<PAGE>
SENIOR FACILITY AGREEMENT
between
GENERAL MARITIME I, L.P.
as borrower
CHRISTIANIA BANK OG KREDITKASSE ASA
as agent and security trustee
and
THE BANKS
as lenders
Clifford Chance
London
<PAGE>
CONTENTS
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Clause Page
<S> <C>
1. Interpretation .................................................... 1
2. The Facility ...................................................... 8
3. Purpose ........................................................... 8
4. Conditions Precedent .............................................. 8
5. Nature of Banks' Rights and Obligations ........................... 8
6. Availability ...................................................... 8
7. Interest Periods .................................................. 9
8. Interest .......................................................... 10
9. Repayment and Prepayment .......................................... 11
10. Taxes and Tax Receipts ............................................ 12
11. Changes in Circumstances .......................................... 14
12. Representations ................................................... 16
13. Information Covenants ............................................. 18
14. Financial Condition ............................................... 19
15. General Covenants ................................................. 20
16. Events of Default ................................................. 22
17. Default Interest and Indemnity .................................... 25
18. Currency of Account and Payment ................................... 26
19. Payments .......................................................... 27
20. Set-Off ........................................................... 27
21. Sharing ........................................................... 27
22. Fees .............................................................. 28
23. Costs and Expenses ................................................ 29
24. The Agent and the Banks ........................................... 29
25. Benefit of Agreement .............................................. 34
26. Assignments and Transfers ......................................... 34
27. Calculations and Evidence of Debt ................................. 35
28. Remedies and Waivers .............................................. 36
29. Partial Invalidity ................................................ 36
30. Notices ........................................................... 36
31. Law ............................................................... 37
32. Jurisdiction ...................................................... 37
The First Schedule
Condition Precedent Documents ............................................ 39
The Second Schedule
Notice of Drawdown ....................................................... 43
The Third Schedule
Form of Transfer Certificate ............................................. 44
The Fourth Schedule
The Banks ................................................................ 46
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<PAGE>
THIS AGREEMENT is made on 15 May 1997
BETWEEN:
(1) GENERAL MARITIME I, L.P. (the "BORROWER");
(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) THE BANKS (as defined below).
RECITALS
A. The Banks have agreed to grant to the Borrower, upon the terms and subject
to the conditions herein set forth, a loan facility in the amount of up to
$27,000,000.
B. By a further Loan Agreement (the "JUNIOR FACILITY AGREEMENT") of even date
herewith and made between the Borrower, the Agent, the Security Trustee and
Christiania Bank og Kreditkasse ASA as Initial Bank, the Initial Bank has
agreed to lend to the Borrower a further sum of up to $3,000,000 secured by
second ranking security over the assets mortgaged or charged by the
Borrower to the Security Trustee pursuant to the Financing Documents
defined therein.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"ADMINISTRATIVE GENERAL PARTNER" means General Maritime (Alta) Ltd., a
company duly incorporated under the laws of Cayman Islands;
"ADVANCE" means, save as otherwise provided herein, the advance made or to
be made by the Banks hereunder;
"ASSIGNMENT OF ACCOUNTS" means the assignment of the Guarantor accounts to
be executed by the Guarantor pursuant to paragraph 3 of Part 2 of the First
Schedule;
"ASSIGNMENT OF EARNINGS AND INSURANCES" means an assignment of earnings and
insurances to be entered into by the Guarantor in favour of the Security
Trustee named therein pursuant to paragraph 2, Part 2 of the First
Schedule;
"BANKS" means the financial institutions named in the Fourth Schedule and
any Transferees of such named financial institutions (and any subsequent
Transferees) and "BANK" means each of the Banks;
<PAGE>
"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;
"CAYMAN ISLANDS" means the Cayman Islands;
"CHARTER" means the time charterparty dated 31 March 1997 (as from time to
time amended or novated) pursuant to which the Guarantor has agreed to
charter the Vessel to the Charterer for a period of at least 5 years from
the Drawdown Date;
"CHARTERER" means Mendala II Transport, Inc.;
"CHARTER GUARANTEE" means the guarantee entered or to be entered into
pursuant to paragraph 10 Part I of the First Schedule by the Charter
Guarantor and the Guarantor whereby the Charter Guarantor guarantees the
performance of the Charterer's obligations under the charter;
"CHARTER GUARANTOR" means OMI Corp.;
"DRAWDOWN DATE" means the date on which the Advance is made to the Borrower
hereunder;
"EARNINGS ACCOUNT" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"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 Borrower in this
Agreement;
"FACILITY AMOUNT" means an amount of up to US$27,000,000 to be advanced by
the Banks to the Borrower;
"FACILITY COMMITMENT" means in relation to a Bank, the amount set opposite
its name in the Fourth Schedule;
"FACILITY OFFICE" means in relation to a Bank, the Agent or the Security
Trustee the office identified with 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;
"FAIR MARKET VALUE" means, in relation to the Vessel at any time, the sale
value of the Vessel in dollars determined on the basis of a sale (for cash
and prompt delivery) by a willing
<PAGE>
seller to a willing buyer, free of charter and encumbrances and at arm's
length on normal commercial terms;
"FINAL REPAYMENT DATE" means the date which falls 60 months after the
Drawdown Date;
"FINANCING DOCUMENTS" means this Agreement, any Interest Rate Swap
Agreement, the Trust Deed, the Mortgage, the Assignment of Earnings and
Insurances, the Priority Agreement and the Assignment of Accounts, the
Guarantee and any other document agreed between the Agent and the Borrower
to be a Financing Document;
"GENERAL PARTNERS" means the Managing General Partner and the
Administrative General Partner;
"GUARANTEE" means the guarantee to be entered into by the Guarantor in
favour of the Security Trustee pursuant to paragraph 8, Part 2 of the First
Schedule;
"GUARANTOR" means Alta Ltd., a wholly-owned subsidiary of the Borrower in
whom the ownership of the Vessel is vested;
"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 RATE SWAP AGREEMENT" means any interest rate swap agreement to be
entered into by the Borrower, any Banks and the Agent pursuant to which the
Borrower will hedge all or part of its interest costs under this Agreement;
"INTEREST PERIOD" means any of those periods mentioned in Clause 7.2
(DURATION OF INTEREST PERIODS);
"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;
"MANAGEMENT AGREEMENT" means the agreement (as from time to time amended or
novated) to be entered or entered into between the Guarantor and Universe
Tankships (Delaware) LLC relating to the management of the Vessel pursuant
to paragraph 12, Part 1, of the First Schedule;
<PAGE>
"MANAGING GENERAL PARTNER" means General Maritime I Corporation, a
corporation duly incorporated under the laws of the State of Delaware,
U.S.A;
"MARGIN" means one and one-eighth per cent. (1-1/8%) per annum;
"MEMORANDUM OF AGREEMENT" means the agreement (as from time to time amended
or novated) for the purchase and sale of the Vessel dated 31 March 1997 and
made between the Guarantor and the Seller;
"MORTGAGE" means a first preferred Liberian ship mortgage over the Vessel
to be granted by the Guarantor to the Security Trustee pursuant to
paragraph 1, Part 2 of the First Schedule;
"NOTICE OF DRAWDOWN" means a notice in the form or substantially the form
of that set out in the Second Schedule;
"OBLIGORS" means each of the Borrower and the Guarantor;
"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
Borrower and the Guarantor 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;
"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 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;
"RETENTION ACCOUNT" has the meaning ascribed to it in the Assignment of
Earnings and Insurances;
"SELLER" means Mendala II Transport, Inc.;
"TERMINATION DATE" means the earlier of 31 May 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
<PAGE>
and the Borrower pursuant to Clause 26.3 (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 26.3
(ASSIGNMENTS AND TRANSFERS BY BANKS); and
(ii) such Transferee undertakes to perform the obligations it will
assume as a result of delivery of such certificate to the
Borrower 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 Borrower, the Guarantor and the Banks
pursuant to paragraph 4, Part 2 of the First Schedule;
"VESSEL" means the vessel known as m/t "ALTA" more particularly described
in the Mortgage.
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
London and New York City;
a "CHARTER" shall be construed as a reference to any agreement (including
the Charter) pursuant to which the 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
<PAGE>
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;
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;
<PAGE>
"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" includes any actual, constructive, arranged, agreed or
compromised total loss, any requisitioning for title and the capture,
seizure, arrest, detention, or confiscation of the Vessel by any
government, or by persons purporting to act on behalf of any government,
unless the 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.
1.6 For the purposes of the Financing Documents, a total loss of the 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
<PAGE>
underwriters.
2. THE FACILITY
The Banks hereby grant to the Borrower, upon the terms and subject to the
conditions hereof, a loan facility in the maximum amount of $27,000,000.
3. PURPOSE
The purpose of the Facility is to provide the Borrower with funds so that
the Borrower can assist the Guarantor in financing the purchase of the
Vessel and, accordingly, the Borrower shall apply all of the amounts raised
by it hereunder in or towards such purpose (but so that the Banks shall not
be obliged to concern itself with the application of amounts borrowed by
the Borrower hereunder).
4. CONDITIONS PRECEDENT
The Borrower shall not be entitled to give any Notice of Drawdown hereunder
unless the Agent shall have confirmed to the Borrower by telex or letter
that it has received five days prior to the proposed Drawdown Date 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 BANKS' RIGHTS AND OBLIGATIONS
5.1 OBLIGATIONS OF BANKS SEVERAL
The obligations of each Bank hereunder are several.
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 Borrower 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 Borrower 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 Banks to the Borrower by way of a single
Advance.
<PAGE>
6.2 DRAWDOWN CONDITIONS
Save as otherwise provided herein, the Advance will be made by the Banks to
the Borrower on the request of the Borrower if:
(i) not more than ten nor less than two business days before the
proposed date for the making of the Advance the Agent has
received from the Borrower a Notice of Drawdown therefor, receipt
of which shall oblige the Borrower to borrow the amount therein
requested on the date therein stated upon the terms and subject
to the conditions contained herein;
(ii) the amount stated in the Notice of Drawdown shall not be more
than the lesser of the amount of the Facility Amount and 68% of
the purchase price of Vessel as set out in the Memorandum of
Agreement;
(iii) the Drawdown Date is a business day which is or precedes the
Termination Date;
(iv) on or before the Drawdown Date the Agent has received from the
Borrower 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 the 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 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 Banks agree (notwithstanding any matter mentioned at (a) or (b)
above) that the Advance should be made.
7. INTEREST PERIODS
7.1 INTEREST PERIODS
The period for which the 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.
<PAGE>
7.2 DURATION OF INTEREST PERIODS
The duration of each Interest Period relating to the 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 Borrower and
the Agent, in each case as the Borrower may select by not less than three
business days' prior notice to the Agent Provided that:
(i) if the Borrower selects a duration of twelve months in relation
to an Interest Period, then:
(a) the Borrower may, at the same time, notify the Agent of an
alternative selection of three or six months to apply if the
Borrower's 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 Borrower's
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 Borrower fails to give such notice of its selection in
relation to an Interest Period, or if its selection becomes
ineffective under (i)(b) above and the Borrower has 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 Borrower 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.
7.3 If pursuant to Clause 7.2 the Borrower selects 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 a part in an amount equal to the amount
scheduled to be repaid on that 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 twelve months, on the last day of the sixth of
those months) the Borrower shall pay accrued
<PAGE>
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 rate 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 Borrower shall repay the Loan in instalments by repaying on each
Repayment Date an amount as set out below:
<TABLE>
<CAPTION>
REPAYMENT DATE NO. INSTALMENT PAYABLE IN $000
<S> <C>
1 700
2 700
3 700
4 700
5 800
6 800
7 800
8 800
9 900
10 900
11 900
12 900
13 1000
14 1000
15 1000
16 1000
17 1100
18 1100
19 1100
20 10,100
</TABLE>
<PAGE>
9.2 PREPAYMENT
The Borrower may, if it has given to the Agent not less than fifteen (15)
business days' prior notice to that effect, prepay the whole or any part of
the Advance (but if in part being an amount or integral multiple of
$100,000) on the last day of an Interest Period relating thereto. Any
prepayment made by the Borrower pursuant to this Clause shall satisfy the
Borrower's remaining obligations under Clause 9.1 (REPAYMENT) in inverse
order of maturity.
9.3 NOTICE OF PREPAYMENT
Any notice of prepayment given by the Borrower 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
Borrower to make such prepayment on such date.
9.4 MANDATORY PREPAYMENT
Subject to any amounts agreed between the Banks and either Obligor to be
retained by such Obligor to meet any docking expenses, if either Obligor
holds cash in its accounts (excluding any amounts credited to the Retention
Account) on a Repayment Date which (after making the repayment and payment
of interest due on such date) is in excess of $500,000 plus any amount that
the Agent has agreed may be paid to any parties by way of distributions,
any such excess amount shall be applied by such Obligor in making a
prepayment of the Advance on the succeeding Repayment Date (in addition to
any other amounts then falling due) together with any amounts which may
fall due under Clause 17.4 (BROKEN PERIODS). Any such amount so prepaid
will be applied against the Borrower's obligations under Clause 9.1
(REPAYMENT) in inverse order of maturity.
9.5 PREPAYMENT FEE
If the Borrower makes any prepayment pursuant to Clause 9.2 (PREPAYMENT)
otherwise than out of its own resources generated by the operations of the
Vessel, the Borrower shall be obliged, together with such prepayment, to
pay a prepayment fee equal to one quarter of one per cent. (1/4%) 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.
9.6 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 the Borrower to any person under any of the
Financing
<PAGE>
Documents shall be made free and clear of and without deduction for or on
account of tax unless the Borrower is required to make such a payment
subject to the deduction or withholding of tax, in which case the sum
payable by the Borrower in respect of which such deduction or withholding
is required to be made shall be increased to the extent necessary to ensure
that, after the making of 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 Financing 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 the such person, the Borrower shall,
upon demand of the Agent, promptly indemnify the 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 Borrower accordingly.
10.4 NOTIFICATION OF REQUIREMENT TO DEDUCT TAX
If, at any time, the Borrower is required by law to make any deduction or
withholding from any sum payable by it under any of the Financing Documents
(or if thereafter there is any change in the rates at which or the manner
in which such deductions or withholdings are calculated), the Borrower
shall promptly notify the Agent, whereupon the Agent shall notify the Banks
and the Security Trustee accordingly.
<PAGE>
10.5 EVIDENCE OF PAYMENT OF TAX
If the Borrower makes any payment under any of the Financing 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 its 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 advance 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 the Advance made or to be made hereunder and/or by
reference to any sum received or receivable by such Bank
hereunder,
then the Borrower 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
<PAGE>
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 Borrower accordingly.
11.3 ILLEGALITY
If at any time it is unlawful for a Bank to make its portion of the 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 Borrower a certificate to that effect
whereupon:
(i) if no Advance has been made hereunder, the Bank shall not
thereafter be obliged to make the Advance hereunder and its
Facility Commitment shall be reduced to zero; and
(ii) if the Advance has already been made hereunder, then, if the
Agent on behalf of any relevant Bank so requires, the Borrower
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 COST),
then, without in any way limiting, reducing or otherwise
qualifying the obligations of the Borrower under any of the
Clauses referred to above, such a Bank shall, in consultation
with the Agent and the Borrower, take such reasonable steps as
may be reasonably open to it to mitigate the effects of such
circumstances, including by transferring its Facility Office
to another jurisdiction or by assigning its rights hereunder
to another financial institution approved by the Borrower
Provided that 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
<PAGE>
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 Borrower,
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. This sub-clause (b) shall not in any way limit,
reduce or otherwise qualify the obligations of the Borrower
set out in Clause 4.3 of the Trust Deed.
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, the Borrower represents that:
(i) STATUS It is a limited partnership and the Guarantor is a
company both duly organised under the laws of the Cayman
Islands and each of the General Partners is a corporation or
company duly organised under the laws of the State of
Delaware, USA or as the case may be, the Cayman Islands with
power to enter into the Financing Documents on behalf of the
Borrower and to exercise its rights and perform its
obligations under such Financing Documents on behalf of the
Borrower and the Borrower is duly qualified as a foreign
maritime entity in Liberia with the power to register the
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 each Obligor of the Financing
Documents to which it is a party and its performance of its
obligations under such Financing 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, no Obligor will
be required to make any deduction or withholding from any payment
it may make under any of the Financing Documents;
(iv) CLAIMS PARI PASSU Without prejudice to the security constituted
by or pursuant to any Financing Documents to which it is a party
under the laws of the Cayman Islands and Liberia in force at the
date hereof, the claims of the Agent, the Bank and the Security
Trustee against each Obligor under any Financing 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;
<PAGE>
(v) NO IMMUNITY In any proceedings taken in the Cayman Islands in
relation to any of the Financing Documents to which it is a
party, neither Obligor will be entitled to claim for itself or
any of its assets 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 Financing Documents, the
choice of English law as the governing law of those of such
Financing 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 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 each Obligor lawfully to enter into, exercise its
rights under and perform and comply with the obligations
expressed to be assumed by it in the Financing Documents to which
it is a party, (b) to ensure that the obligations expressed to be
assumed by each Obligor in such Financing Documents are legal,
valid and binding and (c) to make such Financing 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
Financing 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 Financing Documents; and
(ix) BINDING OBLIGATION The obligations expressed to be assumed by
each Obligor in the Financing Documents to which it is a party
are legal and valid obligations binding on it in accordance with
the terms of such Financing Documents.
12.2 The Borrower further represents in relation to each Obligor that:
(i) NO WINDING-UP Neither Obligor has 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 or either of the General Partners 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 Neither Obligor nor either of the General
Partners is in breach of or in default under any agreement to
which it is a party or which is binding on it or any of its
assets to an extent or in a manner which might have a material
adverse effect on its business or financial condition;
<PAGE>
(iii) NO MATERIAL PROCEEDINGS No action or administrative proceeding
of or before any court or agency which might have a material
adverse effect on either Obligor's business or financial
condition has been started or threatened;
(iv) NO OTHER BUSINESS Neither Obligor has incurred any liabilities
or entered into any other commitments nor undertaken any
business other than in connection with the purchase or
operation of the Vessel;
(v) NO UNDISCLOSED LIABILITIES As at the date hereof neither Obligor
has 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 Charter, the Charter Guarantee, the
Memorandum of Agreement and the Management Agreement are in full
force and effect and the Borrower 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 The execution of the Financing
Documents to which each Obligor is a party 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 such Financing Documents;
(viii) EXECUTION OF FINANCING DOCUMENTS The execution of the Financing
Documents to which each Obligor is a party and its exercise of
its rights and performance of its obligations under such
Financing 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 the present or future revenues or
assets of each Obligor;
(x) OWNERSHIP OF THE BORROWER The General Partners are the only
general partners of the Borrower;
(xi) OWNERSHIP OF THE GUARANTOR The Guarantor is a wholly-owned
subsidiary of the Borrower; and
(xii) MANAGEMENT OF THE VESSEL The Vessel will be managed by Universe
Tankships (Delaware) LLC in accordance with the provisions of the
Management Agreement.
<PAGE>
13. INFORMATION COVENANTS
13.1 ANNUAL STATEMENTS
The 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 their
respective financial years, furnish to the Agent, the Obligors' and the
Charter Guarantor's balance sheets as at the end of such financial year and
the Obligors' and the Charter Guarantor's 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
The 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 in each of
their respective financial years, deliver to the Agent, the Obligors' and
the Charter Guarantor's balance sheets as at the end of such accounting
period and the Obligors' and the Charter Guarantor's profit-and-loss
accounts in respect of that accounting period, together with the Obligors'
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
The 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 the 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
The Borrower shall procure that the Guarantor promptly inform the Agent of
any material interruption in the operation of the Vessel (which shall
include situations where the 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
The 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 the
Obligors' and the Charter Guarantor's business, assets and financial
condition (including financial accounts and cash flow reports) as the Agent
may reasonably request.
<PAGE>
14. FINANCIAL CONDITION
14.1 FAIR MARKET VALUE OF VESSEL
The Borrower shall ensure that at all times during the term of the Loan,
the Fair Market Value of the Vessel 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 equal or exceed 140% of
the Loan. If at any time such ratio is not met, the Borrower will forthwith
on the demand of the Agent prepay such portion of the Loan as will ensure
that such ratio is 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
Borrower shall promptly pay or reimburse to the Agent the cost of obtaining
such valuations.
14.2 MINIMUM WORKING CAPITAL
The Borrower shall maintain from time to time Working Capital (which shall
mean Current Assets less Current Liabilities) which, when aggregated with
the Working Capital of the Guarantor is at least $750,000.
14.3 NOTIFICATION OF FINANCIAL CONDITION The Borrower shall deliver to the Agent
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 all assets of the Borrower which, in accordance with
internationally accepted accounting principles, would be classed as current
assets; and
"CURRENT LIABILITIES" means all obligations of the Borrower 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
The 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 Liberia and
all other applicable jurisdictions to enable it lawfully to enter
into and perform its obligations under the Financing Documents to
which it is a party or to ensure the legality, validity,
enforceability or admissibility in evidence the Cayman Islands
and Liberia and all other applicable jurisdictions of the
Financing Documents;
<PAGE>
(ii) shall procure that no change of the classification or flag of the
Vessel, management of the Vessel or the Charter shall occur
without the prior written consent of the Agent;
(iii) shall, in the event of total loss of the Vessel, procure that
the Loan is repaid in full within 90 days of the Agent's written
notice (whether as a result of the application of insurance
proceeds by the Guarantor or otherwise);
(iv) shall not, without the prior written consent of the Agent, (such
consent not to be unreasonably withheld) permit any distributions
of the Borrower's profits or assets or pay any dividends or other
distributions to any of its partners, save for distributions to
its partners for the payment of United States of America income
taxes, if any, resulting from their investment in the Borrower
but not in an amount greater than the taxes that would have been
payable if the Borrower had been a United States of America tax
resident corporation and provided further that any such
distribution in respect of such tax liability may only be made
with the prior written consent of the Agent;
(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;
(vi) shall not, without prior written consent of the Agent, make any
investments with the assets of the Borrower (otherwise than by
placing its cash into bank accounts with the Agent) except for
any investments required to maintain the classification status of
the Vessel;
(vii) shall not, without the prior written consent of the Instructing
Group change its partnership agreement or permit any change to
the shareholders of the General Partners or its partners;
(viii) shall and shall ensure that the Guarantor maintains all its
bank accounts with the Agent's branch in New York and shall
ensure that the Guarantor 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 Financing Documents and
any second priority security over the Vessel and its earnings,
insurances and bank accounts in favour of the Security Trustee on
terms acceptable to the Agent to secure the Borrower's
obligations under the Junior Facility Agreement;
(x) shall manage its business and procure that the 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
<PAGE>
or technical nature.
(xi) shall not engage in any other business other than the ownership
of the Guarantor;
(xii) shall procure that the Vessel is at all times fully approved by
the major oil companies specified in the Management Agreement;
and
(xiii) shall upon notice and within the time frame set by the Agent
enter into one or more Interest Rate Swap Agreement with any
Banks and shall enter into such amendment or additions to the
Financing Documents as the Agent may reasonably require to ensure
that the Borrower's obligations under any such Interest Rate Swap
Agreement are secured on the same security as is provided by the
Financing Documents and with the same priority as is accorded to
the Banks hereunder.
16. EVENTS OF DEFAULT
16.1 If:
(i) FAILURE TO PAY The Obligors or as the case may be, the Charterer
or the Charter Guarantor fails to pay any sum due from it under
this Agreement or the Guarantee or as the case may be, under the
Charter or Charter Guarantee at any time, in the currency and in
the manner specified therein Provided that it shall not be an
Event of Default if any sums due under the Charter or the Charter
Guarantee is paid by the Charterer or as the case may be, the
Charter Guarantor within 5 business days of the due date for
payment as specified therein; or
(ii) MISREPRESENTATION Any representation or statement made by either
Obligor in any Financing Document to which it is a party 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 The Borrower fails duly to perform the obligations
expressed to be assumed by it in Clause 14 (FINANCIAL CONDITION)
or 15 (GENERAL COVENANTS) or the Guarantor fails duly to perform
the obligations expressed to be assumed by it Clause 5 of the
Guarantee; or
(iv) INSURANCE The Guarantor fails to insure the Vessel in accordance
with the requirements of the Assignment of Earnings and
Insurances and/or the Mortgage; or
<PAGE>
(v) OTHER OBLIGATION Either Obligor fails duly to perform or comply
with any other obligation expressed to be assumed by it in any
Financing Document to which it is a party and such failure is not
remedied within thirty days after the Agent has given notice to
either Obligor requiring the same to be remedied; or
(vi) CROSS DEFAULT If (a) any indebtedness of either of the Obligors
or any General Partner or the Charterer or the Charter Guarantor
is not paid when due (or within any period of grace applicable
thereto), (b) any indebtedness of either of the Obligors or any
General Partner or the Charterer or the Charter Guarantor is
declared to be or otherwise becomes due and payable prior to its
specified maturity or (c) any creditor of either of the Obligors
or any General Partner or the Charterer or the Charter Guarantor
become entitled to declare any indebtedness of either of the
Obligors or any General Partner or the Charterer or the Charter
Guarantor due and payable prior to its specified maturity
Provided that it shall not be an Event of Default if, with
respect to any General Partners, 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 Obligor or any General
Partner or the Charterer or the Charter Guarantor 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
Obligor or any General Partner or the Charterer or the Charter
Guarantor 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 Obligor or any General Partner or the
Charterer or the Charter Guarantor repudiates any Financing
Document or, as the case may be, the Charter or the Charter
Guarantee or does or causes to be done any act or thing
evidencing an intention to repudiate any such Financing Document
of Charter or Charter Guarantee; or
<PAGE>
(x) LEGALITY OF FINANCING DOCUMENTS At any time any act,
condition or thing required to be done, fulfilled or performed
in order (a) to enable either Obligor lawfully to enter into,
exercise its rights under and perform its obligations
expressed to be assumed by it in the Financing Documents to
which it is a party, (b) to ensure that the obligations
expressed to be assumed by either Obligor in such Financing
Documents are legal, valid and binding or (c) to make any such
Financing Documents admissible in evidence in the Cayman
Islands or Liberia is not done, fulfilled or performed; or
(xi) COMPLIANCE WITH OBLIGATIONS At any time it is or becomes
unlawful for either Obligor to perform or comply with any or
all of its obligations under any Financing Document to which
it is a party or any of the obligations of either Obligor
under such Financing Document 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 Obligor is wholly or
partially displaced or the authority of either Obligor 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 Obligor or the Charter or the Charterer Guarantor to
discharge its obligations under the Financing Documents to which
it is a party or as the case may be, the Charter or the Charter
Guarantee in the manner provided therein; or
(xiv) VARIATION OR TERMINATION OF AGREEMENTS Either of the Memorandum
of Agreement or the Charter Guarantee 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 the
Management Agreement or the 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 of any
of the partners in the Borrower or to either General Partner or
any of their respective shareholders or to the shareholding of
the Guarantor without the prior written consent of the
Instructing Group; or
<PAGE>
(xviii) ANALOGOUS EVENT If any event occurs to either Obligor, any
General Partner the Charterer or the Charter Guarantor 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 provided that any such event shall not be an Event of
Default if it occurs to the Charterer or the Charterer Guarantor
after the termination of the Charter or the Charter Guarantee in
accordance with the terms specified therein,
then, and in any such case and at any time thereafter, the Agent shall
if so instructed by the Instructing Group, by written notice to the
Borrower:
(a) declare the Loan to be immediately due and payable (whereupon the
same shall become so payable together with accrued interest
thereon and any other sums then owed by the Borrower hereunder)
or declare the Loan to be due and payable on demand of the Agent;
and/or
(b) declare that the 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 Borrower:
(i) call for repayment of the Loan on such date as it may
specify in such notice (whereupon the same shall become due
and payable on such date together with accrued interest
thereon and any other sums then owed by the Borrower
hereunder) or withdraw its declaration with effect from such
date as it may specify in such notice; and/or
(ii) select as the duration of any 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 Borrower 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 Borrower 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
Borrower to pay such sum (the balance thereof for the time being unpaid
being herein referred to as an "UNPAID SUM") is discharged shall be divided
into successive periods, each of which (other than the first) shall start
on the last day of the preceding such period and the duration of each of
which shall be selected by the Agent.
<PAGE>
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 the Advance which became due
and payable on a day other than the last day of an Interest
Period relating thereto, the first such period applicable thereto
shall be of a duration equal to the unexpired portion of that
Interest Period and the rate of interest applicable thereto
during such period shall be that which exceeds by 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 Borrower at the end of the period by reference to which it is
calculated or on such other dates as the Agent may specify by written
notice to the Borrower.
17.4 BROKEN PERIODS
If any Bank receives or recovers all or any part of such Bank's share of
the Advance otherwise than on the last day of an Interest Period relating
to the Advance, the Borrower 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 Borrower undertakes:
(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 the
<PAGE>
Borrower in the performance of any of the obligations expressed
to be assumed by it in any of the Financing 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 the Advance requested by the 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 COST) be treated as an advance and accordingly in this Clause 17
and Clause 11.1 (INCREASED COST) 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).
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 Borrower 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 Borrower under any Financing Document to which the
Borrower is a 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 Financing Document or
order or judgment into another currency (the "SECOND CURRENCY") for the
purpose of (i) making or filing a claim or proof against the 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 Financing
Document, the Borrower 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
Borrower or a Bank hereunder, the Borrower 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.
<PAGE>
19.2 NO SET-OFF
All payments made by the Borrower 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
The Borrower authorises each Bank at any time following the occurrence of
an Event of Default to apply any credit balance to which the Borrower is
entitled on any account of the Borrower with such Bank in satisfaction of
any sum due and payable from the Borrower 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 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 Borrower 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 Borrower 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 Borrower becomes repayable and is
repaid by such Recovering Bank, then:
<PAGE>
(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 Borrower 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
The Borrower shall pay to the Agent for its account as a Bank hereunder an
arrangement fee of the amount specified in the letter exchanged between the
Agent and Maritime Equity Management Limited dated 1st April 1997 such fee
to be payable at the Drawdown Date.
22.2 COMMITMENT FEE
The Borrower shall pay to the Agent for its account as a Bank hereunder a
commitment commission on the Facility Amount from day to day during the
period beginning on 1 May 1997 and ending on the Drawdown Date, such
commitment commission to be calculated at the rate of one-half of one per
cent. per annum and payable quarterly in arrears up to the Drawdown Date
and on the Drawdown Date.
22.3 AGENCY FEE
The Borrower shall pay to the Agent a non-refundable agency fee of the
amount specified in the letter exchanged between the Agent and Maritime
Equity Management Limited dated 1st April 1997, such fee to be payable on
the Drawdown Date and on each anniversary thereof.
23. COSTS AND EXPENSES
23.1 TRANSACTION EXPENSES
The Borrower 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 Financing
Documents and the completion of the transactions herein contemplated.
23.2 PRESERVATION AND ENFORCEMENT OF RIGHTS
The Borrower 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 Financing Documents.
<PAGE>
23.3 STAMP TAXES
The Borrower shall pay all stamp, registration and other taxes to which any
Financing Document or any judgment given in connection with any Financing
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 the 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 Borrower shall
forthwith reimburse each Bank for any payment made by it pursuant to this
Clause 23.4.
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 Financing 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 the Borrower in connection with
this Agreement and the other Financing Documents is true;
(b) no event which is or may become an Event of Default has
occurred; and
(c) the Borrower is not in breach of or default under its
obligations with this Agreement and the other Financing
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
<PAGE>
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 Borrower upon a certificate
signed by or on behalf of the Borrower;
(v) rely upon any communication or document believed by it to be
genuine;
(vi) refrain from exercising any right, power or discretion vested in
it as agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, as
to the manner in which it should be exercised; and
(vii) refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising
out of or in connection with 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 the Borrower under this Agreement
and the other Financing Documents;
(ii) promptly notify each Bank of the occurrence of any Event of
Default or any default by the Borrower in the due performance of
or compliance with its obligations under this Agreement and the
other Financing 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:
<PAGE>
(i) be bound to enquire as to:
(a) whether or not any representation made by the Borrower in
connection with the Financing Documents is true;
(b) the occurrence or otherwise of any event which is or may
become an Event of Default;
(c) the performance by the Borrower of its obligations under any
of the Financing Documents; or
(d) any breach of or default by the Borrower of or under its
obligations under any of the Financing 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 the Borrower if such disclosure would or might in its
opinion constitute a breach of any law or 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 Borrower in connection herewith
or with any other Financing Document or for the legality, validity,
effectiveness, adequacy or enforceability of this Agreement or any other
Financing 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 Financing 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).
<PAGE>
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
Borrower.
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
Borrower's 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.
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 Borrower 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 Borrower in
connection with the Financing 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 Borrower.
<PAGE>
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
Borrower to the Agent in its capacity as agent hereunder for the Banks and
which is identified by such member of the Group at the time it is so
supplied as being confidential information Provided that the consent of the
Borrower 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 Borrower.
25. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its successors and permitted assigns.
26. ASSIGNMENTS AND TRANSFERS
26.1 NO ASSIGNMENT AND TRANSFER BY THE BORROWER
The Borrower shall not 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.
<PAGE>
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 Borrower 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 Borrower
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 Borrower 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 Borrower and such Transferee have assumed
and/or acquired the same in place of the Borrower and such Bank;
26.5 TRANSFER FEES
On the date upon which a transfer takes effect pursuant to this Clause 26,
the Transferee in respect of such transfer shall pay to the Agent for its
own account a transfer fee of $500.
26.6 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 Borrower 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 Borrower (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 Borrower as such Bank and the Borrower 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.
<PAGE>
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 Financing Documents, the entries made in such accounts
shall be conclusive evidence of the existence and amounts of the
obligations of the Borrower 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 the Advance made hereunder by the
Initial Bank, (ii) the amount of all principal, interest and other sums due
or to become due from the Borrower to each of the Banks under the Financing
Documents and (iii) the amount of any sum received or recovered by the
Agent under the Financing 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 Financing 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 the existence and
extent of the obligations of the Borrower 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
COST) 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.
<PAGE>
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 Borrower 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 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
Borrower 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.
<PAGE>
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 Bank 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
The 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.
32.3 SERVICE OF PROCESS
The 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 its registered office 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 the 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 the Borrower, the Managing General Partner, the Guarantor,
the Charterer and the Charter Guarantor (herein together referred to as the
"RELEVANT PARTIES"):
(i) a copy, certified a true copy by a duly authorised officer of the
Managing General Partner of the Borrower of the Borrower's
Certificate of Registration as Limited Partnership and its Limited
Partnership Agreement;
(ii) a copy, certified a true copy by a duly authorised officer of the
Relevant Party, of the constitutive documents of such Relevant
Party;
(iii) a copy, certified a true copy by a duly authorised officer of the
Managing General Partner of the Borrower, of a Board Resolution of
the Managing General Partner on behalf of the Borrower approving
the execution, delivery and performance of each of the Financing
Documents to which it is a party and the terms and conditions
thereof and authorising a named person or persons to sign each of
such Financing Documents and any documents to be delivered by the
Borrower pursuant hereto;
(iv) a copy, certified a true copy by a duly authorised officer of the
Charterer, of a Board Resolution of the Charterer approving the
execution, delivery and performance of the Charter and the terms
and conditions thereof and authorising a named person or persons
to sign the Charter;
(v) a certificate of a duly authorised officer of each Relevant Party
setting out the names and signatures of the persons authorised to
sign, on behalf of such Relevant Party, each of the Financing
Documents to which it is a party and the Charter or the Charter
Guarantee (to the extent it is a party thereto) and any documents
to be delivered pursuant thereto; and
(vi) a copy, certified a true copy by a duly authorised officer of the
Managing General Partner of the Borrower of each of the powers of
attorney, if any, issued pursuant to the resolutions or other
authority referred to in (iii) above.
(vii) a copy, certified a true copy by a duly authorised officer of the
Charter Guarantor, of a Board Resolution of the Charter Guarantor
approving the execution, delivery and performance of the Charter
Guarantee and the terms and conditions thereof and authorising a
named person or persons to sign the Charter Guarantee;
(viii) a copy certified a true copy by a duly authorised officer of the
Managing General Partner of the Borrower of the proforma opening
balance sheet of the Borrower evidencing its capital structure
including the amount of its
<PAGE>
Working Capital;
(ix) a certificate of a duly authorised officer of the Managing General
Partner of the Borrower setting out the partners (both general and
limited) of the Borrower;
(x) a certificate of a duly authorised officer of the Managing General
Partner setting out the shareholders of the Managing General
Partner; and
(xi) a copy, certified a true copy by a duly authorised officer of the
Guarantor, of a Board Resolution of the Guarantor approving the
execution, delivery and performance of each of the Financing
Documents to which it is a party and the terms and conditions
thereof and authorising a named person or persons to sign each
such Financing Document.
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 Financing
Documents and the Charter legal, valid, binding and enforceable, to make them
admissible in evidence in the Cayman Islands and Liberia and to enable the
Borrower lawfully to perform their respective obligations under the Financing
Documents.
3. An opinion of the Banks' counsel in relation to Liberian law in a form
satisfactory to the Banks.
4. An opinion of the Banks' Cayman Islands Counsel in a form satisfactory to
the Banks.
5. An opinion of the Charter Guarantor's internal counsel in a form
satisfactory to the Banks relating to the Charterer and the Charter Guarantor.
6. An opinion of Clifford Chance in a form satisfactory to the Banks.
7. Evidence that Clifford Chance Secretaries Limited has agreed to act as
the agent of the Borrower and the Guarantor for the service of process in
England.
8. A copy, certified to be a true copy by a duly authorised officer of the
Managing General Partner of the Borrower of the Memorandum of Agreement
showing the purchase price of the Vessel to be $39,900,000.
9. A copy, certified to be a true copy by a duly authorised officer of the
Managing General Partner of the Borrower of the Charter.
10. A copy of the Charter Guarantee on terms and conditions acceptable to the
Banks.
11. Valid up-to-date class certificates from a classification society
acceptable to the Agent and showing the Vessel to be in a class acceptable to
the Agent, without extension or recommendations.
12. Details of the manager of the Vessel and a certified true copy of the
Management Agreement in a form acceptable to the Banks.
<PAGE>
13. A Priority Agreement between the Borrower, the Banks and the Agent under
this Agreement and the Agent and the lenders under the Junior Facility
Agreement.
14. A copy of the Bill of Sale relating to the Vessel and any other documents
required to be produced by the Borrower pursuant to the Memorandum of Agreement.
15. Evidence of the discharge of any existing mortgages.
<PAGE>
PART 2
Each of the following documents duly executed by the Borrower:
1. A first preferred Liberian ship mortgage over the Vessel granted by the
Guarantor in favour of the Security Trustee in a form acceptable to the Banks.
2. An assignment of earnings and insurances agreement entered into by the
Guarantor in favour of the Security Trustee to secure the Guarantor's
obligations under the Guarantee in a form acceptable to the Banks.
3. An assignment of the Guarantor's bank accounts in a form acceptable to
the Banks.
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
Banks.
5. All notices to be given under the assignments referred to in 2 and 3
above.
6. The Protocol of Delivery and Acceptance of the Vessel duly signed by the
Borrower and the Seller.
7. A guarantee whereby the Guarantor guarantees the performance of the
Borrower's obligation hereunder in a form acceptable to the Banks.
8. Evidence that the Vessel has been accepted for service under the Charter
by the Charterer for at least 5 years on terms and conditions acceptable to the
Banks.
<PAGE>
THE SECOND SCHEDULE
NOTICE OF DRAWDOWN
From: General Maritime I, L.P.
To: Christiania Bank og Kreditkasse ASA as Agent
Dear Sirs,
1. We refer to the agreement (the "FACILITY AGREEMENT") dated May 1997 and
made between ourselves as borrower, yourselves as agent and security trustee and
the Banks 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 [date of proposed borrowing], 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 68 per cent. of the purchase price of the m/t "ALTA"
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 Alta Ltd.'s account
with the Agent's New York branch.
Yours faithfully
------------------------
for and on behalf of
GENERAL MARITIME I, L.P.
<PAGE>
THE THIRD SCHEDULE
FORM OF TRANSFER CERTIFICATE
To: Christiania Bank og Kreditkasse ASA (as Agent) and
General Maritime I, L.P.
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "FACILITY AGREEMENT") dated [ ] whereby a
US$27,000,000 loan facility was made available to [ ] (the
"BORROWER") by the Banks 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 the 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 document relating thereto and
assumes no responsibility for the financial condition of the Borrower or
<PAGE>
for the performance and observance by the 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 the 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
THE BANKS
<TABLE>
<CAPTION>
BANK COMMITMENT (% OF
FACILITY AMOUNT)
<S> <C>
Christiania Bank og Kreditkasse ASA 50
Union Bank of Norway 50
</TABLE>
<PAGE>
EXECUTION PAGES
THE BORROWER
GENERAL MARITIME I, L.P.
acting through its Managing General Partner
GENERAL MARITIME I CORPORATION
By: Peter C Georgiopoulos, President
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: Justin F McCarthy III, Attorney-in-Fact
Address: PO Box 1166
Sentrum
0107 Oslo
Norway
Attention: Shipping Department
Tel: 47 22 48 50 00
Fax: 47 22 48 66 68
<PAGE>
THE BANKS
CHRISTIANIA BANK OG KREDITKASSE ASA
By: Justin F McCarthy III, Attorney-in-Fact
Address: PO Box 1166
Sentrum
0107 Oslo
Norway
Attention: Shipping Department
Tel: 47 22 48 50 00
Fax: 47 22 48 66 68
UNION BANK OF NORWAY
By: Brad L Berman, Attorney-in-Fact
Address: Kirkegaten 18
PO Box 1172
Sentrum
0107 Oslo
Norway
Attention: Head of Shipping Department
Tel: 47 22 31 93 31
Fax: 47 22 31 98 30
