (PAYMENTS) shall,
upon request of the Agent, pay to the Agent for account of
such Recovering Bank an amount equal to its share of such
relevant sum; and
(ii) there shall thereupon fall due from the Borrowers to each such
Bank an amount equal to the amount paid out by it pursuant to
paragraph (i) above, the amount so due being, for the purposes
hereof, treated as if it were the sum payable to such Bank
against which such Bank's share of such relevant sum was
applied.
22. FEES
22.1 ARRANGEMENT FEE
<PAGE>
The Borrowers shall pay to the Agent for its own account hereunder an
arrangement fee of the amount specified in the letter exchanged between
the Agent and General Maritime Corporation dated 23 September 1997 such
fee to be payable by two equal instalments. The first instalment to be
payable at the first Drawdown Date and the second instalment to be
payable at the second Drawdown Date, or if earlier, on cancellation of
the Facility Amount.
22.2 AGENCY FEE
The Borrowers shall pay to the Agent for its own account a
non-refundable agency fee of the amount specified in the letter
exchanged between the Agent and General Maritime Corporation dated 23
September, 1997 such fee to be payable on the first Drawdown Date and
on each anniversary thereof.
23. COSTS AND EXPENSES
23.1 TRANSACTION EXPENSES
The Borrowers shall, from time to time on demand of the Agent,
reimburse the Agent for all costs and expenses (including legal fees)
incurred by it in connection with the negotiation, preparation and
execution of the Facility Documents and the completion of the
transactions herein contemplated.
23.2 PRESERVATION AND ENFORCEMENT OF RIGHTS
The Borrowers shall, from time to time on demand of the Agent,
reimburse the Agent, the Banks and the Security Trustee for all costs
and expenses (including legal fees) incurred in or in connection with
the preservation and/or enforcement of any of the rights of the Agent,
the Banks and the Security Trustee under the Facility Documents.
23.3 STAMP TAXES
The Borrowers shall pay all stamp, registration and other taxes to
which any Facility Document or any judgment given in connection with
any Facility Document is or at any time may be subject and shall, from
time to time on demand of the Agent, indemnify the Security Trustee and
the Bank against any liabilities, costs, claims and expenses resulting
from any failure to pay or any delay in paying any such tax.
23.4 BANKS' LIABILITIES FOR COSTS
If either Borrower fails to perform any of its obligations under this
Clause 23, each Bank shall, in the proportion borne by its share of the
Loan to the amount of the Loan for the time being indemnify the Agent
against any loss incurred by it as a result of such failure and the
Borrowers shall forthwith reimburse each Bank for any payment made by
it pursuant to this Clause 23.4.
<PAGE>
24. THE AGENT AND THE BANKS
24.1 APPOINTMENT OF THE AGENT
Each Bank hereby appoints the Agent to act as its agent in connection
with this Agreement and the other Facility Documents and authorises the
Agent to exercise such rights, powers and discretions as are
specifically delegated to the Agent by the terms hereof together with
all such rights, powers and discretions as are reasonably incidental
thereto.
24.2 AGENT'S DISCRETIONS
The Agent may:
(i) assume that:
(a) any representation made by either Borrower in
connection with this Agreement and the other Facility
Documents is true;
(b) no event which is or may become an Event of Default
has occurred; and
(c) neither Borrower is in breach of or default under its
obligations with this Agreement and the other
Facility Documents
unless it has actual knowledge or actual notice to the
contrary;
(ii) assume that the Facility Office of each Bank is that
identified with its signature (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it
is a party as Transferee) below until it has received from
such Bank a notice designating some other office of such Bank
to replace its Facility Office and act upon any such notice
until the same is superseded by a further such notice;
(iii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or
services may to it seem necessary, expedient or desirable and
rely upon any advice so obtained;
(iv) rely as to any matters of fact which might reasonably be
expected to be within the knowledge of the Borrowers upon a
certificate signed by or on behalf of the Borrowers;
(v) rely upon any communication or document believed by it in good
faith to be genuine;
(vi) refrain from exercising any right, power or discretion vested
in it as agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised,
as to the manner in which it should be exercised; and
(vii) refrain from acting in accordance with any instructions of an
Instructing Group to
<PAGE>
begin any legal action or proceeding arising out of or in
connection with this Agreement until it shall have received
such security as it may require (whether by way of payment in
advance or otherwise) for all costs, claims, expenses
(including legal fees) and liabilities which it will or may
expend or incur in complying with such instructions.
24.3 AGENT'S OBLIGATIONS
The Agent shall:
(i) promptly inform each Bank of the contents of any notice or
document received by it from either Borrower under this
Agreement and the other Facility Documents;
(ii) promptly notify each Bank of the occurrence of any Event of
Default or any default by either Borrower in the due
performance of or compliance with its obligations under this
Agreement and the other Facility Documents of which the Agent
has actual knowledge or actual notice;
(iii) save as otherwise provided herein, act as agent hereunder in
accordance with any instructions given to it by an Instructing
Group, which instructions shall be binding on all the Banks;
and
(iv) if so instructed by an Instructing Group, refrain from
exercising any right, power or discretion vested in it as
agent hereunder.
24.4 EXCLUDED OBLIGATIONS
Notwithstanding anything to the contrary expressed or implied herein,
the Agent shall not:
(i) be bound to enquire as to:
(a) whether or not any representation made by either
Borrower in connection with the Facility Documents is
true;
(b) the occurrence or otherwise of any event which is or
may become an Event of Default;
(c) the performance by either Borrower of its obligations
under any of the Facility Documents; or
(d) any breach of or default by either Borrower of or
under its obligations under any of the Facility
Documents;
(ii) be bound to account to each Bank for any sum or the profit
element of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information
relating to either Borrower if such disclosure would or might
in its opinion constitute a breach of any law or
<PAGE>
regulations or be otherwise actionable at the suit of any
person; or
(iv) be under any obligations other than those for which express
provision is made herein.
24.5 INDEMNIFICATION
Each Bank shall, from time to time on demand by the Agent, indemnify
the Agent, in the proportion its share of the Loan bears to the amount
of the Loan at the time of such demand or, if the Loan has then been
repaid in full, against any and all costs, claims, losses, expenses
(including legal fees) and liabilities together with any VAT thereon
which the Agent may incur, otherwise than by reason of its own
negligence or wilful misconduct, in acting in its capacity as agent
hereunder.
24.6 EXCLUSION OF LIABILITIES
The Agent does not accept any responsibility for the accuracy and/or
completeness of information supplied by the Borrowers in connection
herewith or with any other Facility Document or for the legality,
validity, effectiveness, adequacy or enforceability of this Agreement
or any other Facility Document and the Agent shall not be under any
liability as a result of taking or omitting to take any action in
relation to this Agreement or any other Facility Document, save in the
case of gross negligence or wilful misconduct.
24.7 NO ACTION
Each Bank agrees that it will not assert or seek to assert against any
director, officer or employee of the Agent any claim it might have
against any of them in respect of the matters referred to in Clause
24.6 (EXCLUSION OF LIABILITIES).
24.8 BUSINESS WITH THE BORROWER
The Agent and each of the Banks may accept deposits from, lend money to
and generally engage in any kind of banking or other business with the
Borrowers.
24.9 RESIGNATION
The Agent may resign its appointment hereunder at any time without
assigning any reason therefor by giving not less than thirty days'
prior written notice to that effect to each of the other parties hereto
Provided that no such resignation shall be effective until a successor
for the Agent is appointed in accordance with the succeeding provisions
of this Clause 24.
24.10 SUCCESSOR AGENT
If the Agent gives notice of its resignation pursuant to Clause 24.9
then any reputable and experienced bank or other financial institution
may be appointed as a successor to the Agent by an Instructing Group
with the Borrowers' consent (such consent not to be unreasonably
delayed or withheld) during the period of such notice but, if no such
successor is so appointed, the Agent may appoint such a successor
itself.
<PAGE>
24.11 RIGHTS AND OBLIGATIONS
If a successor to the Agent is appointed under the provisions of Clause
24.10 (SUCCESSOR AGENT), then (i) the retiring Agent shall be
discharged from any further obligation hereunder but shall remain
entitled to the benefit of the provisions of this Clause 24 and (ii)
its successor and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if
such successor had been a party hereto.
24.12 OWN RESPONSIBILITY
It is understood and agreed by each Bank that it has itself been, and
will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the
Borrowers and, accordingly, each Bank warrants to the Agent that it has
not relied and will not hereafter rely on the Agent:
(i) to check or enquire on its behalf into the adequacy, accuracy
or completeness of any information provided by the Borrowers
in connection with the Facility Documents or the transactions
therein contemplated (whether or not such information has been
or is hereafter circulated to each Bank by the Agent); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of the Borrowers.
24.13 AGENCY DIVISION SEPARATE
In acting as agent hereunder for the 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 and,
notwithstanding the foregoing provisions of this Clause 24, any
information received by some other division or department of the Agent
may be treated as confidential and shall not be regarded as having been
given to the Agent's agency division.
24.14 CONFIDENTIAL INFORMATION
Notwithstanding anything to the contrary expressed or implied herein
and without prejudice to the provisions of Clause 24.13 (AGENCY
DIVISION SEPARATE), the Agent shall not as between itself and the Banks
be bound to disclose to any Bank or other person any information which
is supplied by either Borrower to the Agent in its capacity as agent
hereunder for the Banks and which is identified by such Borrower at the
time it is so supplied as being confidential information Provided that
the consent of the Borrowers to such disclosure shall not be required
in relation to any information which in the opinion of the Agent
relates to an Event of Default or in respect of which the Banks have
given a confidentiality undertaking in a form satisfactory to the Agent
and the Borrowers.
25. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its
<PAGE>
successors and permitted assigns.
26. ASSIGNMENTS AND TRANSFERS
26.1 NO ASSIGNMENT AND TRANSFER BY THE BORROWERS
No Borrower shall be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder.
26.2 ASSIGNMENTS AND TRANSFERS BY BANKS
Any Bank may at any time (and at its own cost) assign or transfer all
or any of its rights and benefits hereunder.
26.3 ASSIGNMENTS BY BANKS
If any Bank assigns all or any of its rights and benefits hereunder in
accordance with Clause 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS), then,
unless and until the assignee has agreed with the Agent and the
Security Trustee that it shall be under the same obligations towards
each of them as it would have been under if it had been an original
party hereto as a Bank, the Agent and the Security Trustee shall not be
obliged to recognise such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
26.4 TRANSFERS BY BANKS
If a Bank wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 26.2 (ASSIGNMENTS AND
TRANSFERS BY BANKS), then such transfer may be effected by the delivery
to the Agent and the Borrowers of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date
specified in such Transfer Certificate and the fifth business day after
(or such earlier business day endorsed by the Agent on such Transfer
Certificate) the date of delivery of such Transfer Certificate to the
Agent:
(i) to the extent that in such Transfer Certificate such Bank
seeks to transfer its rights and obligations hereunder, the
Borrowers and such Bank shall be released from further
obligations towards one another hereunder and their respective
rights against one another shall be cancelled (such rights and
obligations being referred to in this Clause 26.4 as
"DISCHARGED RIGHTS AND OBLIGATIONS"); and
(ii) the Borrowers and the Transferee party thereto shall assume
obligations towards one another and/or acquire rights against
one another which differ from such discharged rights and
obligations only insofar as the Borrowers and such Transferee
have assumed and/or acquired the same in place of the
Borrowers and such Bank;
26.5 TRANSFER FEES
On the date upon which a transfer takes effect pursuant to this Clause
26, the Transferee in
<PAGE>
respect of such transfer shall pay to the Agent for its own account a
transfer fee of $500.
26.6 OTHER ASSIGNMENTS AND TRANSFERS BY BANKS
Any assignment or transfer which is not contemplated by the express
provisions of this Clause 26 may only be made by a Bank with the prior
written consent of the Borrowers and in such event, the provisions of
Clauses 26.2 (ASSIGNMENTS AND TRANSFERS BY BANKS), 26.4 (TRANSFERS BY
BANKS) and 26.5 (TRANSFER FEES) shall apply MUTATIS MUTANDIS thereto.
26.7 DISCLOSURE OF INFORMATION
Any Bank may, with the prior written consent of the Borrowers (such
consent not to be unreasonably withheld or delayed), disclose to any
actual or potential assignee or to any person who may otherwise enter
into contractual relations with such Bank in relation to this Agreement
such information about the Borrowers as such Bank and the Borrowers
shall consider appropriate.
27. CALCULATIONS AND EVIDENCE OF DEBT
27.1 BASIS OF ACCRUAL
Interest and commitment commission shall accrue from day to day and
shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed.
27.2 EVIDENCE OF DEBT
Each Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it
hereunder; in any legal action or proceeding arising out of or in
connection with this Agreement and other Facility Documents, the
entries made in such accounts shall be conclusive evidence of the
existence and amounts of the obligations of the Borrowers therein
recorded.
27.3 CONTROL ACCOUNTS
The Agent shall maintain on its books a control account or accounts in
which shall be recorded (i) the amount of each advance made hereunder
by the Banks, (ii) the amount of all principal, interest and other sums
due or to become due from the Borrowers to each of the Banks under the
Facility Documents and (iii) the amount of any sum received or
recovered by the Agent under the Facility Documents and each Bank's
share therein. To the extent that discrepancies exist between accounts
maintained by each Bank pursuant to clause 27.2 (EVIDENCE OF DEBT) and
control accounts maintained by the Agent under this Clause 27.3, the
control accounts herein maintained shall prevail.
27.4 PRIMA FACIE EVIDENCE
In any legal action or proceeding arising out of or in connection with
this Agreement and/or any other Facility Document, the entries made in
the accounts maintained pursuant to Clause 27.2 (EVIDENCE OF DEBT) or
Clause 27.3 (CONTROL ACCOUNTS) shall be PRIMA FACIE evidence of
<PAGE>
the existence and extent of the obligations of the Borrowers therein
recorded.
27.5 CHANGE OF CIRCUMSTANCE CERTIFICATES
A certificate of the Bank as to (a) the amount by which a sum payable
to it hereunder is to be increased under Clause 10.1 (TAX GROSS-UP) or
(b) the amount for the time being required to indemnify it against any
such cost or liability as is mentioned in Clause 10.2 (TAX INDEMNITY)
or 11.1 (INCREASED COSTS) shall, in the absence of manifest error, be
conclusive for the purposes of this Agreement and PRIMA FACIE evidence
in any legal action or proceeding arising out of or in connection with
this Agreement.
28. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the
Agent, any Bank and the Security Trustee or any of them, any right or
remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy.
The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
29. PARTIAL INVALIDITY
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.
30. NOTICES
30.1 COMMUNICATIONS IN WRITING
Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, facsimile or letter.
30.2 COMMUNICATIONS THROUGH THE AGENT
Each communication between the Banks and the Borrowers hereunder shall
only be effected through the Agent.
30.3 DELIVERY
Any communication or document to be made or delivered by one party to
the other pursuant to this Agreement shall (unless the other party has
by three days' written notice to the one specified another address or
telex or facsimile number) be made or delivered to that other party at
the address or telex or facsimile number identified with its signature
below and shall be deemed to have been made or delivered when
despatched and answerback received (in the case of any communication
made by telex) or (in the case of any communication made by facsimile)
when legibly received or (in the case of any communication made by
letter) when left at that address or (as the case may be) ten days
after being deposited in the post postage
<PAGE>
prepaid in an envelope addressed to it at that address Provided that:
(i) if any such communication or document would otherwise be
deemed to have been received on a day which is not a business
day it shall be deemed to have been received on the first
business day thereafter; and
(ii) any communication or document to be made or delivered by the
Borrowers to each Bank shall be effective only when legibly
received by the Bank and then only if the same is expressly
marked for the attention of the department or officer
identified with such Bank's signature below (or such other
department or officer as such Bank shall from time to time
specify for this purpose).
30.4 ENGLISH LANGUAGE
Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true
and accurate translation thereof.
30.5 NOTICE BINDING
Notice by either Borrower made hereunder shall be binding on both the
Agent and the Banks and the Agent and the Banks can ignore any
subsequent conflicting notice.
31. LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
32. JURISDICTION
32.1 ENGLISH COURTS
Each of the parties hereto irrevocably agrees for the benefit of the
Agent, the Banks and the Security Trustee that the courts of England
shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and, for such purposes, irrevocably
submits to the jurisdiction of such courts.
32.2 APPROPRIATE FORUM
Each Borrower irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 32.1 (ENGLISH
COURTS) being nominated as the forum to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out
of or in connection with this Agreement and agrees not to claim that
any such court is not a convenient or appropriate forum.
<PAGE>
32.3 SERVICE OF PROCESS
Each Borrower agrees that the process by which any suit, action or
proceeding in England is begun may be served on it by being delivered
to Clifford Chance Secretaries Limited at 200 Aldersgate Street,
London, EC1A 4JJ or other of its registered offices for the time being.
32.4 NON-EXCLUSIVE SUBMISSIONS
The submission to the jurisdiction of the courts referred to in Clause
32.1 (ENGLISH COURTS) shall not (and shall not be construed so as to)
limit the right of the Agent, the Banks or the Security Trustee to take
proceedings against either Borrower in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
THE FIRST SCHEDULE
CONDITION PRECEDENT DOCUMENTS
PART 1
1. In relation to each Borrower, the Shareholder and the Managing General
Partner (herein together referred to as the "RELEVANT PARTIES"):
(i) a copy, certified a true copy by a duly authorised officer of
the relevant Borrower, of a Board Resolution of such Borrower
approving the execution, delivery and performance of each of
the Facility Documents to which it is a party and the terms
and conditions thereof and authorising a named person or
persons to sign each of the Facility Documents to which it is
a party;
(ii) a copy, certified a true copy by a duly authorised officer of
the Managing General Partner of the Shareholder's Certificate
of Registration as a Limited Partnership and its Limited
Partnership Agreement;
(iii) a copy, certified a true copy by a duly authorised officer of
the Relevant Party, of the constitutive documents of such
Relevant Party;
(iv) a certificate of a duly authorised officer of the relevant
Borrower, setting out the names and signatures of the persons
authorised to sign, on behalf of such Borrower, the Facility
Documents to which it is a party and any documents to be
delivered by it pursuant hereto or thereto; and
(v) a copy certified a true copy by a duly authorised officer of
the relevant Borrower, of the proforma opening balance sheet
of such Borrower evidencing its capital structure including
the amount of its Working Capital;
(vi) a certificate of a duly authorised officer of the Managing
General Partner of the Shareholder setting out the partners
(both general and limited) of the Shareholder; and
(vii) a certificate of a duly authorised officer of each Borrower
certifying that the Shareholder is the sole Shareholder of
such Borrower.
2. A copy of the Cayman Islands Exempted Limited Partnership Law and of
each such other law, decree, consent, licence, approval, registration
or declaration as is, in the opinion of counsel to the Banks, necessary
to render the Facility Documents legal, valid, binding and enforceable,
to make them admissible in evidence in the Cayman Islands and Liberia
and to enable each Borrower lawfully to perform its obligations under
the Facility Documents.
3. An opinion of the Banks' counsel in relation to Liberian and New York
law in a form satisfactory to the Banks.
<PAGE>
4. An opinion of the Banks' Cayman Islands counsel in a form satisfactory
to the Banks.
5. An opinion of Clifford Chance in a form satisfactory to the Banks.
6. Evidence that Clifford Chance Secretaries Limited has agreed to act as
the agent of each Borrower for the service of process in England.
7. A Priority Agreement between the Borrowers, the Banks and the Agent
under this Agreement and the Agent and the lenders under the Junior
Facility Agreement.
8. A copy, certified to be a true copy by a duly authorised officer of the
relevant Borrower of each of the Memorandum of Agreements showing the
purchase price of the Stavanger Boss (to be renamed Boss) to be
$25,750,00 and the Stavanger Sun (to be renamed Sun) to be $25,900,000.
9. Details of the managers of the Vessels and a certified true copy of
each Initial Management Agreement and each Subsequent Management
Agreement for each Vessel in a form acceptable to the Banks.
10. Confirmation that the technical management of each of the Vessels is or
will be with firstly, Det Stavangerske Damskipsselskap, Norway and
secondly with Universe Tankships (Bermuda) Ltd.
<PAGE>
PART 2
Each of the following documents duly executed by the Borrower which is the
purchaser of the Vessel which is to be purchased with the relevant Advance.
1. (i) In respect of Stavanger Sun Ltd as the relevant Borrower, a
first preferred Liberian ship mortgage granted by such
Borrower over its Vessel in favour of the Security Trustee in
a form acceptable to the Agent.
(ii) In respect of Boss Ltd as the relevant Borrower, the Norwegian
International Ship Mortgages granted by such Borrower over its
Vessel in favour of the Security Trustee in a form acceptable
to the Agent.
2. An assignment of earnings and insurances agreement entered into by such
Borrower in favour of the Security Trustee to secure the Borrower's
obligations under this Agreement in a form acceptable to the Agent.
3. An assignment of such Borrower's bank accounts in a form acceptable to
the Agent.
4. A security trust deed whereby the Security Trustee agrees to hold the
benefit of the security created by the mortgage and the assignment of
earnings and insurances and the assignment of accounts referred to in
paragraphs 1, 2 and 3 above on trust for the Beneficiaries named
therein in a form acceptable to the Agent.
5. All notices to be given under the assignments referred to in 2 and 3
above.
6. The Protocol of Delivery and Acceptance of its Vessel duly signed by
such Borrower and the Seller.
7. (i) In respect of Stavanger Sun Ltd as the relevant Borrower,
evidence of deletion of its Vessel from Norwegian flag and
evidence of registration under Liberian flag.
(ii) In respect of Boss Ltd as the relevant Borrower, evidence of
registration of its Vessel under the Norwegian flag.
8. Valid up-to-date class certificates from a classification society
acceptable to the Agent and showing its Vessel to be in a class
acceptable to the Agent, without extension or recommendations.
9. A copy of the Bill of Sale relating to its Vessel and any other
documents required to be produced by the Seller or the Borrower
pursuant to the Memorandum of Agreement.
10. Evidence of the discharge of any existing mortgages over its Vessel.
<PAGE>
THE SECOND SCHEDULE
NOTICE OF DRAWDOWN
From: Boss Ltd./Stavanger Sun Ltd.
To: Christiania Bank og Kreditkasse ASA as Agent
Dear Sirs,
1. We refer to the agreement (the "FACILITY AGREEMENT") dated __________
1997 and made between ourselves as borrowers, yourselves as agent and security
trustee and the Initial Bank as defined therein. Terms defined in the Facility
Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Facility Agreement and
on _____________________, we wish to borrow the amount of ________________
United States Dollars (being an amount equal to the lesser of the amount of the
Facility Amount and 57 per cent. of the purchase price of the m/t "STAVANGER
BOSS/STAVANGER SUN upon the terms and subject to the conditions contained
therein.
3. We would like the Advance to have a first Interest Period of:
First Choice: _____________________________ months' duration.
Second Choice:* __________________________ months' duration.
4. We further confirm that, at the date hereof, the representations set
out in Clauses 12.1 and 12.2 of the Facility Agreement are true and that no
event which is or may become (with the passage of time, the giving of notice,
the making of any determination under the Facility Agreement or any combination
thereof) an Event of Default has occurred.
5. The proceeds of this drawdown should be credited to our account with
the Agent's New York branch.
Yours faithfully
----------------------------
for and on behalf of
BOSS LTD./STAVANGER SUN LTD.
--------------------------------------------------------------------------------
* Only if the first choice Interest Period is twelve months.
<PAGE>
THE THIRD SCHEDULE
FORM OF TRANSFER CERTIFICATE
To: Christiania Bank og Kreditkasse ASA (as Agent) and
Boss Ltd. and Stavanger Sun Ltd.
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "FACILITY AGREEMENT") dated [ ] whereby a
US$30,000,000 loan facility was made available to Boss Ltd. and Stavanger Sun
Ltd. (the "BORROWERS") by the Initial Bank as defined therein in connection
with which Christiania Bank og Kreditkasse ASA acted as Agent and Security
Trustee.
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank, Transferee, Bank's
Participation and Amount Transferred are defined in the schedule hereto.
2. The Bank confirms that the Bank's Participation is an accurate summary
of its participation in the Facility Agreement and requests the Transferee to
accept and procure the transfer to the Transferee of a percentage of the Bank's
Participation (equal to the percentage that the Amount Transferred is of the
aggregate of the component amounts (as set out in the Schedule hereto) of the
Bank's Participation) by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of notices specified in
the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 26.2 of the Facility Agreement so as to take effect in accordance with
the terms thereof on the Transfer Date or on such later date as may be
determined in accordance with the terms thereof.
4. The Transferee warrants that it has received a copy of the Facility
Agreement together with such other information as it has required in connection
with this transaction and that it has not relied and will not hereafter rely on
the Bank to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Bank to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of either Borrower.
5. The Transferee hereby undertakes with the Bank and each of the other
parties to the Facility Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Facility Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of the Facility Agreement or any
<PAGE>
document relating thereto and assumes no responsibility for the financial
condition of the Borrower or for the performance and observance by either
Borrower of any of its obligations under the Facility Agreement or any document
relating thereto and any and all such conditions and warranties, whether express
or implied by law or otherwise, are hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the Facility
Agreement (or any document relating thereto) shall oblige the Bank to (i) accept
a re-transfer from the Transferee of the whole or any part of its rights,
benefits and/or obligations under the Facility Agreement transferred pursuant
hereto or (ii) support any losses directly or indirectly sustained or incurred
by the Transferee for any reason whatsoever including, without limitation, the
non-performance by either Borrower or any other party to the Facility Agreement
(or any document relating thereto) of its obligations under any such document.
The Transferee hereby acknowledges the absence of any such obligations under any
such document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) or (ii) above.
8. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English law.
SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Bank's Participation:
Bank's portion of the Loan:
Bank's Commitment:
5. Amount Transferred:
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
Address:
<PAGE>
THE FOURTH SCHEDULE
<TABLE>
<CAPTION>
THE BORROWERS THE VESSELS THE SELLERS
<S> <C> <C>
Boss Ltd., a company M/T Stavanger Boss KS Stavanger Boss
duly incorporated under (to be renamed "Boss")
the laws of the Cayman
Islands
Stavanger Sun Ltd., M/T Stavanger Sun KS Stavanger Sun
a company duly incorporated (to be renamed "Sun")
under the laws of the Cayman Islands
</TABLE>
<PAGE>
EXECUTED as an Agreement
THE BORROWERS
BOSS LTD.
By: Peter Georgiopoulos
Address: c/o General Maritime III Corporation
730 Fifth Avenue (15th Floor)
New York
NY 10019
USA
Attention: Peter Georgiopoulos
Tel: (212) 698 9630
Fax: (212) 698 9628
STAVANGER SUN LTD.
By: Peter Georgiopoulos
Address: c/o General Maritime Corporation
730 Fifth Avenue (15th Floor)
New York
NY 10019
USA
Attention: Peter Georgiopoulos
Tel: (212) 698 9630
Fax: (212) 698 9628
THE AGENT AND SECURITY TRUSTEE
CHRISTIANIA BANK OG KREDITKASSE ASA
By: Amelia Sweetland, Attorney in Fact
Address: PO Box 1166
Sentrum
0107 Oslo
Norway
Attention:
Tel: 47 2248 5000
Fax: 47 2248 6668
<PAGE>
THE INITIAL BANK
CHRISTIANIA BANK OG KREDITKASSE ASA
By: Amelia Sweetland, Attorney in Fact
Address: PO Box 1166
Sentrum
0107 Oslo
Norway
Attention: Shipping Department
Tel: 47 2248 5000
Fax: 47 2248 6668
