Form
20-F
|
X
|
Form
40- F
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Report
of Independent Registered Public Accounting Firm
|
3
|
||
Unaudited
Consolidated Statements of Income
|
|||
for the three and nine months ended September 30, 2006 and
2005
|
4
|
||
Unaudited
Consolidated Balance Sheets
|
|||
as at September 30, 2006 and December 31, 2005
|
5
|
||
Unaudited
Consolidated Statements of Cash Flows
|
|||
for the nine months ended September 30, 2006 and 2005
|
6
|
||
Notes
to the Unaudited Consolidated Financial Statements
|
7
|
||
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
26
|
||
Item
3. Quantitative and Qualitative Disclosures about Market Risk
|
45
|
||
PART
II: OTHER INFORMATION
|
47
|
||
SIGNATURES
|
48
|
Vancouver, Canada, | /s/ | ERNST & YOUNG LLP |
December 13, 2006 |
|
Chartered Accountants |
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
VOYAGE
REVENUES
|
477,733
|
425,594
|
1,426,316
|
1,423,145
|
|||||||||
OPERATING
EXPENSES
|
|||||||||||||
Voyage
expenses
|
133,430
|
107,835
|
378,458
|
304,660
|
|||||||||
Vessel
operating expenses
|
52,939
|
50,743
|
157,866
|
156,524
|
|||||||||
Time-charter
hire expense
|
100,848
|
120,556
|
299,975
|
353,592
|
|||||||||
Depreciation
and amortization
|
49,849
|
50,411
|
150,490
|
154,800
|
|||||||||
General
and administrative (
note
10
)
|
39,822
|
40,455
|
121,538
|
114,332
|
|||||||||
Writedown
/ (gain) on sale of vessels
and equipment (
note
12
)
|
(7,138
|
)
|
(6,576
|
)
|
(6,095
|
)
|
(124,323
|
)
|
|||||
Restructuring
charge (
note
13
)
|
2,948
|
-
|
7,414
|
-
|
|||||||||
Total
operating expenses
|
372,698
|
363,424
|
1,109,646
|
959,585
|
|||||||||
Income
from vessel operations
|
105,035
|
62,170
|
316,670
|
463,560
|
|||||||||
OTHER
ITEMS
|
|||||||||||||
Interest
expense
|
(40,572
|
)
|
(29,599
|
)
|
(114,059
|
)
|
(100,615
|
)
|
|||||
Interest
income
|
14,262
|
8,254
|
39,948
|
24,910
|
|||||||||
Equity
income from joint ventures
|
1,965
|
854
|
2,259
|
6,565
|
|||||||||
Foreign
exchange gain (loss)
(
note
7
)
|
277
|
3,063
|
(32,991
|
)
|
50,602
|
||||||||
Other
- net (
note
13
)
|
(1,120
|
)
|
(2,067
|
)
|
(9,883
|
)
|
(18,732
|
)
|
|||||
Total
other items
|
(25,188
|
)
|
(19,495
|
)
|
(114,726
|
)
|
(37,270
|
)
|
|||||
Net
income
(
note
14
)
|
79,847
|
42,675
|
201,944
|
426,290
|
|||||||||
Per
common share amounts
|
|||||||||||||
- Basic earnings (
note
16
)
|
1.09
|
0.55
|
2.76
|
5.34
|
|||||||||
- Diluted earnings (
note
16
)
|
1.07
|
0.52
|
2.68
|
4.99
|
|||||||||
- Cash dividends declared
|
0.2075
|
0.1375
|
0.6225
|
0.4125
|
|||||||||
Weighted
average number of common shares
(
note
16
)
|
|||||||||||||
- Basic
|
73,251,038
|
77,104,662
|
73,223,613
|
79,872,761
|
|||||||||
- Diluted
|
74,944,038
|
82,559,885
|
75,318,853
|
85,395,369
|
|
|||||||
|
As
at
September
30,
2006
$
|
As
at
December
31,
2005
$
|
|||||
ASSETS
|
|||||||
Current
Cash
and cash equivalents (
note
7
)
|
303,231
|
236,984
|
|||||
Restricted
cash (
note
9
)
|
161,056
|
152,286
|
|||||
Accounts
receivable
|
135,941
|
151,732
|
|||||
Net
investment in direct financing leases - current
|
21,184
|
20,240
|
|||||
Prepaid
expenses
|
86,735
|
60,134
|
|||||
Other
assets
|
10,579
|
9,041
|
|||||
Total
current assets
|
718,726
|
630,417
|
|||||
Restricted
cash (
note
9
)
|
618,449
|
158,798
|
|||||
Vessels
and equipment
(
note
7
)
|
|||||||
At
cost, less accumulated depreciation of $833,017
(December 31, 2005 - $766,696)
|
2,501,348
|
2,536,002
|
|||||
Vessels
under capital leases, at cost, less accumulated
depreciation of $49,845 (December 31, 2005 - $35,574) (
note
9
)
|
662,875
|
712,120
|
|||||
Advances
on newbuilding contracts (
note
11
)
|
365,257
|
473,552
|
|||||
Total
vessels and equipment
|
3,529,480
|
3,721,674
|
|||||
Net
investment in direct financing leases
|
92,501
|
100,996
|
|||||
Investment
in Petrojarl ASA (
note
3
)
|
355,936
|
-
|
|||||
Investment
in joint ventures (
note
11
)
|
151,844
|
145,448
|
|||||
Other
assets
|
223,303
|
113,590
|
|||||
Intangible
assets - net (
note
5
)
|
237,213
|
252,280
|
|||||
Goodwill
(
note
5
)
|
171,253
|
170,897
|
|||||
Total
assets
|
6,098,705
|
5,294,100
|
|||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
|
|||||||
Accounts
payable
|
44,356
|
40,908
|
|||||
Accrued
liabilities
|
141,028
|
125,878
|
|||||
Current
portion of long-term debt (
note
7
)
|
41,820
|
159,053
|
|||||
Current
obligation under capital leases (
note
9
)
|
160,284
|
139,001
|
|||||
Total
current liabilities
|
387,488
|
464,840
|
|||||
Long-term
debt (
note
7
)
|
2,399,416
|
1,686,190
|
|||||
Obligation
under capital leases (
note
9
)
|
386,895
|
415,234
|
|||||
Loan
from joint venture partner (
note
8
)
|
34,729
|
33,500
|
|||||
Other
long-term liabilities
|
243,016
|
174,991
|
|||||
Total
liabilities
|
3,451,544
|
2,774,755
|
|||||
Commitments
and contingencies (
notes
3, 9, 11 and 15
)
|
|||||||
Minority
interest
|
276,331
|
282,803
|
|||||
Stockholders’
equity
Capital
stock (
note
10
)
|
587,737
|
471,784
|
|||||
Additional
paid-in capital (
note
10
)
|
6,829
|
-
|
|||||
Retained
earnings
|
1,815,284
|
1,833,588
|
|||||
Accumulated
other comprehensive loss (
note
15
)
|
(39,020
|
)
|
(68,830
|
)
|
|||
Total
stockholders’ equity
|
2,370,830
|
2,236,542
|
|||||
Total
liabilities and stockholders’ equity
|
6,098,705
|
5,294,100
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
$
|
$
|
||||||
Cash
and cash equivalents provided by (used for)
|
|||||||
OPERATING
ACTIVITIES
|
|||||||
Net
income
|
201,944
|
426,290
|
|||||
Non-cash
items:
|
|||||||
Depreciation and amortization
|
150,490
|
154,800
|
|||||
Writedown / (gain) on sale of vessels and equipment
|
(6,095
|
)
|
(124,323
|
)
|
|||
Loss on repurchase of bonds
|
375
|
10,109
|
|||||
Equity income (net of dividends received: September 30, 2006 - $5,583;
September 30, 2005 - $6,477)
|
3,324
|
(88
|
)
|
||||
Income
tax expense (recovery)
|
5,839
|
(11,877
|
)
|
||||
Employee stock option compensation (
note
10
)
|
6,829
|
-
|
|||||
Loss from settlement of interest rate swaps
|
-
|
7,820
|
|||||
Writeoff of capitalized loan costs
|
-
|
7,462
|
|||||
Unrealized foreign exchange loss (gain) and other - net
|
48,691
|
(36,624
|
)
|
||||
Change
in non-cash working capital items related to operating
activities
|
13,531
|
19,025
|
|||||
Expenditures
for drydocking
|
(26,087
|
)
|
(13,420
|
)
|
|||
Net
operating cash flow
|
398,841
|
439,174
|
|||||
FINANCING
ACTIVITIES
|
|||||||
Proceeds
from long-term debt
|
986,929
|
1,706,310
|
|||||
Capitalized
loan costs
|
(9,241
|
)
|
(3,879
|
)
|
|||
Scheduled
repayments of long-term debt
|
(14,205
|
)
|
(57,902
|
)
|
|||
Prepayments
of long-term debt
|
(259,375
|
)
|
(1,981,349
|
)
|
|||
Repayments
of capital lease obligations
|
(7,486
|
)
|
(6,092
|
)
|
|||
Loan
from joint venture partner
|
5,795
|
-
|
|||||
(Increase)
decrease in restricted cash
|
(433,184
|
)
|
15,861
|
||||
Settlement
of interest rate swaps
|
-
|
(143,295
|
)
|
||||
Net
proceeds from sale of 22.3% of Teekay LNG Partners L.P. (
note
4
)
|
-
|
135,713
|
|||||
Distribution
by subsidiaries to minority owners
|
(19,610
|
)
|
(10,297
|
)
|
|||
Investment
in subsidiaries from minority owners
|
-
|
61,183
|
|||||
Issuance
of common stock upon exercise of stock options (
note
10
)
|
11,660
|
17,913
|
|||||
Repurchase
of common stock (
note
10
)
|
(212,330
|
)
|
(369,047
|
)
|
|||
Cash
dividends paid
|
(46,057
|
)
|
(33,450
|
)
|
|||
Net
financing cash flow
|
2,896
|
(668,331
|
)
|
||||
INVESTING
ACTIVITIES
|
|||||||
Expenditures
for vessels and equipment
|
(285,834
|
)
|
(357,062
|
)
|
|||
Proceeds
from sale of vessels and equipment
|
321,876
|
505,196
|
|||||
Investment
in Petrojarl ASA (
note
3
)
|
(347,173
|
)
|
-
|
||||
Investment
in joint venture
|
(8,060
|
)
|
(80,756
|
)
|
|||
Loan
to joint venture
|
(20,217
|
)
|
-
|
||||
Investment
in direct financing leases
|
(6,797
|
)
|
(17,032
|
)
|
|||
Repayment
of direct financing leases
|
13,897
|
9,007
|
|||||
Other
|
(3,182
|
)
|
(4,382
|
)
|
|||
Net
investing cash flow
|
(335,490
|
)
|
54,971
|
||||
Increase
(decrease) in cash and cash equivalents
|
66,247
|
(174,186
|
)
|
||||
Cash
and cash equivalents, beginning of the period
|
236,984
|
427,037
|
|||||
Cash
and cash equivalents, end of the period
|
303,231
|
252,851
|
Three
months ended September 30, 2006
|
Fixed-Rate
Tanker
Segment
$
|
Fixed-Rate
LNG
Segment
$
|
Spot
Tanker
Segment
$
|
Total
$
|
|||||||||
Voyage
revenues - external
|
191,916
|
25,218
|
260,599
|
477,733
|
|||||||||
Voyage
expenses
|
26,579
|
394
|
106,457
|
133,430
|
|||||||||
Vessel
operating expenses
|
33,900
|
4,156
|
14,883
|
52,939
|
|||||||||
Time-charter
hire expense
|
45,669
|
-
|
55,179
|
100,848
|
|||||||||
Depreciation
and amortization
|
28,867
|
7,959
|
13,023
|
49,849
|
|||||||||
General
and administrative
(1)
|
15,459
|
3,478
|
20,885
|
39,822
|
|
||||||||
Writedown
/ (gain) on sale of vessels and equipment
|
(6,509
|
)
|
-
|
(629
|
)
|
(7,138
|
)
|
||||||
Restructuring
charge
|
-
|
-
|
2,948
|
2,948
|
|||||||||
Income
from vessel operations
|
47,951
|
9,231
|
47,853
|
105,035
|
|||||||||
Voyage
revenues - intersegment
|
3,486
|
-
|
-
|
3,486
|
Three
months ended September 30, 2005
|
Fixed-Rate
Tanker Segment
$
|
Fixed-Rate
LNG
Segment
$
|
Spot
Tanker
Segment
$
|
Total
$
|
|||||||||
Voyage
revenues - external
|
178,669
|
24,503
|
222,422
|
425,594
|
|||||||||
Voyage
expenses
|
19,497
|
-
|
88,338
|
107,835
|
|||||||||
Vessel
operating expenses
|
32,102
|
3,401
|
15,240
|
50,743
|
|||||||||
Time-charter
hire expense
|
52,467
|
-
|
68,089
|
120,556
|
|||||||||
Depreciation
and amortization
|
29,512
|
7,522
|
13,377
|
50,411
|
|||||||||
General
and administrative
(1)
|
14,970
|
3,397
|
22,088
|
40,455
|
|||||||||
Writedown
/ (gain) on sale of vessels and equipment
|
2,111
|
-
|
(8,687
|
)
|
(6,576
|
)
|
|||||||
Income
from vessel operations
|
28,010
|
10,183
|
23,977
|
62,170
|
|||||||||
Voyage
revenues - intersegment
|
1,158
|
-
|
-
|
1,158
|
Nine
months ended September 30, 2006
|
Fixed-Rate
Tanker Segment
$
|
Fixed-Rate
LNG
Segment
$
|
Spot
Tanker
Segment
$
|
Total
$
|
|||||||||
Voyage
revenues - external
|
566,437
|
71,437
|
788,442
|
1,426,316
|
|||||||||
Voyage
expenses
|
69,333
|
794
|
308,331
|
378,458
|
|||||||||
Vessel
operating expenses
|
101,795
|
12,677
|
43,394
|
157,866
|
|||||||||
Time-charter
hire expense
|
140,052
|
-
|
159,923
|
299,975
|
|||||||||
Depreciation
and amortization
|
87,772
|
23,392
|
39,326
|
150,490
|
|||||||||
General
and administrative
(1)
|
45,876
|
10,233
|
65,429
|
121,538
|
|||||||||
Writedown
/ (gain) on sale of vessels and equipment
|
(4,664
|
)
|
-
|
(1,431
|
)
|
(6,095
|
)
|
||||||
Restructuring
charge
|
-
|
-
|
7,414
|
7,414
|
|||||||||
Income
from vessel operations
|
126,273
|
24,341
|
166,056
|
316,670
|
|||||||||
Voyage
revenues - intersegment
|
6,104
|
-
|
-
|
6,104
|
Nine
months ended September 30, 2005
|
Fixed-Rate
Tanker Segment
$
|
Fixed-Rate
LNG
Segment
$
|
Spot
Tanker
Segment
$
|
Total
$
|
|||||||||
Voyage
revenues - external
|
539,627
|
73,546
|
809,972
|
1,423,145
|
|||||||||
Voyage
expenses
|
50,722
|
50
|
253,888
|
304,660
|
|||||||||
Vessel
operating expenses
|
95,845
|
11,564
|
49,115
|
156,524
|
|||||||||
Time-charter
hire expense
|
147,007
|
-
|
206,585
|
353,592
|
|||||||||
Depreciation
and amortization
|
90,306
|
22,567
|
41,927
|
154,800
|
|||||||||
General
and administrative
(1)
|
41,010
|
9,599
|
63,723
|
114,332
|
|||||||||
Writedown
/ (gain) on sale of vessels and equipment
|
7,480
|
-
|
(131,803
|
)
|
(124,323
|
)
|
|||||||
Income
from vessel operations
|
107,257
|
29,766
|
326,537
|
463,560
|
|||||||||
Voyage
revenues - intersegment
|
3,449
|
-
|
-
|
3,449
|
(1) |
I
ncl
udes
direct general and administrative expenses and indirect general and
administrative expenses (allocated to each segment based on estimated
use
of corporate resources).
|
As
at
September
30,
2006
$
|
As
at
December
31,
2005
$
|
||||||
Fixed-rate
tanker segment
|
2,386,956
|
2,050,122
|
|||||
Fixed-rate
LNG segment
|
1,982,489
|
1,753,289
|
|||||
Spot
tanker segment
|
1,061,226
|
906,028
|
|||||
Cash
and restricted cash
|
310,790
|
244,510
|
|||||
Accounts
receivable and other assets
|
357,244
|
340,151
|
|||||
Consolidated total assets
|
6,098,705
|
5,294,100
|
Proceeds
received:
|
Offering
$
|
Follow-On
Offering
$
|
Total
$
|
|||||||
Sale
of 6,900,000 common units at $22.00 per unit
|
151,800
|
-
|
151,800
|
|||||||
Sale
of 4,600,000 common units at $27.40 per unit
|
-
|
126,040
|
126,040
|
|||||||
151,800
|
126,040
|
277,840
|
||||||||
Use
of proceeds from sale of common units:
|
||||||||||
Underwriting
and structuring fees.
|
10,473
|
5,042
|
15,515
|
|||||||
Professional
fees and other offering expenses to
third
parties
|
5,616
|
959
|
6,575
|
|||||||
Repayment
of loans from Teekay Shipping
Corporation
|
129,400
|
-
|
129,400
|
|||||||
Purchase
of three Suezmax tankers from Teekay
Shipping
Corporation
|
-
|
120,039
|
120,039
|
|||||||
Working
capital
|
6,311
|
-
|
6,311
|
|||||||
151,800
|
126,040
|
277,840
|
Fixed-
Rate
Tanker Segment
$
|
Fixed-Rate
LNG
Segment
$
|
Spot
Tanker Segment
$
|
Other
$
|
Total
$
|
||||||||||||
Balance
as of December 31, 2005
|
134,196
|
35,631
|
-
|
1,070
|
170,897
|
|||||||||||
Goodwill
acquired
|
356
|
-
|
-
|
-
|
356
|
|||||||||||
Balance
as of September 30, 2006
|
134,552
|
35,631
|
-
|
1,070
|
171,253
|
Weighted-Average
Amortization Period
(years)
|
Gross
Carrying Amount
$
|
Accumulated
Amortization
$
|
Net
Carrying Amount
$
|
||||||||||
Contracts
of affreightment
|
10.2
|
124,250
|
(54,806
|
)
|
69,444
|
||||||||
Time-charter
contracts
|
19.2
|
182,552
|
(20,205
|
)
|
162,347
|
||||||||
Intellectual
property
|
7.0
|
9,588
|
(4,166
|
)
|
5,422
|
||||||||
15.4
|
316,390
|
(79,177
|
)
|
237,213
|
Weighted-Average
Amortization Period
(years)
|
Gross
Carrying Amount
$
|
Accumulated
Amortization
$
|
Net
Carrying Amount
$
|
||||||||||
Contracts
of affreightment
|
10.2
|
124,250
|
(45,748
|
)
|
78,502
|
||||||||
Time-charter
contracts
|
19.2
|
182,552
|
(13,358
|
)
|
169,194
|
||||||||
Intellectual
property
|
7.0
|
7,701
|
(3,117
|
)
|
4,584
|
||||||||
15.4
|
314,503
|
(62,223
|
)
|
252,280
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
$
|
$
|
||||||
Revolving
Credit Facilities
|
1,306,185
|
769,000
|
|||||
Premium
Equity Participating Security Units (7.25%)
due
May 18, 2006
|
-
|
143,750
|
|||||
Senior
Notes (8.875%) due July 15, 2011
|
262,383
|
265,559
|
|||||
U.S.
Dollar-denominated Term Loans due through 2019
|
475,486
|
289,582
|
|||||
EURO-denominated
Term Loans due through 2023
|
397,182
|
377,352
|
|||||
2,441,236
|
1,845,243
|
||||||
Less
current portion
|
41,820
|
159,053
|
|||||
Total
|
2,399,416
|
1,686,190
|
Year
|
Commitment
|
|||
2006
|
$
|
6.3
million
|
||
2007
|
145.1
million
|
|||
2008
|
8.6
million
|
|||
2009
|
8.5
million
|
|||
2010
|
88.1
million
|
Year
|
Commitment
|
2006
|
123.2
million Euros ($156.1 million)
|
2007
|
23.3
million Euros ($29.5 million)
|
2008
|
24.4
million Euros ($30.9 million)
|
2009
|
25.6
million Euros ($32.5 million)
|
2010
|
26.9
million Euros ($34.1 million)
|
Thereafter
|
64.8
million Euros ($82.2 million)
|
Three
Months
Ended
September
30,
|
Nine
Months
Ended
September
30,
|
||||||
2005
|
2005
|
||||||
$
|
|
$
|
|||||
Net
income - as reported
|
42,675
|
426,290
|
|||||
Less: Total stock option compensation expense
|
1,978
|
6,099
|
|||||
Net
income - pro forma
|
40,697
|
420,191
|
|||||
Basic
earnings per common share:
|
|||||||
- As reported
|
0.55
|
5.34
|
|||||
- Pro forma
|
0.53
|
5.26
|
|||||
Diluted
earnings per common share:
|
|||||||
- As reported
|
0.52
|
4.99
|
|||||
- Pro forma
|
0.49
|
4.92
|
Options
(000’s)
#
|
Weighted-Average
Exercise
Price
$
|
||||||
Outstanding
at December 31, 2005
|
4,160
|
24.81
|
|||||
Granted
|
1,045
|
38.94
|
|||||
Exercised
|
(568
|
)
|
20.55
|
||||
Forfeited
|
(37
|
)
|
30.15
|
||||
Outstanding
at September 30, 2006
|
4,600
|
28.50
|
|||||
Exercisable
at September 30, 2006
|
2,881
|
21.74
|
Options
(000’s)
#
|
Weighted-Average
Grant
Date
Fair
Value
$
|
||||||
Nonvested
at December 31, 2005
|
1,774
|
9.75
|
|||||
Granted
|
1,045
|
11.30
|
|||||
Vested
|
(1,083
|
)
|
7.68
|
||||
Forfeited
|
(17
|
)
|
12.20
|
||||
Nonvested
at September 30, 2006
|
1,719
|
11.98
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
2006
$
|
September
30,
2005
$
|
September
30,
2006
$
|
September
30,
2005
$
|
||||||||||
Minority
interest expense
|
(7,289
|
)
|
(5,354
|
)
|
(4,682
|
)
|
(12,429
|
)
|
|||||
Loss
on bond redemption (
note
7
)
|
-
|
(1,334
|
)
|
(375
|
)
|
(10,109
|
)
|
||||||
Loss
from settlement of interest rate swaps
|
-
|
-
|
-
|
(7,820
|
)
|
||||||||
Writeoff
of capitalized loan costs
|
-
|
-
|
-
|
(7,462
|
)
|
||||||||
Income
tax recovery (expense)
|
4,985
|
2,005
|
(5,839
|
)
|
11,877
|
||||||||
Loss
on expiry of options to construct LNG carriers
|
-
|
-
|
(6,102
|
)
|
-
|
||||||||
Miscellaneous
|
1,184
|
2,616
|
7,115
|
7,211
|
|||||||||
Other
- net
|
(1,120
|
)
|
(2,067
|
)
|
(9,883
|
)
|
(18,732
|
)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
2006
$
|
September
30,
2005
$
|
September
30,
2006
$
|
September
30,
2005
$
|
||||||||||
Net
income
|
79,847
|
42,675
|
201,944
|
426,290
|
|||||||||
Other
comprehensive income:
|
|||||||||||||
Unrealized gain on marketable securities
|
2,680
|
-
|
7,277
|
-
|
|||||||||
Unrealized (loss) gain on derivative instruments
|
(80,480
|
)
|
39,251
|
24,678
|
(46,925
|
)
|
|||||||
Reclassification adjustment for (gain) loss on derivative instruments
included in net income
|
(711
|
)
|
(2,211
|
)
|
(2,145
|
)
|
12,493
|
||||||
Comprehensive
income
|
1,336
|
79,715
|
231,754
|
391,858
|
|
Interest
Rate
Index
|
Principal
Amount
$
|
Fair
Value / Carrying Amount of Liability
$
|
Weighted-Average
Remaining
Term
(years)
|
Fixed
Interest
Rate
(%)
(1)
|
|||||||||||
LIBOR-Based
Debt:
|
||||||||||||||||
U.S.
Dollar-denominated interest rate swaps
(2)
|
LIBOR
|
421,499
|
19,494
|
30.3
|
4.9
|
|||||||||||
U.S.
Dollar-denominated interest
rate
swaps
|
LIBOR
|
850,000
|
10,871
|
4.7
|
4.8
|
|||||||||||
U.S.
Dollar-denominated interest
rate
swaps
(3)
|
LIBOR
|
1,513,536
|
(14,546
|
)
|
14.3
|
5.2
|
||||||||||
LIBOR-Based
Restricted Cash Deposit:
|
||||||||||||||||
U.S.
Dollar-denominated interest rate swaps
(2)
|
LIBOR
|
432,549
|
(24,265
|
)
|
30.3
|
4.8
|
||||||||||
EURIBOR-Based
Debt:
|
||||||||||||||||
Euro-denominated
interest rate
swaps
(4)
(5)
|
EURIBOR
|
397,182
|
5,488
|
17.7
|
3.8
|
(1) |
Excludes
the margin the Company pays on its variable-rate debt, which as of
September 30, 2006 ranged from 1.1% to
1.3%.
|
(2) |
U.S.
Dollar-denominated interest rate swaps are held in Teekay Nakilat
to hedge
its floating-rate lease obligations and floating-rate restricted
cash
deposits. (See Note 11a). Principal amount reduces quarterly following
delivery of each LNG newbuilding.
|
(3) |
Inception
dates of swaps are 2006 ($984 million), 2007 ($226 million) and 2009
($304
million).
|
(4) |
Principal
amount reduces monthly to 70.1 million Euros ($88.8 million) by the
maturity dates of the swap
agreements.
|
(5) |
Principal
amount is the U.S. Dollar equivalent of 313.4 million
Euros.
|
Interest
Rate
Index
|
Principal
Amount
(1)
$
|
Start
Date
|
Remaining
Term
(years)
|
Fixed
Interest Rate
(%)
|
|||||||||
LIBOR
|
150,000
|
|
|
August
31, 2009
|
|
|
12.0
|
|
|
4.3
|
|
||
LIBOR
|
|
|
125,000
|
|
|
May
15, 2007
|
|
|
12.0
|
|
|
4.0
|
|
(1) |
Principal
amount reduces $5.0 million semi-annually ($150.0 million) and $2.6
million quarterly ($125.0 million).
|
September
30, 2006
$
|
December
31,
2005
$
|
||||||
Unrealized
loss on derivative instruments
|
(44,948
|
)
|
(67,482
|
)
|
|||
Unrealized
gain (loss) on marketable securities
|
5,928
|
(1,348
|
)
|
||||
(39,020
|
)
|
(68,830
|
)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
2006
|
September
30,
2005
|
September
30,
2006
|
September
30,
2005
|
||||||||||
Net
income available for common stockholders
|
$
|
79,847
|
$
|
42,675
|
$
|
201,944
|
$
|
426,290
|
|||||
Weighted-average
number of common shares
|
73,251,038
|
77,104,662
|
73,223,613
|
79,872,761
|
|||||||||
Dilutive
effect of employee stock options and
restricted
stock awards
|
1,693,000
|
2,132,202
|
1,615,771
|
2,212,487
|
|||||||||
Dilutive
effect of Equity Units
|
-
|
3,323,021
|
479,469
|
3,310,121
|
|||||||||
Common
stock and common stock equivalents
...
|
74,944,038
|
82,559,885
|
75,318,853
|
85,395,369
|
|||||||||
Earnings
per common share:
|
|||||||||||||
- Basic
|
$
|
1.09
|
$
|
0.55
|
$
|
2.76
|
$
|
5.34
|
|||||
- Diluted
|
1.07
|
0.52
|
2.68
|
4.99
|
a) |
During
October 2006, the Company terminated one of its revolving credit
facilities, amended another to allow for additional borrowing of
up to
$119 million, and entered into a new 8-year reducing revolving credit
facility that allows for borrowing of up to $940 million. The amended
credit facility, which bears interest based on LIBOR plus a margin
of
0.625%, is collateralized by first-priority mortgages on eight of
the
Company’s vessels. The new credit facility, which bears interest based on
LIBOR plus a margin of 0.625%, is collateralized by first-priority
mortgages on 19 of the Company’s
vessels.
|
b) |
In
December 2006, the Company has agreed to sell a 2000-built LPG carrier
to
Teekay LNG and the related long-term, fixed-rate time charter for
a
purchase price of approximately $18.2 million effective January 1,
2007.
It is anticipated that the purchase will be financed with Teekay
LNG’s
existing revolving credit facilities. This vessel is chartered to
the
Norwegian state-owned oil company, Statoil ASA, and has a remaining
contract term of nine years.
|
c) |
In
December 2006, Teekay LNG announced that it has agreed to acquire
three
liquefied petroleum gas (or
LPG
) carriers from I.M. Skaugen ASA
(or
Skaugen
) for approximately $29.2 million per vessel. The
vessels are currently under construction and are expected to deliver
between early 2008 and mid-2009. Teekay LNG will acquire the vessels
upon
their delivery and will finance the acquisition of these vessels
through
existing and/or incremental debt, surplus cash balances, issuance
of
additional common units or combinations thereof. Upon delivery, the
vessels will be chartered to Skaugen, which engages in the marine
transportation of petrochemical gases and LPG, and the lightering
of crude
oil, at fixed rates, for a period of 15
years.
|
d)
|
On
December 19, 2006, the Company’s subsidiary Teekay Offshore Partners L.P.
(or
Teekay Offshore
) completed its initial public offering of
8,050,000 common units at a price of $21.00 per unit, for proceeds
of
$155.3 million, net of an estimated $13.8 million of expenses associated
with the offering. Teekay Offshore used the net offering proceeds
to repay
indebtedness to the Company and to redeem 1,050,000 of the common
units
held by the Company. Following the offering, the public owned a
40.3%
limited partner interest in Teekay Offshore and the Company owned
the
remaining partnership interests, including common units, subordinated
units, incentive distribution rights and Teekay Offshore's 2% general
partner interest.
The
Company formed Teekay Offshore in August 2006 to be an international
provider of marine transportation and storage services to the offshore
oil
industry. Teekay Offshore's only cash-generating asset is its 26%
interest
in Teekay Offshore Operating L.P., which Teekay Offshore controls
and
which holds substantially all of the Company’s shuttle tankers and FSO
units. Teekay Offshore also has rights to participate in certain
FPSO
opportunities involving
Petrojarl.
|
|
Immediately
preceding the closing of the initial public offering, the Company
amended
its omnibus agreement with Teekay LNG to include Teekay Offshore.
The
omnibus agreement governs, among other things, when the Company,
Teekay
LNG and Teekay Offshore may compete with each other and certain
rights of
first offer on LNG carriers, oil tankers, shuttle tankers and
FSO and FPSO
units. Under the amended agreement, Teekay LNG and Teekay Offshore
have
each granted to the Company a 30-day right of first offer on
any proposed
(a) sale, transfer or other disposition of any of Teekay LNG’s Suezmax
tankers or of Teekay Offshore's Aframax tankers, respectively,
or (b)
re-chartering of any of such Suezmax tankers or Aframax tankers
pursuant
to a time-charter with a term of at least three years if the
existing
charter expires or is terminated early. Likewise, the Company
has granted
similar rights of first offer to Teekay LNG for any LNG carriers
and
Teekay Offshore for any shuttle tankers or FSO or FPSO units,
it might
own, together with a purchase right upon any such proposed re-chartering
of those vessels.
|
· |
Voyage
charters, which are charters for shorter intervals that are priced
on a
current, or “spot,” market rate;
|
· |
Time
charters and bareboat charters, whereby vessels are chartered to
customers
for a fixed period of time at rates that are generally fixed, but
may
contain a variable component based on inflation, interest rates or
current
market rates; and
|
· |
Contracts
of affreightment, where we carry an agreed quantity of cargo for
a
customer over a specified trade route within a given period of
time.
|
Voyage
Charter
(1)
|
Time-Charter
|
Bareboat-Charter
|
Contract
of
Affreightment
|
|
Typical
contract length
|
Single
voyage
|
One
year or more
|
One
year or more
|
One
year or more
|
Hire
rate basis
(2)
|
Varies
|
Daily
|
Daily
|
Typically
daily
|
Voyage
expenses
(3)
|
We
pay
|
Customer
pays
|
Customer
pays
|
We
pay
|
Vessel
operating expenses
(3)
|
We
pay
|
We
pay
|
Customer
pays
|
We
pay
|
Off-hire
(4)
|
Customer
does not pay
|
Varies
|
Customer
typically pays
|
Customer
typically does not pay
|
(1) |
Under
a consecutive voyage charter, the customer pays for idle
time.
|
(2) |
“
Hire
”
rate refers to the basic payment from the charterer for the use of
the
vessel.
|
(3) |
Defined
below under “Important Financial and Operational Terms and
Concepts.”
|
(4) |
“
Off-hire
”
refers to the time a vessel is not available for
service.
|
Three
Months Ended
September
30, 2006
|
Three
Months Ended
September
30, 2005
|
||||||||||||||||||||||||
Fixed-Rate
Tanker Segment
($000’s)
|
Fixed-Rate
LNG Segment
($000’s)
|
Spot
Tanker
Segment
($000’s)
|
Total
($000’s)
|
Fixed-Rate
Tanker Segment
($000’s)
|
Fixed-Rate
LNG Segment
($000’s)
|
Spot
Tanker
Segment
($000’s)
|
Total
($000’s)
|
||||||||||||||||||
Voyage
revenues
|
191,916
|
25,218
|
260,599
|
477,733
|
178,669
|
24,503
|
222,422
|
425,594
|
|||||||||||||||||
Voyage
expenses
|
26,579
|
394
|
106,457
|
133,430
|
19,497
|
-
|
88,338
|
107,835
|
|||||||||||||||||
Net
voyage revenues
|
165,337
|
24,824
|
154,142
|
344,303
|
159,172
|
24,503
|
134,084
|
317,759
|
|||||||||||||||||
Vessel
operating expenses
|
33,900
|
4,156
|
14,883
|
52,939
|
32,102
|
3,401
|
15,240
|
50,743
|
|||||||||||||||||
Time
charter hire expense
|
45,669
|
-
|
55,179
|
100,848
|
52,467
|
-
|
68,089
|
120,556
|
|||||||||||||||||
Depreciation
and amortization
|
28,867
|
7,959
|
13,023
|
49,849
|
29,512
|
7,522
|
13,377
|
50,411
|
|||||||||||||||||
General
and administrative
(1)
|
15,459
|
3,478
|
20,885
|
39,822
|
14,970
|
3,397
|
22,088
|
40,455
|
|||||||||||||||||
Writedown
/ (gain) on sale of
vessels
and equipment
|
(6,509
|
)
|
-
|
(629
|
)
|
(7,138
|
)
|
2,111
|
-
|
(8,687
|
)
|
(6,576
|
)
|
||||||||||||
Restructuring
charge
|
-
|
-
|
2,948
|
2,948
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Income
from vessel operations
|
47,951
|
9,231
|
47,853
|
105,035
|
28,010
|
10,183
|
23,977
|
62,170
|
Nine
Months Ended
September
30, 2006
|
Nine
Months Ended
September
30, 2005
|
||||||||||||||||||||||||
Fixed-Rate
Tanker Segment
($000’s)
|
Fixed-Rate
LNG Segment
($000’s)
|
Spot
Tanker
Segment
($000’s)
|
Total
($000’s)
|
Fixed-Rate
Tanker Segment
($000’s)
|
Fixed-Rate
LNG Segment
($000’s)
|
Spot
Tanker
Segment
($000’s)
|
Total
($000’s)
|
||||||||||||||||||
Voyage
revenues
|
566,437
|
71,437
|
788,442
|
1,426,316
|
539,627
|
73,546
|
809,972
|
1,423,145
|
|||||||||||||||||
Voyage
expenses
|
69,333
|
794
|
308,331
|
378,458
|
50,722
|
50
|
253,888
|
304,660
|
|||||||||||||||||
Net
voyage revenues
|
497,104
|
70,643
|
480,111
|
1,047,858
|
488,905
|
73,496
|
556,084
|
1,118,485
|
|||||||||||||||||
Vessel
operating expenses
|
101,795
|
12,677
|
43,394
|
157,866
|
95,845
|
11,564
|
49,115
|
156,524
|
|||||||||||||||||
Time
charter hire expense
|
140,052
|
-
|
159,923
|
299,975
|
147,007
|
-
|
206,585
|
353,592
|
|||||||||||||||||
Depreciation
and amortization
|
87,772
|
23,392
|
39,326
|
150,490
|
90,306
|
22,567
|
41,927
|
154,800
|
|||||||||||||||||
General
and administrative
(1)
|
45,876
|
10,233
|
65,429
|
121,538
|
41,010
|
9,599
|
63,723
|
114,332
|
|||||||||||||||||
Writedown
/ (gain) on sale of
vessels
and equipment
|
(4,664
|
)
|
-
|
(1,431
|
)
|
(6,095
|
)
|
7,480
|
-
|
(131,803
|
)
|
(124,323
|
)
|
||||||||||||
Restructuring
charge
|
-
|
-
|
7,414
|
7,414
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Income
from vessel operations
|
126,273
|
24,341
|
166,056
|
316,670
|
107,257
|
29,766
|
326,537
|
463,560
|
(1) |
Includes
direct general and administrative expenses and indirect general and
administrative expenses (allocated to each segment based on estimated
use
of corporate resources).
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||||||||
|
2006
(Calendar
Days)
|
2005
(Calendar
Days)
|
|
Percentage
Change
(%)
|
|
2006
(Calendar
Days)
|
|
2005
(Calendar
Days)
|
|
Percentage
Change
(%)
|
|
||||||||
Owned
Vessels
|
3,693
|
|
|
3,868
|
|
|
(4.5)
|
|
11,076
|
|
|
11,264
|
|
|
(1.7)
|
|
|||
Chartered-in
Vessels
|
|
|
1,390
|
|
|
1,694
|
|
|
(17.9)
|
|
|
4,297
|
|
|
4,636
|
|
|
(7.3)
|
|
Total
|
|
|
5,083
|
|
|
5,562
|
|
|
(8.6)
|
|
|
15,373
|
|
|
15,900
|
|
|
(3.3)
|
|
· |
a
reduction in our chartered-in fleet;
and
|
· |
the
sale of two older shuttle tankers in 2005 and one 1981-built shuttle
tanker in July 2006 (the
Tanker
Dispositions
);
|
· |
the
delivery of a Suezmax tanker newbuilding in July
2005;
|
· |
the
inclusion of an Aframax tanker, previously operating in our spot
tanker
segment, that commenced service under a long-term time charter during
the
fourth quarter of 2005 (the
Aframax
Transfer
);
and
|
· |
the
inclusion of a chartered-in VLCC, previously operating in our spot
tanker
segment, that commenced service under a long-term time charter in
April
2005 (the
VLCC
Transfer
).
|
· |
increases
of $5.8 million and $3.0 million, respectively, relating to increased
utilization of our shuttle tanker fleet under contracts of affreightment
due to the completion in 2006 of seasonal maintenance of North Sea
offshore oil facilities primarily during the second quarter, rather
than
the third quarter as is typical and as occurred in 2005, and recent
contract renewals at higher rates. The increase for the nine months
ended
September 30, 2006 was partially offset by lower oil production levels
in
the North Sea;
|
· |
increases
of $3.1 million and $10.6 million, respectively, relating to the
Suezmax
delivery in July 2005;
|
· |
increases
of $2.1 million and $6.2 million, respectively, relating to the Aframax
Transfer;
|
· |
increases
of $1.2 million and $3.1 for the three and nine months ended September
30,
2006 relating to rate adjustments on certain of our long-term time
charters; and
|
· |
an
increase of $5.0 million for the nine months ended September 30,
2006
relating to the VLCC Transfer;
|
· |
decreases
of $2.9 million and $10.6 million, respectively, relating to the
completion of a contract of affreightment primarily serviced by a
chartered-in methanol carrier in late
2005;
|
· |
a
decrease of $2.0 million for both the three and nine months ended
September 30, 2006 relating to a settlement of a rate adjustment
for the
prior year on one of our long-term time charters in the three months
ended
September 30, 2005; and
|
· |
decreases
of $1.2 million and $7.1 million, respectively, relating to the Tanker
Dispositions.
|
· |
an
increase of $0.7 million for both the three and nine months ended
September 30, 2006 relating to our Australian-crewed vessels and
certain
offshore vessels;
|
· |
increases
of $0.6 million and $4.1 million, respectively, due to increased
crew-related costs, and repairs and maintenance relating to certain
vessels in our shuttle tanker fleet;
|
· |
increases
of $0.5 million and $1.5 million, respectively, relating to the Aframax
Transfer;
|
· |
increases
of $0.4 million and $1.8 million, respectively, from the depreciation
of
the U.S. Dollar from corresponding 2005 levels relative to other
currencies in which we pay certain vessel operating expenses;
and
|
· |
increases
of $0.3 million and $1.5 million, respectively, relating to the Suezmax
delivery in July 2005;
|
· |
decreases
of $0.7 million and $3.6 million, respectively, from the sale of
two older
shuttle tankers during 2005 as part of the Tanker
Dispositions.
|
· |
decreases
of $1.0 million and $2.0 million, respectively, relating to the Tanker
Dispositions and the sale and leaseback of one shuttle tanker in
2005;
and
|
· |
decreases
of $0.7 million and $2.7 million, respectively, relating to a reduction
in
amortization from the contracts of affreightment we acquired as part
of
our acquisition of Navion AS during
2003;
|
· |
increases
of $0.7 million and $2.7 million, respectively, relating to the Aframax
Transfer and the Suezmax delivery during 2005 to our fixed-rate tanker
segment.
|
· |
a
$6.4 million gain on the sale of a 1981-built shuttle tanker in July
2006
as part of the Tanker Dispositions;
and
|
· |
gains
of $0.1 million and $0.4 million, respectively, from amortization
of a
deferred gain on the sale and leaseback of one shuttle tanker in
March
2005;
|
· |
a
$2.2 million writedown of certain offshore equipment during the nine
months ended September 30, 2006 that occurred due to a reassessment
of the
estimated net realizable value of this equipment and followed a $12.3
million writedown in June 2005 arising from the early termination
of a
contract for this equipment.
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||||||||
2006
(Calendar
Days)
|
2005
(Calendar
Days)
|
Percentage
Change
(%)
|
2006
(Calendar
Days)
|
2005
(Calendar
Days)
|
Percentage
Change
(%)
|
||||||||||||||
Owned
Vessels
|
368
|
368
|
-
|
1,092
|
1,092
|
-
|
· |
a
decrease of $2.4 million due to the
Catalunya
Spirit
being off-hire for 35.5 days to complete repairs and for a scheduled
drydock during the second quarter of 2006;
and
|
· |
a
decrease of $1.4 million during the nine months ended September 30,
2006
due to the effect on our Euro-denominated revenues from the weakening
of
the Euro against the U.S. Dollar during the 2006 period compared
to the
same period in 2005;
|
· |
an
increase of $0.8 million from 15.2 days of off-hire for one of our
LNG
carriers during February 2005.
|
· |
increases
of $0.6 million and $1.2 million, respectively, relating to increased
spending on spares, consumables and maintenance
costs;
|
· |
an
increase of $1.0 million for the nine months ended September 30,
2006,
from the cost of the repairs completed on the
Catalunya Spirit
during
the second quarter of 2006 in excess of estimated insurance recoveries;
and
|
· |
an
increase of $0.1 million for the three months ended September 30,
2006 due
to the effect on our Euro-denominated vessel operating expenses from
the
strengthening of the Euro against the U.S. Dollar during such period
compared to the same period last year (a majority of our vessel operating
expenses are denominated in Euros, which is primarily a function
of the
nationality of our crew);
|
· |
a
decrease of $0.7 million for the nine months ended September 30,
2006
primarily relating to repair and maintenance work completed on
one of our
LNG carriers during February 2005;
and
|
· |
a
decrease of $0.3 million for the nine months ended September
30, 2006 due
to the effect on our Euro-denominated vessel operating expenses
from the
weakening of the Euro against the U.S. Dollar during such period
compared
to the same period last year.
|
Three
Months Ended
September
30, 2006
|
Three
Months Ended
September
30, 2005
|
||||||||||||||||||
Vessel
Type
|
Net
Voyage Revenues
($000’s)
|
Revenue
Days
|
TCE
per
Revenue
Day
($)
|
Net
Voyage Revenues
($000’s)
|
Revenue
Days
|
TCE
per
Revenue
Day
($)
|
|||||||||||||
Suezmax
Tankers
(1)
|
14,617
|
460
|
31,776
|
10,064
|
409
|
24,606
|
|||||||||||||
Aframax
Tankers
(1)
|
102,172
|
2,937
|
34,788
|
85,225
|
3,430
|
24,846
|
|||||||||||||
Large/Medium
Product Tankers
|
22,955
|
867
|
26,476
|
26,671
|
975
|
27,355
|
|||||||||||||
Small
Product Tankers
|
14,398
|
990
|
14,543
|
12,124
|
1,003
|
12,088
|
|||||||||||||
Totals
|
154,142
|
5,254
|
29,338
|
134,084
|
5,817
|
23,050
|
(1) |
Results
for the three months ended September 30, 2005 for our Suezmax tankers
include realized losses from FFAs of $0.1 million ($289 per revenue
day).
Results for the three months ended September 30, 2006 and 2005 for
our
Aframax tankers include realized losses from FFAs of $1.2 million
($411
per revenue day) and gains of $1.8 million ($512 per revenue day),
respectively.
|
Nine
Months Ended
September
30, 2006
|
Nine
Months Ended
September
30, 2005
|
||||||||||||||||||
Vessel
Type
|
Net
Voyage Revenues
($000’s)
|
Revenue
Days
|
TCE
per
Revenue
Day
($)
|
Net
Voyage Revenues
($000’s)
|
Revenue
Days
|
TCE
per
Revenue
Day
($)
|
|||||||||||||
Very
Large Crude Carriers
|
-
|
-
|
-
|
8,347
|
90
|
92,744
|
|||||||||||||
Suezmax
Tankers
(1)
|
45,042
|
1,240
|
36,324
|
55,589
|
1,526
|
36,428
|
|||||||||||||
Aframax
Tankers
(1)
|
317,259
|
8,789
|
36,097
|
379,733
|
11,326
|
33,529
|
|||||||||||||
Large/Medium
Product Tankers
|
73,266
|
2,530
|
28,959
|
69,630
|
2,404
|
28,964
|
|||||||||||||
Small
Product Tankers
|
44,544
|
2,794
|
15,943
|
42,785
|
2,948
|
14,513
|
|||||||||||||
Totals
|
480,111
|
15,353
|
31,271
|
556,084
|
18,294
|
30,397
|
(1) |
Results
for the nine months ended September 30, 2005 for our Suezmax tankers
include realized losses from FFAs of $3.0 million ($1,989 per revenue
day). Results for the nine months ended September 30, 2006 and 2005
for
our Aframax tankers include realized gains from FFAs of $0.2 million
($24
per revenue day) and $2.2 million ($197 per revenue day), respectively.
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||||||||
2006
(Calendar
Days)
|
2005
(Calendar
Days)
|
Percentage
Change
(%)
|
2006
(Calendar
Days)
|
2005
(Calendar
Days)
|
Percentage
Change
(%)
|
||||||||||||||
Owned
Vessels
|
2,392
|
2,510
|
(4.7
|
)
|
7,098
|
8,287
|
(14.3
|
)
|
|||||||||||
Chartered-in
Vessels
|
2,907
|
3,425
|
(15.1
|
)
|
8,311
|
10,251
|
(18.9
|
)
|
|||||||||||
Total
|
5,299
|
5,935
|
(10.7
|
)
|
15,409
|
18,538
|
(16.9
|
)
|
· |
the
sale of 13 older Aframax tankers and one older Suezmax tanker in
2005
(collectively, the
Spot
Tanker Dispositions
);
|
· |
the
net decrease of the number of chartered-in vessels, primarily Aframax
tankers;
|
· |
the
Aframax Transfer; and
|
· |
the
VLCC Transfer;
|
· |
the
delivery of four new Aframax tankers in 2005 (collectively, the
Spot
Tanker Deliveries
).
|
· |
decreases
of $3.3 million and $50.9 million, respectively, relating to the
Spot
Tanker Dispositions;
|
· |
decreases
of $1.7 million and $7.8 million, respectively, relating to the Aframax
Transfer;
|
· |
a
decrease of $30.2 million for the nine months ended September
30, 2006
from the decreases in the number of chartered-in vessels, partially
offset
by the slight increases in our average TCE rate and the impact
of our FFAs
mentioned above for such period compared to the same period in
2005;
and
|
· |
a
decrease of $8.4 million relating to the VLCC Transfer for the nine
months
ended September 30, 2006;
|
· |
an
increases of $21.0 million for the three months ended September
30, 2006
from the increases in our average TCE rate, partially offset
by the
decreases in the number of chartered-in vessels and the impact
of our FFAs
mentioned above for such period compared to the same period
in 2005;
and
|
· |
increases
of $4.0 million and $21.3 million, respectively, relating to
the Spot
Tanker Deliveries.
|
· |
decreases
of $0.8 million and $8.1 million, respectively, relating to the Spot
Tanker Dispositions; and
|
· |
decreases
of $0.4 million and $1.3 million, respectively, relating to the Aframax
Transfer;
|
· |
increases
of $0.9 million and $3.5 million, respectively, relating to the Spot
Tanker Deliveries.
|
· |
decreases
of $12.9 million and $44.2 million, respectively, relating to the
net
decrease of the number of chartered-in vessels and a decrease of
4.5% in
our average per day time-charter hire expense to $18,981 per day
and
$19,242 per day for the three and nine months ended September 30,
2006,
from $19,880 per day and $20,153 per day for the same periods last
year;
and
|
· |
a
decrease of $2.5 million relating to the VLCC Transfer for the nine
months
ended September 30, 2006.
|
· |
decreases
of $0.7 million and $4.5 million, respectively, relating to the Spot
Tanker Dispositions; and
|
· |
decreases
of $0.4 million and $1.1 million, respectively, relating to the Aframax
Transfer;
|
· |
increases
of $0.7 million and $3.0 million, respectively, relating to Spot
Tanker
Deliveries.
|
· |
increases
of $2.3 million and $6.6 million, respectively, relating to employee
stock
option compensation;
|
· |
increases
of $0.8 million and $3.4 million, respectively, from the depreciation
of
the U.S. Dollar from corresponding 2005 levels relative to other
currencies in which we pay certain general and administrative expenses;
|
· |
an
increase $2.1 million during the nine months ended September 30,
2006 in
severance costs; and
|
· |
an
increase of $0.7 million during the nine months ended September 30,
2006
due to the incremental costs of Teekay LNG being a public company
since
May 2005;
|
· |
decreases
of $2.6 million and $2.4 million, respectively, relating to the grant
of
0.7 million restricted stock units to employees in March 2005 (please
read
Item 1 - Financial Statements: Note 10 - Capital Stock);
and
|
· |
decreases
of $0.8 million and $4.3 million, respectively, relating to the reduction
in costs associated with our long-term incentive program for management
(please read Item 1 - Financial Statements: Note 11 - Commitments
and
Contingencies - Long-Term Incentive
Program).
|
Nine
Months Ended
|
||
September
30, 2006
|
September
30, 2005
|
|
($000’s)
|
($000’s)
|
|
Net
operating cash flows
|
398,841
|
439,174
|
Net financing cash flows |
2,896
|
(668,331)
|
Net investing cash flows |
(335,490)
|
54,971
|
In
millions of U.S. Dollars
|
Total
|
Balance
of
2006
|
2007
and
2008
|
2009
and
2010
|
Beyond
2010
|
|||||||||||
U.S.
Dollar-Denominated Obligations:
|
||||||||||||||||
Long-term
debt
(1)
|
2,078.7
|
4.2
|
428.9
|
252.4
|
1,393.2
|
|||||||||||
Chartered-in
vessels (operating leases)
|
1,105.6
|
103.9
|
561.0
|
237.7
|
203.0
|
|||||||||||
Commitments
under capital leases
(2)
|
256.6
|
6.3
|
153.7
|
96.6
|
-
|
|||||||||||
Commitments
under capital leases -
newbuildings
(3)
|
1,093.6
|
-
|
54.7
|
52.1
|
986.8
|
|||||||||||
Newbuilding
installments
(4)
|
1,041.6
|
55.4
|
723.9
|
262.3
|
-
|
|||||||||||
Vessel
purchases and conversion
(5)
|
167.8
|
41.6
|
126.2
|
-
|
-
|
|||||||||||
Commitment
for volatile organic compound
emissions
equipment
|
15.0
|
15.0
|
-
|
-
|
-
|
|||||||||||
Total
U.S. Dollar-denominated obligations
|
5,758.9
|
226.4
|
2,048.4
|
901.1
|
2,583.0
|
|||||||||||
Euro-Denominated
Obligations:
(6)
|
||||||||||||||||
Long-term
debt
(1)
|
397.2
|
2.2
|
19.3
|
22.2
|
353.5
|
|||||||||||
Commitments
under capital leases
(2)
(7)
|
365.3
|
156.1
|
60.4
|
66.6
|
82.2
|
|||||||||||
Total
Euro-denominated obligations
|
762.5
|
158.3
|
79.7
|
88.8
|
435.7
|
|||||||||||
Total
|
6,521.4
|
384.7
|
2,128.1
|
989.9
|
3,018.7
|
(1) |
Excludes
interest payments.
|
(2) | We are committed to capital leases on five Suezmax tankers and two LNG carriers. Each of these capital lease requires us to purchase the vessel at the end of its respective lease term. The amounts in the table include our purchase obligations for the vessels. Please read Item 1 - Financial Statements: Note 9 - Capital Leases and Restricted Cash. |
(3) |
As
of September 30, 2006, we were committed to capital leases on
three LNG
carriers scheduled for delivery between October 2006 and February
2007.
Under the terms of the leases and upon vessel delivery, we are
required to
have on deposit an amount of cash that, together with interest
earned on
the deposit, will equal the remaining amounts owing under the
leases. As
of September 30, 2006, we were committed to funding an additional
$102.9
million of deposits ($34.3 million - fourth quarter of 2006 and
$68.6
million - 2007) throughout the remainder of the construction
period
(including our joint venture partner’s 30% interest). We have long-term
financing arrangements in place to fund these remaining commitments.
Please read Item 1 - Financial Statements: Note 11 - Commitments
and
Contingencies.
|
(4) |
Represents
remaining construction costs, including the joint venture partner’s 30%
interest, as applicable, but excluding capitalized interest
and
miscellaneous construction costs, for two Aframax tankers,
four product
tankers, ten Suezmax tankers and two LNG carriers. Please read
Item 1 -
Financial Statements: Note 11 - Commitments and
Contingencies.
|
(5) |
Represents
remaining purchase obligations and conversion costs, but
excluding
capitalized interest and miscellaneous conversion costs,
for one Suezmax
tanker and one Aframax tanker. Please read Item 1 - Financial
Statements:
Note 11 - Commitments and Contingencies.
|
(6) |
Euro-denominated
obligations are presented in U.S. Dollars and have been
converted using
the prevailing exchange rate as of September 30,
2006.
|
(7) |
Existing
restricted cash deposits, together with the interest
earned on the
deposits, will equal the remaining amounts we owe under
the lease
arrangements, including our obligation to purchase the
vessels at the end
of the lease terms.
|
Expected
Maturity Date
|
|||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
Thereafter
|
Rate
(10)
|
|||
(in
millions of U.S. dollars, except percentages)
|
|||||||||
Long-Term
Debt
:
|
|||||||||
Fixed-Rate ($U.S.)
|
1.8
|
7.2
|
8.4
|
13.4
|
17.2
|
355.4
|
7.3%
|
||
Average Interest Rate
|
4.1%
|
4.1%
|
4.3%
|
4.7%
|
4.8%
|
7.6%
|
|||
Variable Rate ($U.S.)
(1)
|
2.4
|
87.8
|
325.5
|
103.7
|
118.1
|
1,037.8
|
6.1%
|
||
Variable Rate (Euro)
(2)
(3)
|
2.2
|
9.3
|
10.0
|
10.7
|
11.5
|
353.5
|
4.4%
|
||
Capital
Lease Obligations
(4)
(5)
|
|||||||||
Fixed-Rate ($U.S.)
(6)
|
2.2
|
130.7
|
3.7
|
3.8
|
84.0
|
-
|
7.4%
|
||
Average Interest Rate
(7)
|
7.5%
|
8.8%
|
5.4%
|
5.4%
|
5.5%
|
-
|
|||
Interest
Rate Swaps:
(8)
|
|||||||||
Contract Amount ($U.S.)
(5)
(9)
|
-
|
296.2
|
8.6
|
213.4
|
28.8
|
1,816.5
|
5.1%
|
||
Average Fixed Pay Rate
(1)
|
-
|
5.4%
|
5.7%
|
4.3%
|
5.3%
|
5.1%
|
|||
Contract Amount (Euro)
(3)
|
2.2
|
9.3
|
10.0
|
10.7
|
11.5
|
353.5
|
3.8%
|
||
Average Fixed Pay Rate
(2)
|
3.8%
|
3.8%
|
3.8%
|
3.8%
|
3.8%
|
3.8%
|
|||
(1) |
Interest
payments for U.S. Dollar-denominated debt and interest rate swaps
are
based on LIBOR.
|
(2) |
Interest
payments on Euro-denominated debt and interest rate swaps are based
on
EURIBOR.
|
(3) |
Euro-denominated
amounts have been converted to U.S. Dollars using the prevailing
exchange
rate as of September 30, 2006.
|
(4) |
Excludes
capital lease obligations (present value of minimum lease payments)
of
254.6 million Euros ($322.8 million) on two of our LNG carriers with
a
weighted-average fixed interest rate of 5.7%. Under the terms of
these
fixed-rate lease obligations, we are required to have on deposit,
subject
to a weighted-average fixed interest rate of 5.2%, an amount of cash
that,
together with the interest earned thereon, will fully fund the amount
owing under the capital lease obligations, including purchase obligations.
As at September 30, 2006, this amount was 258.9 million Euros ($328.1
million). Consequently, we are not subject to interest rate risk
from
these obligations or deposits.
|
(5) |
During
January 2006, three subsidiaries of Teekay Nakilat, each of which
has
contracted to have built one of the RasGas II vessels, sold their
shipbuilding contracts and entered into 30-year leases with SeaSpirit,
that will commence upon the delivery of the respective vessels. Under
the
terms of the leases and upon vessel delivery, we are required to
have on
deposit, subject to a variable rate of interest, an amount of cash
that,
together with interest earned on the deposit, will equal the remaining
amounts owing under the variable-rate leases. The deposits, which
as at
September 30, 2006 totaled $437.6 million, and the lease obligations,
which upon delivery are expected to be approximately $180 million
per
vessel, have been swapped for fixed-rate deposits and fixed-rate
obligations. Consequently, we are not subject to interest rate risk
from
these obligations and deposits and the lease obligations, cash deposits
and related interest rate swaps have been excluded from the table
above.
As at September 30, 2006, the contract amount, fair value and fixed
interest rates of these interest rate swaps related to these capital
lease
obligations and restricted cash deposits were $421.5 million and
$432.5
million, $19.5 million and ($24.3) million, 4.9% and 4.8%,
respectively.
|
(6) |
The
amount of capital lease obligations represents the present value
of
minimum lease payments together with our purchase
obligation.
|
(7) |
The
average interest rate is the weighted-average interest rate implicit
in
the capital lease obligations at the inception of the
leases.
|
(8) |
The
average variable receive rate for our interest rate swaps is set
monthly
at the 1-month LIBOR or EURIBOR, quarterly at the 3-month LIBOR or
semi-annually at the 6-month LIBOR.
|
(9) |
Includes
interest rate swaps of $984.0 million, $226.0 million and $304.0
million
that have inception dates of 2006, 2007 and 2009,
respectively.
|
(10) |
Rate
refers to the weighted-average effective interest rate for our debt,
including the margin we pay on our floating-rate debt, as at September
30,
2006, and average fixed pay rate for our swap agreements, as applicable.
The average fixed pay rate for our interest rate swaps excludes the
margin
we pay on our floating-rate debt, which as of September 30, 2006,
ranged
from 1.1% to 1.3%.
|
Contract
|
Carrying
Amount
|
Fair
|
|||||||||||
Amount
|
Asset
|
Liability
|
Value
|
||||||||||
(in
millions of U.S. dollars)
|
|||||||||||||
September
30, 2006
|
|
||||||||||||
Foreign
Currency Forward Contracts
|
455.9
|
1.7
|
(1.7
|
)
|
|||||||||
Interest
Rate Swap Agreements
|
2,749.7
|
35.8
|
38.8
|
(3.0
|
)
|
||||||||
Interest
Rate Swaptions
|
275.0
|
1.7
|
(1.7
|
)
|
|||||||||
Bunker
Fuel Swap Contracts
|
7.3
|
0.1
|
(0.1
|
)
|
|||||||||
Forward
Freight Agreements
|
4.6
|
3.2
|
(3.2
|
)
|
|||||||||
Debt
(1)
|
3,023.1
|
3,023.1
|
(3,040.2
|
)
|
|||||||||
December
31, 2005
|
|||||||||||||
Foreign
Currency Forward Contracts
|
119.1
|
1.2
|
(1.2
|
)
|
|||||||||
Interest
Rate Swap Agreements
|
2,421.4
|
33.5
|
(33.5
|
)
|
|||||||||
Forward
Freight Agreements
|
35.4
|
0.2
|
(0.2
|
)
|
|||||||||
Debt
(1)
|
2,433.0
|
2,433.0
|
(2,466.2
|
)
|
(1) |
Includes
capital lease obligations and loan from joint venture
partner.
|
· |
REGISTRATION
STATEMENT ON FORM F-3 (FILE NO. 33-97746) FILED WITH THE SEC ON OCTOBER
4,
1995;
|
· |
REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-42434) FILED WITH THE SEC ON
JULY 28, 2000;
|
· |
REGISTRATION
STATEMENT ON FORM F-3 (FILE NO. 333-102594) FILED WITH THE SEC ON
JANUARY 17, 2003; AND
|
· |
REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-119564) FILED WITH THE SEC ON
OCTOBER
6, 2004
|
TEEKAY SHIPPING CORPORATION | ||
|
|
|
Date: December 21, 2006 | By: | /s/ Vincent Lok |
Vincent Lok |
||
Senior
Vice President and Chief Financial Officer
(Principal
Financial and Accounting
Officer)
|
Vancouver, Canada, | /s/ | Ernst & Young LLP |
December 21, 2006 |
|
Chartered Accountants |
(1)
|
TEEKAY
LNG PARTNERS L.P.
a
limited partnership formed and existing under the laws of the Republic
of
the Marshall Islands with its registered office at c/o Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH96960
(the "
Borrower
");
and
|
(2)
|
the
banks and financial institutions listed in Schedule 1, each acting
through
its office at the address indicated against its name in Schedule
1
(together "
the
Banks
"
and each a "
Bank
");
and
|
(3)
|
ING
BANK N.V.
acting
as arranger (in that capacity the "
Arranger
");
and
|
(4)
|
ING
BANK N.V.
acting
as administrative agent and security trustee through its office at
60
London Wall, London EC2M 5TQ (in that capacity the "
Agent
").
|
1 |
Definitions
and Interpretation
|
1.1.1
|
"
Administration
"
has the meaning given to it in paragraph 1.1.3 of the ISM
Code.
|
1.1.2
|
the
"
Advance
Date
",
in relation to any Drawing, means the date on which that Drawing
is
advanced by the Banks to the Borrower pursuant to
Clause 2.
|
1.1.3
|
"
Assignments
"
means the first priority assignments of each of the Vessels' Earnings,
Insurance, Requisition Compensation and Charter Rights referred to
in
clause 8.1.4.
|
1.1.4
|
"
Approved
Brokers
"
means H. Clarkson & Co. Ltd, Simpson Spence & Young Shipbrokers
Ltd, Compass Maritime Services LLC, Fearnley AS, R. S. Platou AS
and P.F.
Bassoe AS.
|
1.1.5
|
"
Borrower's
Accounts
"
means the consolidated financial accounts of the Borrower to be provided
to the Agent pursuant to Clause 10.2.18 of this
Agreement.
|
1.1.6
|
"
Borrower
Group
"
means, from time to time, the Borrower, the Guarantors and each of
their
respective Subsidiaries.
|
1.1.7
|
"
the
Borrower's Obligations
"
means all of the liabilities and obligations of the Borrower to the
Finance Parties under or pursuant to the Borrower's Security Documents,
whether actual or contingent, present or future, and whether incurred
alone or jointly or jointly and severally with any other and in whatever
currency, including (without limitation) interest, commission and
all
other charges and expenses.
|
1.1.8
|
"
the
Borrower's Security Documents
"
means those of the Security Documents to which the Borrower is or
is to be
a party.
|
1.1.9
|
"
Break
Costs
"
means all documented costs, losses, premiums or penalties incurred
by any
of the Finance Parties in the circumstances contemplated by Clause
17.4 or
as a result of any of them receiving any prepayment of all or any
part of
the Facility (whether pursuant to Clauses 5.2 and 5.3 or otherwise)
or any
other payment under or in relation to the Security Documents on a
day
other than the due date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in liquidating
or
re-employing deposits from third parties acquired to effect or maintain
the Facility, and any liabilities, expenses or losses incurred by
any of
the Finance Parties in terminating or reversing, or otherwise in
connection with, any interest rate and/or currency swap, transaction
or
arrangement entered into by any of the Finance Parties with any member
of
the Borrower Group to hedge any exposure arising under this Agreement,
or
in terminating or reversing, or otherwise in connection with, any
open
position arising under this
Agreement.
|
1.1.10
|
"
Business
Day
"
means a day on which banks are open for the transaction of business
of the
nature contemplated by this Agreement (and not authorised by law
to close)
in New York City, United States of America; London, England; Madrid,
Spain
and any other financial centre which the Agent may reasonably consider
appropriate for the operation of the provisions of this Agreement.
|
1.1.11
|
"
Change
of Control
"
means that
|
(i)
|
Teekay
Shipping Corporation ceases to own (directly or indirectly) a majority
of
the limited liability company interests in the General Partner;
or
|
(ii)
|
the
Corporate Guarantor ceases to own (directly or indirectly) a majority
of
the shares in the Owners; or
|
(iii)
|
the
Borrower ceases to own (directly or indirectly) a majority of the
shares
in the Corporate Guarantor.
|
1.1.12
|
"
Charters
"
means the charterparty for Vessel A dated 22 February 2001 and made
between the relevant Owner and Charterer A and the charterparty for
Vessel
B dated 28 June 2001 made between the relevant Owner and Union Fenosa,
S.A. (formerly Union Electrica Fenosa, S.A.) as assigned by Union
Fenosa,
S.A. to Charterer B (each a "
Charter
")
as each has been and may be supplemented and amended from time to
time.
|
1.1.13
|
"
Charterers
"
means Charterer A and Charterer B (each a "
Charterer
").
|
1.1.14
|
"
Charterer
A
"
means Repsol YPF Trading Y Transporte
S.A.
|
1.1.15
|
"
Charterer
B
"
means Union Fenosa Gas, S.A.
|
1.1.16
|
"
Charter
Rights
",
in relation to a Vessel, means all rights and benefits accruing to
the
Owner of that Vessel under or pursuant to the relevant Charter and
not
forming part of the Earnings.
|
1.1.17
|
"
Commitment
"
means, in relation to each Bank, the amount of the Facility which
that
Bank agrees to advance to the Borrower as its several liability as
indicated against the name of that Bank in Schedule 1 Part I and
Schedule 1 Part II, as reduced from time to time in accordance with
Clause
2.4, or, where the context permits, the amount of the Facility advanced
by
that Bank and remaining
outstanding.
|
1.1.18
|
"
Commitment
Commission
"
means the commitment commission to be paid by the Borrower to the
Agent on
behalf of the Banks pursuant to Clause
7.
|
1.1.19
|
"
Commitment
Termination Date
"
means the date falling one month prior to the Termination
Date.
|
1.1.20
|
a
"
Communication
"
means any notice, approval, demand, request or other communication
from
one party to this Agreement to any other party to this
Agreement.
|
1.1.21
|
"
the
Communications Address
"
means c/o Teekay Shipping (Canada) Ltd,
Suite
2000, Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C
2K2
,
fax no: +1 604 681 3011 marked for the attention of Vice President,
Finance.
|
1.1.22
|
"
Company
"
means at any given time the company responsible for a Vessel's compliance
with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and or
(ii)
the ISPS Code (as the case may be).
|
1.1.23
|
"
Confirmation
"
means a confirmation exchange or deemed exchanged between a Future
Swap
Provider and the Borrower as contemplated by a Master
Agreement.
|
1.1.24
|
"
Corporate
Guarantor
"
means Teekay Shipping Spain, S.L.
|
1.1.25
|
"
Corporate
Guarantee
"
means the guarantee and indemnity of the Corporate Guarantor in respect
of
the Borrower's Obligations referred to in clause
8.1.2.
|
1.1.26
|
"
Currency
of Account
"
means, in relation to any payment to be made to a Finance Party pursuant
to any of the Security Documents, the currency in which that payment
is
required to be made by the terms of the relevant Security Document.
|
1.1.27
|
"
Default
Rate
"
means the rate which is the aggregate of LIBOR, any Mandatory Cost,
the
Margin and one point five per centum (1.5%) per
annum.
|
1.1.28
|
"
Distribution
Drawing
"
means a Drawing used or intended to be used by the Borrower to fund
cash
distributions to its general partner and limited
partners.
|
1.1.29
|
"
DOC
"
means in relation to the ISM Company, a valid Document of Compliance
issued for the ISM Company by the Administration under paragraph
13.2 of
the ISM Code.
|
1.1.30
|
"
Dollars
"
"
US$
"
and "
$
"
each means available and freely transferable and convertible funds
in
lawful currency of the United States of
America.
|
1.1.31
|
"
Drawdown
Notice
"
means a notice complying with Clause 2.3 in the form set out in Schedule
5.
|
1.1.32
|
"
Drawing
"
means a part (or, if requested and available, all) of the Facility
advanced by the Banks to the Borrower in accordance with Clause 2,
and
which shall be designated either a General Revolving Drawing or a
Distribution Drawing.
|
1.1.33
|
"
Earnings
",
in relation to a Vessel, means all hires including (without limitation)
all time charter hire and bareboat charter hire, freights, pool income
and
other sums payable to or for the account of the Owner in respect
of that
Vessel including (without limitation) all remuneration for salvage
and
towage services, demurrage and detention moneys, contributions in
general
average, compensation in respect of any requisition for hire and
damages
and other payments (whether awarded by any court or arbitral tribunal
or
by agreement or otherwise) for breach, termination or variation of
any
contract for the operation, employment or use of that
Vessel.
|
1.1.34
|
"
Earnings
Account
"
means a bank account to be opened (in the event that an Event of
Default
has occurred) in the joint names of the Owners with the Earnings
Account
Holder .
|
1.1.35
|
"
Earnings
Account Holder
"
means the bank or financial institution which (following the occurrence
of
an Event of Default) at any time, with the Agent's prior written
consent,
holds the Earnings Account.
|
1.1.36
|
"
Encumbrance
"
means any mortgage, charge, pledge, lien, assignment, hypothecation,
preferential right, option, title retention or trust arrangement
or any
other agreement or arrangement which, in any of the aforementioned
instances, has the effect of creating
security.
|
1.1.37
|
"
Environmental
Affiliate
"
means an agent or employee of an Owner or a person in a contractual
relationship with an Owner in respect of the Vessel owned by it (including
without limitation, the operation of or the carriage of cargo of
such
Vessel).
|
1.1.38
|
"
Environmental
Approvals
"
means any present or future permit, licence, approval, ruling, variance,
exemption or other authorisation required under the applicable
Environmental Laws.
|
1.1.39
|
"
Environmental
Claim
"
means any and all enforcement, clean-up, removal, administrative,
governmental, regulatory or judicial actions, orders, demands or
investigations instituted or completed pursuant to any Environmental
Laws
or Environmental Approvals together with any claims made by any third
person relating to damage, contribution, loss or injury resulting
from any
Environmental Incident.
|
1.1.40
|
"
Environmental
Incident
"
means:
|
(a)
|
any
release of Environmentally Sensitive Material from a Vessel;
or
|
(b)
|
any
incident in which Environmentally Sensitive Material is released
from a
vessel other than a Vessel and which involves a collision between
a Vessel
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the relevant Vessel is actually
or potentially liable to be arrested, attached, detained or injuncted
and/or where any guarantor, any manager (or any sub-manager of such
Vessel) or any of its officers, employees or other persons retained
or
instructed by it (or such sub-manager) are at fault or allegedly
at fault
or otherwise liable to any legal or administrative action;
or
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from such Vessel and in connection with which that
Vessel
is actually or potentially liable to be arrested and/or where any
guarantor, any manager (or any sub-manager of the relevant Vessel)
or any
of its officers, employees or other persons retained or instructed
by it
(or such sub-manager) are at fault or allegedly at fault or otherwise
liable to any legal or administrative
action.
|
1.1.41
|
"
Environmental
Laws
"
means all present and future laws, regulations, treaties and conventions
of any applicable jurisdiction
which:
|
(a)
|
have
as a purpose or effect the protection of, and/or prevention of harm
or
damage to, the environment;
|
(b)
|
relate
to the carriage of Environmentally Sensitive Material or to actual
or
threatened releases of Environmentally Sensitive
Material;
|
(c)
|
provide
remedies or compensation for harm or damage to the environment;
or
|
(d)
|
relate
to Environmentally Sensitive Materials or health or safety
matters.
|
1.1.42
|
"
Environmentally
Sensitive Material
"
means (i) oil and oil products and (ii) any other waste, pollutant,
contaminant or other substance (including any liquid, solid, gas,
ion,
living organism or noise) that may be harmful to human health or
other
life or the environment or a nuisance to any person or that may make
the
enjoyment, ownership or other territorial control of any affected
land,
property or waters more costly for such person to a material
degree.
|
1.1.43
|
"
Event
of Default
"
means any of the events set out in
Clause 12.2.
|
1.1.44
|
"
Execution
Date
"
means the date on which this Agreement is executed by each of the
parties
hereto.
|
1.1.45
|
"
Existing
Indebtedness
"
means the Financial Indebtedness owed by Naviera Teekay Gas S.L.
under the
terms of a syndicated credit agreement dated 22 February 2001 entered
into
with J.P. Morgan Europe Limited as agent for a syndicate of lenders
in
respect of Vessel A.
|
1.1.46
|
"
Facility
"
means the reducing revolving credit facility made available by the
Banks
to the Borrower pursuant to this
Agreement.
|
1.1.47
|
"
the
Facility Outstandings
"
at any time means the total of all Drawings made at that time, to
the
extent not reduced by repayments, prepayments or voluntary
reductions.
|
1.1.48
|
"
the
Facility Period
"
means the period beginning on the Execution Date and ending on the
date
when the whole of the Indebtedness has been repaid in full and the
Borrower has ceased to be under any further actual or contingent
liability
to the Finance Parties under or in connection with the Security
Documents.
|
1.1.49
|
"
Fee
Letter
"
means a letter or letters from the Agent to the Borrower setting
out
certain fees payable to the Agent in connection with the
Facility.
|
1.1.50
|
"
the
Finance Parties
"
means the Banks, the Arranger, the Agent and any Future Swap
Provider.
|
1.1.51
|
"
Financial
Indebtedness
"
means any indebtedness of any person for or in respect
of:
|
(a)
|
moneys
borrowed or raised;
|
(b)
|
amounts
raised under any acceptance credit
facility;
|
(c)
|
amounts
raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or similar
instruments;
|
(d)
|
amounts
raised pursuant to any issue of shares of the relevant person which
are
expressed to be redeemable;
|
(e)
|
the
amount of any liability in respect of leases or hire purchase contracts
which would, in accordance with GAAP, be treated as finance or capital
leases;
|
(f)
|
the
amount of any liability in respect of any purchase price for assets
or
services, the payment of which is deferred for a period in excess
of one
hundred and eighty (180) days;
|
(g)
|
all
reimbursement obligations whether contingent or not in respect of
amounts
paid under a letter of credit or similar
instrument;
|
(h)
|
all
interest rate, currency swap and similar agreements obliging the
making of
payments, whether periodically or upon the happening of a contingency
(and
the value of such indebtedness shall be the mark-to-market valuation
of
such transaction at the relevant
time);
|
(i)
|
amounts
raised under any other transaction (including, without limitation,
any
forward sale or purchase agreement) having the commercial effect
of a
borrowing; and
|
(j)
|
any
guarantee of indebtedness falling within paragraphs (a) to (i)
above.
|
1.1.52
|
"
First
Reduction Date
"
means the date falling six (6) calendar months after the Execution
Date.
|
1.1.53
|
"
Free
Liquidity
"
means cash, cash equivalents and marketable securities to which the
Borrower and/or its Subsidiaries shall have free, immediate and direct
access each as reflected in the Borrower's most recent Borrower's
Accounts.
|
1.1.54
|
"
Future
Swap Provider
"
means any party that enters into a Master Agreement with the Borrower
for
the purpose of hedging interest costs in relation to the Facility
and is
designated by the Borrower to the Agent as a Future Swap
Provider.
|
1.1.55
|
"
GAAP
"
means the generally accepted accounting principles in the United
States of
America.
|
1.1.56
|
"
General
Revolving Drawing
"
means a Drawing other than a Distribution
Drawing.
|
1.1.57
|
"
General
Partner
"
means Teekay GP L.L.C., a Marshall Islands limited liability company
acting in its capacity as the general partner in the
Borrower.
|
1.1.58
|
"
Guarantors
"
means the Corporate Guarantor and each of the Owners (each a "
Guarantor
").
|
1.1.59
|
"
the
Indebtedness
"
means the Facility Outstandings; any Master Agreement Liabilities;
all
other sums of any nature including costs (together with all interest
on
any of those sums) which from time to time may be payable by the
Borrower
to the Finance Parties pursuant to the Security Documents; any damages
payable as a result of any breach by the Borrower of any of the Security
Documents; and any damages or other sums payable as a result of any
of the
obligations of the Borrower under or pursuant to any of the Security
Documents being disclaimed by a liquidator or any other person, or,
where
the context permits, the amount thereof for the time being
outstanding.
|
1.1.60
|
"
Insurances
",
in relation to a Vessel, means all policies and contracts of insurance
(including but not limited to hull and machinery, all entries in
protection and indemnity or war risks associations) which are from
time to
time taken out or entered into in respect of or in connection with
that
Vessel or her increased value and (where the context permits) all
benefits
thereof, including all claims of any nature and returns of
premium.
|
1.1.61
|
"
Interest
Payment Date
"
means each date for the payment of interest in accordance with
Clause 6.
|
1.1.62
|
"
Interest
Period
"
means each interest period selected by the Borrower or agreed by
the Banks
pursuant to Clause 6.
|
1.1.63
|
"
the
ISM Code
"
means the International Ship Management Code for the Safe Operation
of
Ships and for Pollution Prevention.
|
1.1.64
|
"
ISM
Company
"
means, at any given time, the company responsible for a Vessel's
compliance with the ISM Code under paragraph 1.1.2 of the ISM
Code.
|
1.1.65
|
"
the
ISPS Code
"
means the International Ship and Port Security Code as adopted by
the
Conference of Contracting Governments to the Safety of Life at Sea
Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2
of
the Safety of Life at Sea Convention
1974.
|
1.1.66
|
"
law
"
or "
Law
"
means any law, statute, treaty, convention, regulation, instrument
or
other subordinate legislation or other legislative or quasi-legislative
rule or measure, or any order or decree of any government, judicial
or
public or other body or authority, or any directive, code of practice,
circular, guidance note or other direction issued by any competent
authority or agency (whether or not having the force of
law).
|
1.1.67
|
"
LIBOR
"
means the rate, rounded to the nearest four decimal places downwards
(if
the digit displayed in the fifth decimal place is 1,2,3 or 4) or
upwards
(if the digit displayed in the fifth decimal place is 5,6,7,8 or 9)
displayed on Telerate page 3750 (or such other page or pages which
replace(s) such page for the purposes of displaying offered rates
of
leading banks, for deposits in Dollars of amounts equal to the amount
of
the relevant Drawing for a period equal in length to the relevant
Interest
Period or if there is no such display rate then available for Dollars
for
an amount comparable to the Drawing, the arithmetic mean (rounded
to the
nearest four decimal places downwards (if the digit displayed in
the fifth
decimal place is 1, 2, 3 or 4) or upwards if the digit displayed
in the
fifth decimal place is 5, 6, 7, 8 or 9) of the respective rates notified
to the Agent by each of the Reference Banks as the rate at which
it is
offered deposits in Dollars and for the required period by prime
banks in
the London Interbank Market.
|
1.1.68
|
"
Majority
Banks
"
means any one or more Banks whose combined Proportionate Shares exceed
sixty six and two thirds per centum
(66⅔%).
|
1.1.69
|
"
Managers
"
means Teekay Servicios Maritimos S.L. as the technical managers of
the
Vessels and Teekay Shipping Limited as the commercial managers of
the
Vessel (each a "
Manager
").
|
1.1.70
|
"
Mandatory
Cost
"
means for each Bank to which it applies, the cost imputed to that
Bank of
compliance with the mandatory liquid asset requirements of the Bank
of
England and/or the banking supervision or other costs imposed by
the
Financial Services Authority, determined in accordance with
Schedule 6 (
Calculation
of the Mandatory Cost
).
|
1.1.71
|
"
Margin
"
means fifty five basis points
(55bps).
|
1.1.72
|
"
Master
Agreement
"
means any ISDA Master Agreement entered into between a Future Swap
Provider and the Borrower for the purpose of hedging interest costs
under
the Facility (and designated by the Borrower as a Master Agreement
for the
purposes of this Facility) and each Confirmation exchanged pursuant
to
that Master Agreement.
|
1.1.73
|
"
Master
Agreement Liabilities
"
means at any relevant time all liabilities of the Borrower to a Future
Swap Provider under or pursuant to a Master Agreement, whether actual
or
contingent, present or future.
|
1.1.74
|
"
Material
Adverse Effect
"
means a material adverse change in, or a material adverse effect
on:
|
(a)
|
the
financial condition, assets, prospects or business of any Security
Party
or on the consolidated financial condition, assets, prospects or
business
of the Borrower Group;
|
(b)
|
the
ability of any Security Party to perform and comply with its obligations
under any Security Document or to avoid any Event of
Default;
|
(c)
|
the
validity, legality or enforceability of any Security Document;
or
|
(d)
|
the
validity, legality or enforceability of any security expressed to
be
created pursuant to any Security Document or the priority and ranking
of
any such security,
|
|
provided
that, in determining whether any of the forgoing circumstances shall
constitute such a material adverse change or material adverse effect
for
the purposes of this definition, the Finance Parties shall consider
such
circumstance in the context of (x) the Borrower Group taken as a
whole and
(y) the ability of the Borrower to perform each of its obligations
under
the Security Documents.
|
1.1.75
|
"
Material
Subsidiary
"
means a Subsidiary of the Borrower
whose:
|
(a)
|
net
assets exceed 10 per cent. of the consolidated net assets of the
Borrower
Group; or
|
(b)
|
gross
assets exceed 10 per cent of the consolidated gross assets of the
Borrower
Group;
|
(c)
|
current
revenues exceed 10 percent. of the consolidated revenues of the Borrower
Group during the two most recent consecutive
quarters.
|
1.1.76
|
"
the
Maximum Facility Amount
"
means an amount not exceeding the three hundred and thirty million
Dollars
($330,000,000) subject to any reductions effected in accordance with
Clauses 2.4, 15.7 and 15.8.
|
1.1.77
|
"
Mortgages
"
means together the first priority Spanish ship mortgages over each
of the
Vessels made or to be made between the relevant Owner and the Banks
referred to in Clause 8.1.5 (each a "
Mortgage
").
|
1.1.78
|
"
Owner
"
means in respect of Vessel A, Naviera Teekay Gas S.L. (formerly Naviera
F
Tapias Gas S.A.) and in respect of Vessel B, Naviera Teekay Gas II
S.L.
(formerly Naviera F Tapias Gas II
S.A.)
|
1.1.79
|
"
Owners
Guarantee
"
means the joint and several guarantee and indemnity of each of the
Owners
in respect of the Indebtedness referred to in Clause
8.1.1.
|
1.1.80
|
"
Party
"
means a party to this Agreement and any Future Swap Provider.
|
1.1.81
|
"
Permitted
Liens
"
means (i) any Encumbrance which has the prior written approval of
the
Agent acting upon the instructions of all the Banks or (ii) any
Encumbrances that do not exceed ten million Dollars ($10,000,000)
and
arise either by operation of law or in the ordinary course of the
business
of the relevant Security Party which are discharged in the ordinary
course
of business.
|
1.1.82
|
"
Pledgor
"
means the Corporate Guarantor.
|
1.1.83
|
"
Potential
Event of Default
"
means any event which, with the giving of notice and/or the passage
of
time and/or the satisfaction of any materiality test, would constitute
an
Event of Default.
|
1.1.84
|
"
Pre-Approved
Classification Society
"
means any of Det norske Veritas, Lloyds Register of Shipping, American
Bureau of Shipping (ABS), Germanischer Lloyd or Bureau
Veritas.
|
1.1.85
|
"
Pre-Approved
Flag
"
means Spain, Bahamas, Singapore, the Marshall Islands, Norwegian
International Ship Registry, Liberia, Isle of Man, Cayman Islands
and
Bermuda.
|
1.1.86
|
"
Proceedings
"
means any suit, action or proceedings begun by any of the Finance
Parties
arising out of or in connection with the Security
Documents.
|
1.1.87
|
"
Proportionate
Share
"
means, for each Bank, the percentage that its Commitment bears to
the
aggregate Commitments of all Banks from time to time, being initially
the
percentage indicated against the name of that Bank in Schedule
1.
|
1.1.88
|
"
Reference
Banks
"
means ING Bank N.V., HSBC Bank plc and The Royal Bank of Scotland
plc.
|
1.1.89
|
"
Requisition
Compensation
",
in relation to a Vessel, means all compensation or other money which
may
from time to time be payable to an Owner as a result of that Vessel
being
requisitioned for title or in any other way compulsorily acquired
(other
than by way of requisition for hire).
|
1.1.90
|
"
the
Security Documents
"
means this Agreement, the Assignments, the Owners Guarantee, the
Shares
Charges, the Corporate Guarantee, the Mortgages, or (where the context
permits) any one or more of them, and any other agreement or document
which may at any time be executed as security for the payment of
all or
any part of the Indebtedness.
|
1.1.91
|
"
Security
Parties
"
means, at any relevant time, the Borrower, the Owners, the Corporate
Guarantor, the Pledgor and any other party who may at any time during
the
Facility Period be liable for, or provide security for, all or any
part of
the Indebtedness, and "
Security
Party
"
means any one of them.
|
1.1.92
|
"
Shares
Charges
"
means the pledges or charges of the shares of each of the Owners
executed
by the Pledgor in favour of the Banks referred to in Clause
8.1.3.
|
1.1.93
|
"
SMC
"
means a valid safety management certificate issued for a Vessel by
or on
behalf of the Administration under paragraph 13.7 of the ISM
Code.
|
1.1.94
|
"
SMS
"
means, in relation to each Vessel, a safety management system for
that
Vessel developed and implemented in accordance with the ISM Code
and
including the functional requirements, duties and obligations required
by
the ISM Code.
|
1.1.95
|
"
Subordination
Agreement
"
means a subordination agreement to be entered into between the Borrower,
the Agent on behalf of the Banks and itself and a Future Swap Provider
pursuant to which the Future Swap Provider will subordinate its interest
in the Security Documents to that of the Banks and the Agent in such
form
as the Agent (acting on the instructions of all the Lenders, such
instructions to be obtained by the Agent and given by the Lenders
as soon
as possible) shall reasonably
require.
|
1.1.96
|
"
Subsequent
Reduction Dates
"
means each date falling at consecutive six (6) monthly intervals
after the
previous Subsequent Reduction Date which in the case of the first
Subsequent Reduction Date shall be six (6) months after the First
Reduction Date.
|
1.1.97
|
"
Subsidiary
"
means a subsidiary undertaking, as defined in section 736 Companies
Act
1985 or any analogous definition under any other relevant system
of
law.
|
1.1.98
|
"
Tangible
Net Worth
"
means the issued and paid up share capital (including share premium
or
items of a similar nature (but excluding shares which are expressed
to be
redeemable)), loans from shareholders (where subordinated to the
satisfaction of the Agent), and amounts standing to the credit of
the
capital reserves of the Borrower,
|
(a)
|
plus
any credit balance carried forward on the Borrower's consolidated
profit
and loss account,
|
(b)
|
less:
|
|
(i)
any
debit balance carried forward on the Borrower's consolidated profit
and
loss account;
|
|
(ii)
any
amount shown for goodwill, including on consolidation, or any other
intangible property (other than intangible property relating to contracts
as shown in the balance sheet of the Borrower);
and
|
|
(iii)
any
amount attributable to minority interests in
Subsidiaries.
|
1.1.99
|
"
Taxes
"
means all taxes, levies, imposts, duties, charges, fees, deductions
and
withholdings (including any related interest and penalties) and any
restrictions or conditions resulting in any charge, other than taxes
on
the overall net income of a Finance Party or branch thereof, and
"
Tax
"
and "
Taxation
"
shall be interpreted accordingly.
|
1.1.100
|
"
the
Termination Date
"
means the twelfth anniversary of the Execution
Date.
|
1.1.101
|
"
Total
Commitment
"
means at any time the sum of all the
Commitments.
|
1.1.102
|
"
Total
Loss
",
in relation to a Vessel, means:-
|
(a)
|
an
actual, constructive, arranged, agreed or compromised total loss
of that
Vessel; or
|
(b)
|
the
requisition for title, compulsory acquisition, nationalisation or
expropriation of that Vessel by or on behalf of any government or
other
authority (other than by way of requisition for hire);
or
|
(c)
|
the
capture, seizure, arrest, detention or confiscation of that Vessel,
unless
the Vessel is released and returned to the possession of its Owner
within
ninety (90) days after the capture, seizure, arrest, detention or
confiscation in
question.
|
1.1.103
|
"
Transfer
Certificate
"
means a certificate materially in the form set forth in Schedule
4 signed
by a Bank and a Transferee
whereby:-
|
(a)
|
such
Bank seeks to procure the transfer to such Transferee of all or a
part of
such Bank's rights and obligations under this Agreement upon and
subject
to the terms and conditions set out in Clause 14;
and
|
(b)
|
such
Transferee undertakes to perform the obligations it will assume as
a
result of delivery of such certificate to the Agent as is contemplated
in
Clause 14.
|
1.1.104
|
"
Transfer
Date
"
means, in relation to any Transfer Certificate, the date for the
making of
the transfer specified in the schedule to such Transfer
Certificate.
|
1.1.105
|
"
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 under
this
Agreement.
|
1.1.106
|
"
the
Trust Property
"
means:-
|
(a)
|
the
benefit of Clause 8 and the covenants contained in Clause 9.3;
and
|
(b)
|
all
benefits arising under (including, without limitation, all proceeds
of the
enforcement of) each of the Security Documents (other than this Agreement,
the Mortgages and the Shares Charges), with the exception of any
benefits
arising solely for the benefit of the
Agent.
|
1.1.107
|
"
Valuation
"
means in relation to a Vessel, the written valuation of that Vessel
expressed in Dollars addressed to all the Banks prepared by one of
the
Approved Brokers (or such other firms of reputable independent shipbrokers
as may be acceptable to the Majority Banks), to be nominated by the
Borrower. Such valuations shall be prepared at the Borrower's expense,
without a physical inspection, on the basis of a sale for prompt
delivery
for cash at arm's length on a charter free basis between a willing
buyer
and a willing seller.
|
1.1.108
|
"
Vessel
A
"
means m.v. "HISPANIA SPIRIT" and everything now or in the future
belonging
to her on board and
ashore.
|
1.1.109
|
"
Vessel
B
"
means m.v. "GALICIA SPIRIT" and everything now or in the future belonging
to her on board and
ashore.
|
1.1.110
|
"
the
Vessels
"
means
Vessel A and Vessel B (each a "
Vessel
").
|
1.2.1
|
words
denoting the plural number include the singular and vice
versa;
|
1.2.2
|
words
denoting persons include corporations, limited liability companies,
partnerships, associations of persons (whether incorporated or not)
or
governmental or quasi-governmental bodies or authorities and vice
versa;
|
1.2.3
|
references
to Recitals, Clauses, Schedules and Appendices are references to
recitals
and clauses of, and schedules and appendices to, this Agreement;
|
1.2.4
|
references
to this Agreement include the Recitals, the Schedules and the
Appendices;
|
1.2.5
|
the
headings and contents page(s) are for the purpose of reference only,
have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
|
1.2.6
|
references
to any document (including, without limitation, to all or any of
the
Security Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from
time
to time;
|
1.2.7
|
references
to statutes or provisions of statutes are references to those statutes,
or
those provisions, as from time to time amended, replaced or
re-enacted;
|
1.2.8
|
references
to any of the Finance Parties include its successors, transferees
and
assignees;
|
1.2.9
|
in
the case of the Borrower, any references to company or body corporate,
incorporation, shares, officers and directors and shareholders shall
be
construed as references to limited partnership, formation, common
units,
partners and unitholders as
appropriate;
|
1.2.10
|
references
to times of day are unless otherwise stated to London time;
and
|
1.2.11
|
unless
the contrary intention appears, a reference to a month or months
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 or
the
calendar month in which it is to end, except
that:
|
(i)
|
if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not); |
(ii)
|
if
there is no numerically corresponding day in that month, that period
will
end on the last Business Day in that month;
and
|
(iii)
|
notwithstanding
sub-paragraph (i) above, a
period which commences on the last Business Day of a month will end
on the
last Business Day in the next month or the calendar month in which
it is
to end, as appropriate.
|
2 |
The
Facility and its Purpose
|
2.1
|
Agreement
to lend
Subject
to the terms and conditions of this Agreement, and in reliance on
each of
the representations and warranties made or to be made in or in accordance
with each of the Security Documents, each of the Banks agrees to
advance
to the Borrower its Commitment of an aggregate principal amount not
exceeding the Maximum Facility Amount to be used by the Borrower
for the
purposes referred to in the Recital provided however that any Drawing
that
the Borrower intends to use as a Distribution Drawing shall be designated
as a Distribution Drawing in the relevant Drawdown Notice completed
in
accordance with clause 2.3 and such Distribution Drawing shall be
subject
to the repayment terms set forth in Clause
5.1.
|
2.2
|
Drawings
Subject
to satisfaction by the Borrower of the conditions set out in
Clause 3.1 (in respect of the first Drawing), Clause 3.3 (in respect
of all subsequent Drawings), and subject to Clause 2.3, and provided
that
the maximum aggregate amount of the Facility Outstandings at any
given
time during the Facility Period shall not exceed the Maximum Facility
Amount, each Drawing shall be advanced to the Borrower, in each case
by
the Agent transferring the amount of the Drawing to such account
as the
Borrower shall notify to the Agent in the relevant Drawdown Notice
by such
same day method of funds transfer as the Agent shall
select.
|
2.3
|
Advance
of Drawings
Each Drawing shall be advanced in Dollars. Each Drawing shall be
advanced
on a Business Day, provided that the Borrower shall have given to
the
Agent not more than ten and not fewer than three Business Days' notice
in
writing (and if such notice is given on the third Business Day prior
to
the required Advance Date it shall be given not later than 3:00 pm)
materially in the form set out in Schedule 5 of the required Advance
Date of the Drawing in question and provided that the requested Drawing
would not cause a breach of Clause 2.5. Each Drawdown Notice once
given
shall be irrevocable and shall constitute a warranty by the Borrower
that:-
|
2.3.1
|
all
conditions precedent to the advance of the Drawing requested in that
Drawdown Notice will have been satisfied on or before the Advance
Date
requested;
|
2.3.2
|
no
Event of Default or Potential Event of Default has occurred or will
then
have occurred; and
|
2.3.3
|
no
Event of Default or Potential Event of Default will result from the
advance of the Drawing in question.
|
|
The
Drawdown Notice shall state that the Drawing shall be designated,
based on
its intended use either as a General Revolving Drawing or a Distribution
Drawing
|
|
The
Agent shall promptly notify each Bank of the receipt of each Drawdown
Notice, following which each Bank will make its Proportionate Share
of the
amount of the requested Drawing available to the Borrower through
the
Agent on the Advance Date
requested.
|
2.4
|
Facility
Reduction
|
2.4.1
|
The
aggregate amount of the Facility available to the Borrower for drawing
under this Agreement shall be three hundred and thirty million Dollars
($330,000,000) during the period from the Execution Date until the
First
Reduction Date. On the First Reduction Date and on each of the Subsequent
Reduction Dates the amount of the Facility available for drawing
shall be
reduced in accordance with the reduction schedule set out in Schedule
3.
On the Termination Date the Facility available shall be reduced to
zero.
Subject to the proviso hereto, the mandatory reductions in the amount
of
the Facility available for drawing required pursuant to this Clause
will
be made in the amounts and at the times specified whether or not
the
Maximum Facility Amount is reduced pursuant to Clause 2.4.2, Clause
2.4.3,
Clause 2.4.4, Clause 15.7 or Clause 15.8. PROVIDED ALWAYS THAT any
reductions pursuant to Clause 2.4.2 (voluntary reductions), Clause
2.4.3
(sale) or Clause 2.4.4 (Total Loss) shall be applied to the remaining
mandatory reductions hereunder on a pro rata
basis.
|
2.4.2
|
The
Borrower may voluntarily cancel the Maximum Facility Amount in whole
or in
part in an amount of not less than five million Dollars ($5,000,000)
such
amount to be in integral multiples of one million Dollars ($1,000,000),
provided that it has first given to the Agent not fewer than three
(3)
Business Days' prior written notice expiring on a Business Day (the
"
Cancellation
Date
")
of its desire to reduce the Maximum Facility Amount. Such notice,
once
received by the Agent, shall be irrevocable and shall oblige the
Borrower
to make payment of all interest and Commitment Commission accrued
on the
amount so cancelled up to and including the Cancellation Date together
with any Break Costs in respect of such cancelled amount if the
Cancellation Date is not an Interest Payment Date. Any such reduction
in
the Maximum Facility Amount shall not be
reversed.
|
2.4.3
|
In
the event of a sale or disposal of a Vessel, the Maximum Facility
Amount
shall be reduced by the greater of (i) an amount equal to the Total
Commitment multiplied by a fraction the numerator of which is the
value of
the relevant Vessel (based on a Valuation) and the denominator of
which is
the aggregate value of the Vessels (based on their Valuations) and
(ii) an
amount sufficient to ensure that the Total Commitment remaining after
such
reduction does not exceed the aggregate of the remaining scheduled
charterhire payments to be paid to the relevant Owner under the relevant
Charter for the remaining Vessel during the remaining period of that
Charter (ignoring any option period which has not been exercised)
(the
"
Mandatory
Commitment Reduction
").
Such reduction shall be made on the date of such sale or disposal.
If, as
a result of any reduction in the Maximum Facility Amount pursuant
to this
Clause, the Facility Outstandings exceed the Maximum Facility Amount,
the
Borrower shall, on the date of the sale or disposal, prepay such
amount of
the Facility Outstandings as will ensure that the Facility Outstandings
are not greater than the Maximum Facility Amount. Any such prepayment
shall oblige the Borrower to make payment of all interest and Commitment
Commission accrued on the amount so reduced up to and including the
date
of reduction together with any Break Costs in respect of such reduced
amount if the date of such reduction is not an Interest Payment Date.
Any
such reduction in the Maximum Facility Amount shall not be
reversed.
|
2.4.4
|
In
the event that either Vessel becomes a Total Loss, on the earlier
to occur
of (a) the date of receipt of the proceeds of the Total Loss and
(b) the
date falling one hundred and eighty (180) days after the occurrence
of the
Total Loss (the "
Reduction
Date
"),
the Maximum Facility Amount shall be reduced by the Mandatory Commitment
Reduction. Any such reductions in the Maximum Facility Amount shall
not be
reversed. If, as a result of any reduction in the Maximum Facility
Amount
pursuant to this Clause the Facility Outstandings exceed the Maximum
Facility Amount, the Borrower shall, on the earlier to occur of (i)
the
date on which the relevant Owner receives the proceeds of such Total
Loss
and (ii) the one hundred and eightieth day after the date of such
Total
Loss occurring, prepay such amount of the Facility Outstandings as
will
ensure that the Facility Outstandings are not greater than the Maximum
Facility Amount. Any such prepayment shall not be reborrowed and
Clause
5.4 shall apply to any such
prepayment.
|
2.4.5
|
To
the extent that repayments or prepayments made by the Borrower to
the
Agent in accordance with this Agreement reduce the Facility Outstandings
to less than the Maximum Facility Amount, the Borrower shall again
be
entitled to make Drawings up to the Commitment Termination Date in
accordance with and subject to the terms of this Agreement. Any part
of
the Facility which is undrawn on the Commitment Termination Date
shall be
automatically cancelled.
|
2.4.6
|
Simultaneously
with each reduction of the Maximum Facility Amount in accordance
with
Clause 2.4.1, Clause 2.4.2, Clause 2.4.3 and Clause 2.4.4 (as the
case may
be), the Commitment of each Bank will reduce so that the Commitments
of
the Banks in respect of the reduced Maximum Facility Amount remain
in
accordance with their respective Proportionate
Shares.
|
2.4.7
|
Any
voluntary reductions of the Facility under Clause 2.4.2 or mandatory
reductions of the Facility under Clause 2.4.3 or 2.4.4 shall be applied
pro rata against the scheduled reductions of Commitment set out in
Schedule 3.
|
2.5
|
Restrictions
on Drawings
The Borrower shall not be entitled to make more than one Drawing
on any
Business Day. Each Drawing shall be of an amount of not less than
five
million Dollars ($5,000,000). If at any time during the Facility
Period
the Facility Outstandings exceed the Maximum Facility Amount then
available or if a proposed Drawing added to the Facility Outstandings
would result in the Maximum Facility Amount being exceeded then the
Borrower shall immediately pay to the Agent on behalf of the Banks
such
amounts as will ensure that the Facility Outstandings are equal to
or less
than the Maximum Facility Amount then available.
|
2.6
|
Termination
Date
No
Bank shall be under any obligation to advance all or any part of
its
Commitment after the Commitment Termination
Date.
|
2.7
|
Several
obligations
The
obligations of the Banks under this Agreement are several. The failure
of
a Bank to perform its obligations under this Agreement shall not
affect
the obligations of the Borrower to any Finance Party nor shall any
Finance
Party be liable for the failure of another Bank to perform any of
its
obligations under or in connection with this
Agreement.
|
2.8
|
Application
of Facility
Without
prejudice to the obligations of the Borrower under this Agreement,
no
Finance Party shall be obliged to concern itself with the application
of
the Facility by the Borrower.
|
2.9
|
Loan
facility and control accounts
The
Agent will open and maintain such loan facility account or such other
control accounts as the Agent shall in its discretion consider necessary
or desirable in connection with the Facility, and shall debit or
credit
such account with the amount of any Drawings hereunder, interest
accrued,
commission and expenses payable hereunder, and any amounts paid by
the
Borrower in respect of such obligations. Additionally:-
|
2.9.1
|
The
balance on that account shall represent the amount of the Borrower's
debt
to the Banks from time to time
hereunder.
|
2.9.2
|
Without
prejudice to that account, each Bank shall open an account in the
name of
the Borrower which shall show, according to the Commitments of each
Bank,
the amounts owing to it in respect of the liabilities referred to
above,
with the effect that the balance on that account shall represent
the
amount owed by the Borrower to each Bank from time to
time.
|
2.9.3
|
For
the purposes of Article 571 et seq. of the Spanish Law on Civil Procedure
(Ley de Enjuiciamiento Civil), the parties expressly agree that the
Agent
(or the Bank in question) may determine the debt due and payable
which may
be claimed in enforcement proceedings, by means of a certificate
showing
the balance on the Borrower's account or accounts. For the purposes
of the
preceding paragraph, it shall be sufficient for the purposes of bringing
enforcement proceedings to produce an authorised copy of that document
and
a notarial instrument incorporating a certificate issued by the Agent
(or
by the Bank in question) showing that the debt has been calculated
in
accordance with the terms agreed by the parties in this deed and
that the
balance in question is the same as that on the account or accounts
maintained by the Borrower.
|
2.9.4
|
It
is expressly agreed that the balance on the account or accounts in
question shall be treated as the evidence of the debt owed by the
Borrower, and that may be claimed in accordance with this Clause
2.9 and
the Security Documents.
|
3 |
Conditions Precedent and Subsequent
|
3.1
|
Conditions
Precedent
-
First
Drawing
Before
any Bank shall have any obligation to advance the first Drawing under
the
Facility, the Borrower shall deliver or cause to be delivered to
or to the
order of the Agent the following documents and
evidence:-
|
3.1.1
|
Evidence
of incorporation
Such
evidence as the Agent may reasonably require that each Security Party
was
duly incorporated in its country of incorporation and remains in
existence
and, where appropriate, in good standing, with power to enter into,
and
perform its obligations under, those of the Security Documents to
which it
is, or is intended to be, a party, including (without limitation)
a copy,
certified by a director or an officer of the Security Party (or its
sole
member or general partner) in question as true, complete, accurate
and
unamended, of all documents establishing or limiting the constitution
of
each Security Party.
|
3.1.2
|
Corporate
authorities
A
copy, certified by a director or any duly authorised officer of the
Security Party (or its sole member or general partner) in question
as
true, complete, accurate and neither amended nor revoked, of a resolution
of the directors of each Security Party or such Security Party's
general
partner (together, where appropriate, with signed waivers of notice
of any
directors' meetings) approving, and authorising or ratifying the
execution
of, those of the Security Documents and each Drawdown Notice to which
that
Security Party is or is intended to be a party and all matters incidental
thereto.
|
3.1.3
|
Officer's
certificate
A
certificate (i) signed by a duly authorised officer or representative
of
each of the Security Parties (or its sole member or general partner)
setting out the names of the directors and officers of that Security
Party
(or its sole member or general partner) and (ii) issued by each Security
Party's company registry confirming due incorporation and valid existence
and (when such information is maintained by the registry) the names
of its
directors and shareholders.
|
3.1.4
|
Power
of attorney
The
power of attorney (notarially attested and legalised, if necessary,
for
registration purposes) of each of the Security Parties under which
any
documents are to be executed or transactions undertaken by that Security
Party.
|
3.1.5
|
The
Security Documents
The
Security Documents, together with all notices and other documents
required
by any of them, duly executed.
|
3.1.6
|
Drawdown
Notice
A
Drawdown Notice.
|
3.1.7
|
Process
agent
A
letter from Teekay Shipping (UK) Ltd accepting their appointment
by each
of the Security Parties as agent for service of Proceedings pursuant
to
the Security Documents.
|
3.1.8
|
Legal
opinions
Confirmation
satisfactory to the Agent that all legal opinions required by the
Agent on
behalf of the Finance Parties will be given substantially in the
form
required by the Agent on behalf of the Finance
Parties.
|
3.1.9
|
Shares
Charges Documents
Any documents required by the Shares
Charges.
|
3.1.10
|
Certified
copies
Certified copies of the Charters.
|
3.1.11
|
Fee
Letter
The
Fee Letter duly signed and payment of all bank fees that have fallen
due
thereunder and hereunder.
|
3.1.12
|
Evidence
of Owners' title
Confirmation satisfactory to the Agent that (a) the Vessels are
permanently registered under the Vessels' respective flag states
in the
ownership of their respective Owners (b) that the Mortgages will
be
registered with first priority against the Vessels and (c) there
will be
no further Encumbrances registered against the
Vessels.
|
3.1.13
|
Accounts
The
audited consolidated accounts for the Borrower for the year ended
31
December 2005.
|
3.1.14
|
Evidence
of insurance
Evidence
that the Vessels are insured in the manner required by the Security
Documents and that letters of undertaking will be issued in the manner
required by the Security Documents, together with a written opinion
on the
Insurances from an insurance adviser appointed by the
Agent.
|
3.1.15
|
Confirmation
of class
A
Certificate
of Confirmation of Class for hull and machinery confirming that each
of
the Vessels is classed with the highest class applicable to vessels
of her
type with a Pre-Approved Classification
Society.
|
3.2
|
Conditions
Subsequent
The Borrower undertakes to deliver or to cause to be delivered to
the
Agent on, or not later than ten (10) days or such other period as
the
Agent may have consented to after, the first Advance Date, the following
additional documents and evidence:-
|
3.2.1
|
Legal
opinions
Such
legal opinions as the Agent on behalf of the Banks shall require
pursuant
to Clause 3.1.8.
|
3.2.2
|
Companies
Act registrations
Evidence that the prescribed particulars of the Security Documents
have
been delivered to the Registrar of Companies of England and Wales
and any
other relevant authorities within the statutory time limit.
|
3.2.3
|
Letters
of undertaking
Letters of undertaking in respect of the Insurances as required by
the
Security Documents together with copies of the relevant policies
or cover
notes or entry certificates duly endorsed with the interest of the
Agent.
|
3.2.4
|
Evidence
of Owners' title
Certificates of ownership and encumbrance (or equivalent) issued
by the
Registrar of Ships and the Registrar of Movable Assets (or equivalent
officials) of the Vessels' flag state confirming that (a) the Vessels
are
permanently registered under that flag in the ownership of their
respective Owners (b) the Mortgages have been registered with first
priority against the Vessels and (c) there are no further Encumbrances
registered against the Vessels.
|
3.3
|
Conditions
Precedent
-
Subsequent
Drawings
Before
any Bank shall have any obligation to advance any subsequent
Drawings
under the Facility, the Borrower shall deliver or cause to be delivered
to
the order of the Agent, a Drawdown Notice, in addition to the documents
and evidence referred to in Clause 3.1 where such documents and evidence
have not already been delivered to and received by the
Agent.
|
3.4
|
No
waiver
If
the Banks in their sole discretion agree to advance any part of the
Facility to the Borrower before all of the documents and evidence
required
by Clause 3.1 or Clause 3.3 (as the case may be) have been delivered
to or
to the order of the Agent, the Borrower undertakes to deliver all
outstanding documents and evidence to or to the order of the Agent
no
later than the date agreed by the Agent and the Borrower and the
advance
of any part of the Facility shall not be taken as a waiver of the
Agent's
right to require production of all the documents and evidence required
by
Clause 3.1 or Clause 3.3 (as the case may
be).
|
3.5
|
Form
and content
All
documents and evidence delivered to the Agent pursuant to this Clause
shall:-
|
3.5.1
|
be
in form and substance reasonably acceptable to the Agent;
|
3.5.2
|
be
accompanied, if required by the Agent, by translations into the English
language, certified in a manner acceptable to the Agent acting reasonably;
|
3.5.3
|
if
required for registration purposes, be certified, notarised, legalised
or
attested in a manner acceptable for
registration.
|
3.6
|
Event
of Default
No
Bank shall be under any obligation to advance any part of its Commitment
nor to act on any Drawdown Notice if, at the date of the Drawdown
Notice
or at the date on which the advance of a Drawing is requested in
the
Drawdown Notice, an Event of Default or Potential Event of Default
shall
have occurred, or if an Event of Default or Potential Event of Default
would result from the advance of the Drawing in
question.
|
4 |
Representations
and Warranties
|
The
Borrower represents and warrants to each of the Finance Parties at
the
Execution Date and (by reference to the facts and circumstances then
pertaining) at the date of each Drawdown Notice, at each Advance
Date and
at each Interest Payment Date as follows (except that the representation
and warranty contained at Clause 4.16 shall only be made on the first
Advance Date and that the representation and warranty contained at
Clause
4.9 shall only be made on the Execution Date)
:-
|
4.1
|
Incorporation
and capacity
Each
of the Security Parties is a body corporate duly constituted, organised
and validly existing and (where applicable) in good standing under
the law
of its country of incorporation, in each case with perpetual
corporate existence and the power to sue and be sued, to own its
assets
and to carry on its business, and all of the corporate shareholders
(if
any) of each Security Party are duly constituted and existing under
the
laws of their countries of incorporation with perpetual corporate
existence and the power to sue and be sued, to own their assets and
to
carry on their business and are acting on their own
account.
|
4.2
|
Solvency
None
of the Security Parties is insolvent or in liquidation or administration
or subject to any other insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous
officer has been appointed in respect of any of the Security Parties.
For
this purpose a Security Party will be deemed insolvent if it is unable
to
pay its debts within the meaning of S.123 of the Insolvency Act 1986
or,
as the case may be, the Spanish Insolvency Act,
22/2003.
|
4.3
|
Binding
obligations
The
Security Documents when duly executed and delivered will constitute
the
legal, valid and binding obligations of the Security Parties enforceable
in accordance with their respective terms subject to applicable laws
regarding creditors' rights in
general.
|
4.4
|
Satisfaction
of conditions
All
acts, conditions and things required to be done and satisfied and
to have
happened prior to the execution and delivery of the Security Documents
in
order to constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their respective
terms have been done, satisfied and have happened in compliance with
all
applicable laws.
|
4.5
|
Registrations
and consents
With
the exception only of the registrations referred to in Clauses 3.2.2
and
registration in Spain of the relevant Security Documents all (if
any)
consents, licences, approvals and authorisations of, or registrations
with
or declarations to, any governmental authority, bureau or agency
which may
be required in connection with the execution, delivery, performance,
validity or enforceability of the Security Documents have been obtained
or
made and remain in full force and effect and the Borrower is not
aware of
any event or circumstance which could reasonably be expected adversely
to
affect the right of any of the Security Parties to hold and/or obtain
renewal of any such consents, licences, approvals or
authorisations.
|
4.6
|
Disclosure
of material facts
The
Borrower is not aware of any material facts or circumstances which
have
not been disclosed to the Agent and which might, if disclosed, have
reasonably been expected to adversely affect the decision of a person
considering whether or not to make loan facilities of the nature
contemplated by this Agreement available to the
Borrower.
|
4.7
|
No
material litigation
Except
for those matters disclosed in writing to the Agent, there is no
action,
suit, arbitration or administrative proceeding nor any contemplated
action, suit, arbitration or administrative proceeding pending or
to its
knowledge about to be pursued before any court, tribunal or governmental
or other authority which is not covered by adequate insurance which
would,
or would be likely to, have a materially adverse effect on the business
or
financial condition of the Borrower Group taken as a
whole.
|
4.8
|
No
breach of law or contract
The
execution, delivery and performance of the Security Documents will
not
contravene any contractual restriction or any law binding on any
of the
Security Parties or on any shareholder (whether legal or beneficial)
of
any of the Security Parties, or the constitutional documents of any
of the
Security Parties, nor result in the creation of, nor oblige any of
the
Security Parties to create, any Encumbrance over all or any of its
assets,
with the exception of the Encumbrances created by or pursuant to
the
Security Documents.
|
4.9
|
No
deductions
Except as disclosed to the Agent in writing, that to the best of
their
knowledge belief and without undue enquiry, none of the Security
Parties
is required to make any deduction or withholding from any payment
which it
may be obliged to make to any of the Finance Parties under or pursuant
to
the Security Documents.
|
4.10
|
Use
of Facility
The Facility will be used to refinance the Existing Indebtedness
and
thereafter for the general corporate purposes of the Borrower
Group.
|
4.11
|
Material
Adverse Change
Since the publication of the Borrower's Accounts for the year ended
31
December 2005 there has been no change in the business, assets, operations
or condition (financial or otherwise) of the Borrower Group taken
as a
whole which has had a Material Adverse
Effect.
|
4.12
|
No
default
None of the Security Parties is in default of its obligations under
any
other financing documents to which it is a party to an extent or
in a
manner which might have a Material Adverse Effect on the business
or
condition (financial or otherwise) of the Borrower Group taken as
a whole
and no Event of Default is continuing or might reasonably be expected
to
result from the advance of any
Drawing.
|
4.13
|
Pari
passu ranking
The payment obligations of each of the Security Parties under the
Security
Documents to which it is a party rank at least pari passu with the
claims
of all its other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by law applying to companies
incorporated in the relevant Security Party's country of incorporation
or
otherwise applicable to that Security
Party.
|
4.14
|
No
Immunity
In
any proceedings taken in any of the Security Parties' respective
jurisdictions of incorporation in relation to any of the Security
Documents, none of the Security Parties will be entitled to claim
for
itself or any of its assets immunity from suit, execution, attachment
or
other legal process.
|
4.15
|
Governing
Law and Judgments
In
any proceedings taken in any of the Security Parties' jurisdiction
of
incorporation or organisation in relation to any of the Security
Documents
in which there is an express choice of the law, the submission to
that
jurisdiction of a particular country as the governing law thereof,
that
choice of law and any judgment or (if applicable) arbitral award
obtained
in that country will be recognised and
enforced.
|
4.16
|
Validity
and Admissibility in Evidence
As
at the date hereof, all acts, conditions and things required to be
done,
fulfilled and performed in order (a) to enable each of the Security
Parties lawfully to enter into, exercise its rights under and perform
and
comply with the obligations expressed to be assumed by it in the
Security
Documents, (b) to ensure that the obligations expressed to be assumed
by
each of the Security Parties in the Security Documents are legal,
valid
and binding and (c) to make the Security Documents admissible in
evidence
in the jurisdictions of incorporation or organization of each of
the
Security Parties, have been done, fulfilled and
performed.
|
4.17
|
No
Filing or Stamp Taxes
Under
the laws of the Security Parties' respective jurisdictions of
incorporation or organisation in force at the date hereof, it is
not
necessary that any of the Security Documents be filed, recorded or
enrolled with any court or other authority in its jurisdiction of
incorporation or organisation (other than the Registrar of Companies
for
England and Wales or the relevant maritime registry, to the extent
applicable) or that any stamp, registration or similar tax be paid
on or
in relation to any of the Security
Documents.
|
4.18
|
Borrower's
Accounts
The
Borrower's Accounts for the year ending 31 December 2005 and all
other annual financial statements relating to the Borrower required
to be
delivered under Clause 10.2.18 of this Agreement, were each prepared
in
accordance with GAAP, give (in conjunction with the notes thereto)
a true
and fair view of (in the case of annual financial statements) or
fairly
represent (in the case of quarterly accounts) the financial condition
of
the Borrower Group at the date as of which they were prepared and
the
results of the Borrower Group’s operations during the financial period
then ended.
|
4.19
|
Ownership
and Security
|
4.19.1
|
(i)
The
Corporate Guarantor owns (directly or indirectly) a majority of the
shares
in the Owners;
|
|
(ii)
the
Borrower owns (directly or indirectly) a majority of the shares in
the
Corporate Guarantor;
and
|
|
(iii)
Teekay
Shipping Corporation owns (directly or indirectly) a majority of
the
limited liability company interests in the General
Partner.
|
4.19.2
|
Each
of the Security Parties is the legal and beneficial owner of all
assets
and other property which it purports to charge, mortgage, pledge,
assign
or otherwise secure pursuant to each Security Document and those
Security
Documents to which it is a party create and give rise to valid and
effective Security having the ranking expressed in those Security
Documents.
|
4.20
|
Money
Laundering
Any
amount borrowed hereunder, and the performance of the obligations
of the
Security Parties under the Security Documents, will be for the account
of
members of the Borrower Group and will not involve any breach by
any of
them of any law or regulatory measure relating to "money laundering"
as
defined in Article 1 of the Directive (91/308/EEC) of the Council
of the
European Communities.
|
4.21
|
Adverse
consequences
To
the best of the Borrower's knowledge the execution, delivery and
subsequent performance by each of the Security Parties and Finance
Parties
of the Security Documents will not have any adverse consequences
for the
Finance Parties.
|
4.22
|
Representations
Limited
The representation and warranties of the Borrower in this Clause
4 are
subject to:
|
4.22.1
|
the
principle that equitable remedies are remedies which may be granted
or
refused at the discretion of the
court;
|
4.22.2
|
the
limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, administration
and
other laws generally affecting or limiting the rights of
creditors;
|
4.22.3
|
the
time barring of claims under any applicable limitation
acts;
|
4.22.4
|
the
possibility that a court may strike out provisions for a contract
as being
invalid for reasons of oppression, undue influence or similar;
and
|
4.22.5
|
any
other reservations or qualifications of law expressed in any legal
opinions obtained by the Agent in connection with the
Facility.
|
5 |
Repayment
and
Prepayment
|
5.1
|
Repayment
Each
Drawing shall be repaid by the Borrower to the Agent on behalf of
the
Banks on the last day of its Interest Period unless the Borrower
selects a
further Interest Period for that Drawing in accordance with Clause
6,
provided that the Borrower shall not be permitted to select such
further
Interest Period if an Event of Default or Potential Event of Default
has
occurred and shall then be obliged to repay such Drawing on the last
day
of its then current Interest Period. The Borrower shall on the Termination
Date repay to the Agent as agent for the Banks all Facility Outstandings.
The Borrower will cause the aggregate outstanding principal balance
of
Distribution Drawings to be zero for a period of at least fifteen
(15)
consecutive Business Days during any twelve (12) month
period.
|
5.2
|
Prepayment
The
Borrower
may prepay the Facility Outstandings in whole or in part in integral
multiples of one million Dollars ($1,000,000) (or as otherwise may
be
agreed by the Agent), each such prepayment to be of a minimum amount
of
five million Dollars ($5,000,000) on the last day of an Interest
Period,
provided that it has first given to the Agent not fewer than five
(5) days
prior written notice expiring on the last day of an Interest Period
of its
intention to do so. Any notice pursuant to this Clause 5.2 once given
shall be irrevocable and shall oblige the Borrower to make the prepayment
referred to in the notice on the last day of the Interest Period
specified
in the notice, together with all interest accrued on the amount prepaid
up
to and including that last day of the Interest Period in
question.
|
5.3
|
Mandatory
Prepayment
If
at any time the Facility Outstandings shall exceed the Maximum Facility
Amount the Borrower shall immediately prepay to the Agent on behalf
of the
Banks such amounts as will ensure that the Facility Outstandings
do not
exceed the Maximum Facility Amount and shall pay to the Banks all
interest
accrued on the amount prepaid up to and including the date on which
such
prepayment occurred.
|
5.4
|
Prepayment
indemnity
If
the Borrower shall make a prepayment on a Business Day other than
the last
day of an Interest Period, it shall pay to the Agent on behalf of
the
Banks such amount which is necessary to compensate the Banks for
any Break
Costs incurred by the Agent or any of the Banks as a result of the
prepayment in question.
|
5.5
|
Application
of prepayments
Any
prepayment by the Borrower in an amount less than the Indebtedness
shall
be applied in satisfaction or reduction first of any costs and other
expenses outstanding; secondly of all interest accrued with respect
to the
outstanding Drawings; and thirdly of the outstanding
Drawings.
|
5.6
|
Reborrowing
of prepayments
Any
amount prepaid pursuant to this Agreement may be reborrowed in accordance
with Clause 2.2.
|
6 |
Interest
|
6.1
|
Interest
Periods
The period during which any Drawing shall be outstanding pursuant
to this
Agreement shall be divided into consecutive Interest Periods of one,
three, six or twelve months' duration, as selected by the Borrower
by
written notice to the Agent not later than 3:00 p.m. on the fourth
Business Day before the beginning of the Interest Period in question,
or
such other duration as may be agreed by the Banks in their discretion.
No
more than three one (1) month Interest Periods may be selected by
the
Borrower in each twelve (12) month period during the Facility
Period.
|
6.2
|
Beginning
and end of Interest Periods
The
first Interest Period in respect of each Drawing shall begin on the
Advance Date of that Drawing and shall end on the last day of the
Interest
Period selected in accordance with Clause 6.1. Any subsequent Interest
Period selected in respect of each Drawing shall commence on the
day
following the last day of its previous Interest Period and shall
end on
the last day of its current Interest Period selected in accordance
with
Clause 6.1. However, in respect of any Drawings outstanding on the
Termination Date, the Interest Period applicable to such Drawings
shall
end on the Termination Date.
|
6.3
|
Interest
rate
During each Interest Period, interest shall accrue on each Drawing
at the
rate determined by the Agent to be the aggregate of (a) the Margin
(b)
LIBOR and (c), if applicable, the Mandatory Cost determined at or
about
11.00 a.m. (London time) on the second Business Day prior to the
beginning
of the Interest Period relating to that Drawing.
|
6.4
|
Accrual
and payment of interest
During
the Facility Period,
interest
shall accrue from day to day, shall be calculated on the basis of
a 360
day year and the actual number of days elapsed (or, in any circumstance
where market practice differs, in accordance with the prevailing
market
practice) and shall be paid by the Borrower to the Agent on behalf
of the
Banks on the last day of each Interest Period and additionally, during
any
Interest Period exceeding three months, on the last day of each
successive three month period after the beginning of that Interest
Period.
|
6.5
|
Ending
of Interest Periods
If
any Interest Period would end on a day which is not a Business Day,
that
Interest Period shall end on the next succeeding Business Day (unless
the
next succeeding Business Day falls in the next calendar month, in
which
event the Interest Period in question shall end on the immediately
preceding Business Day).
|
6.6
|
Default
Rate
If
an Event of Default shall occur, the whole of the Indebtedness shall,
from
the date of the occurrence of the Event of Default, bear interest
up to
the date of actual payment (both before and after judgment) at the
Default
Rate, compounded at such intervals as the Agent shall in its reasonable
discretion determine, which interest shall be payable from time to
time by
the Borrower to the Agent on behalf of the Banks on
demand.
|
6.7
|
Determinations
conclusive
Each
determination of an interest rate made by the Agent in accordance
with
Clause 6 shall (save in the case of manifest error or on any question
of law) be final and conclusive.
|
7 |
Fees
|
7.1
|
The
Borrower shall pay to the Agent for distribution to the Banks Commitment
Commission at the rate of seventeen point five basis points (17.5bps)
per
annum on any undrawn and uncancelled part of the Facility. The Commitment
Commission will accrue from day to day on the basis of a 360 day
year and
the actual number of days elapsed and shall be paid quarterly in
arrears
from the Execution Date until the Commitment Termination Date with
a pro
rata payment being due and payable on the Commitment Termination
Date.
|
7.2
|
The
Borrower shall pay to the Agent the fees detailed in a fee letter
dated on
or about the date hereof made between the Borrower and the
Agent.
|
8 |
Security
Documents
|
8.1
|
As
security for the repayment of the Indebtedness, the Borrower will
execute
and deliver to the Agent or cause to be executed and delivered to
the
Agent, on or before the first Advance Date, the following Security
Documents in such forms and containing such terms and conditions
as the
Agent requires:-
|
8.1.1
|
the
Owners Guarantee
the joint and several guarantee and indemnity of each of the Owners
in
respect of the Borrower's
Obligations;
|
8.1.2
|
the
Corporate Guarantee
the
guarantee and indemnity of the Corporate Guarantor in respect of
the
Borrower's Obligations;
|
8.1.3
|
Shares
Charges
a
pledge of the shares of each of the Owners entered into by the Pledgor
in
favour of the Banks;
|
8.1.4
|
the
Assignments
deeds of assignment of the Earnings, Insurances, Requisition Compensation
and Charter Rights executed by the Owners as security for the Owners
Guarantee;
|
8.1.5
|
the
Mortgages
the first priority statutory ship mortgages over each of the Vessels
executed by the relevant Owner and the Borrower in favour of the
Banks as
security for the Owners Guarantee.
|
9 |
Agency
and Trust
|
9.1
|
Appointment
Each
of the Finance Parties appoints the Agent its agent for the purpose
of
administering the Facility and the Security Documents and authorises
the
Agent and its directors, officers, employees and agents acting on
the
instructions from time to time of the Majority Banks, and subject
to
Clauses 9.4 and 9.19, to execute the Security Documents (other than
the
Mortgages and the Shares Charges) on its behalf and to exercise all
rights, powers, discretions and remedies vested in the Banks under
or
pursuant to the Security Documents, together with all powers reasonably
incidental to them.
|
9.2
|
Authority
Each
of the Finance Parties irrevocably authorises the Agent, acting on
the
instructions from time to time of the Majority Banks (save where
the terms
of any Security Document expressly require the instructions of all
of the
Banks):-
|
9.2.1
|
to
give or withhold any consents or approvals; and
|
9.2.2
|
to
exercise, or refrain from exercising, any discretions; and
|
9.2.3
|
to
collect, receive, release or pay any
money;
|
|
under
or pursuant to any of the Security Documents. The Agent shall have
no
duties or responsibilities as agent or as security trustee other
than
those expressly conferred on it by the Security Documents and shall
not be
obliged to act on any instructions if to do so would, in the opinion
of
the Agent, be contrary to any provision of the Security Documents
or to
any law, or would expose the Agent to any actual or potential liability
to
any third party.
|
9.3
|
Trust
The
Agent agrees and declares, and each of the Banks acknowledges, that,
subject to the terms and conditions of this Clause, the Agent holds
the
Trust Property on trust absolutely for (i) the Banks, in accordance
with
their respective Proportionate Shares, and (ii) any Future Swap Provider
provided that such Future Swap Provider enters into a Subordination
Agreement. Each of the Finance Parties agrees that the obligations,
rights
and benefits vested in the Agent in its capacity as security trustee
shall
be performed and exercised in accordance with this Clause. The Agent
in
its capacity as security trustee shall have the benefit of all of
the
provisions of this Agreement benefiting it in its capacity as agent
for
the Finance Parties, and all the powers and discretions conferred
on
trustees by the Trustee Act 1925 (to the extent not inconsistent
with this
Agreement). In addition:-
|
9.3.1
|
the
Agent (and any attorney, agent or delegate of the Agent) may indemnify
itself or himself out of the Trust Property against all liabilities,
costs, fees, damages, charges, losses and expenses sustained or incurred
by it or him in relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported exercise
of the
rights, trusts, powers and discretions vested in the Agent or any
other
such person by or pursuant to the Security Documents or in respect
of
anything else done or omitted to be done in any way relating to the
Security Documents other than as a result of its gross negligence
or
wilful misconduct; and
|
9.3.2
|
the
Finance Parties acknowledge that the Agent shall be under no obligation
to
insure any property nor to require any other person to insure any
property
and shall not be responsible for any loss which may be suffered by
any
person as a result of the lack or insufficiency of any insurance;
and
|
9.3.3
|
the
Agent and the Finance Parties agree that the perpetuity period applicable
to the trusts declared by this Agreement shall be the period of eighty
years from the Execution Date.
|
9.4
|
Limitations
on authority
Except
with the prior written consent of each of the Banks, the Agent shall
not
be entitled to :-
|
9.4.1
|
release
or vary any security given for the Borrower's obligations under this
Agreement; nor
|
9.4.2
|
agree
to waive the payment of any sum of money payable by any of the Security
Parties under the Security Documents;
nor
|
9.4.3
|
change
the meaning of the expression "
Majority
Banks
";
nor
|
9.4.4
|
exercise,
or refrain from exercising, any discretion, or give or withhold any
consent, the exercise or giving of which is, by the terms of this
Agreement, expressly reserved to the Banks;
nor
|
9.4.5
|
extend
the due date for the payment of any sum of money payable by any of
the
Security Parties under the Security Documents;
nor
|
9.4.6
|
take
or refrain from taking any step if the effect of such action or inaction
may lead to the increase of the obligations of a Bank under any of
the
Security Documents; nor
|
9.4.7
|
agree
to change the currency in which any sum is payable under the Security
Documents; nor
|
9.4.8
|
agree
to amend this Clause 9.4; nor
|
9.4.9
|
agree
to reduce the rate under the definitions of "
Margin
"
"
Commitment
Commission
"
or "
Default
Rate
".
|
9.5
|
Liability
Neither
the Agent nor any of its directors, officers, employees or agents
shall be
liable to any of the other Finance Parties for anything done or omitted
to
be done by the Agent under or in connection with the Security Documents
unless as a result of the Agent's wilful misconduct or gross
negligence.
|
9.6
|
Acknowledgement
Each
of the Finance Parties (other than the Agent) acknowledges that:-
|
9.6.1
|
it
has not relied on any representation made by the Agent or any of
the
Agent's directors, officers, employees or agents or by any other
person
acting or purporting to act on behalf of the Agent to induce it to
enter
into any of the Security Documents;
|
9.6.2
|
it
has made and will continue to make without reliance on the Agent,
and
based on such documents and other evidence as it considers appropriate,
its own independent investigation of the financial condition and
affairs
of the Security Parties in connection with the making and continuation
of
the Facility;
|
9.6.3
|
it
has made its own appraisal of the creditworthiness of the Security
Parties;
|
9.6.4
|
the
Agent shall not have any duty or responsibility at any time to provide
it
with any credit or other information relating to any of the Security
Parties unless that information is received by the Agent pursuant
to the
express terms of the Security Documents.
|
|
Each
of the Finance Parties (other than the Agent) agrees that it will
not
assert nor seek to assert against any director, officer, employee
or agent
of the Agent or against any other person acting or purporting to
act on
behalf of the Agent any claim which it might have against them in
respect
of any of the matters referred to in this
Clause.
|
9.7
|
Limitations
on responsibility
The
Agent shall have no responsibility to any of the Security Parties
or to
any of the other Finance Parties on account of:-
|
9.7.1
|
the
failure of any of the Finance Parties or of any of the Security Parties
to
perform any of their respective obligations under the Security Documents;
|
9.7.2
|
the
financial condition of any of the Security Parties;
|
9.7.3
|
the
completeness or accuracy of any statements, representations or warranties
made in or pursuant to any of the Security Documents, or in or pursuant
to
any document delivered pursuant to or in connection with any of the
Security Documents;
|
9.7.4
|
the
negotiation, execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of any of
the
Security Documents or of any document executed or delivered pursuant
to or
in connection with any of the Security
Documents.
|
9.8
|
The
Agent's rights
The
Agent may:-
|
9.8.1
|
assume
that all representations or warranties made or deemed repeated by
any of
the Security Parties in or pursuant to any of the Security Documents
are
true and complete, unless, in its capacity as the Agent, it has acquired
actual knowledge to the contrary;
and
|
9.8.2
|
assume
that no Event of Default or Potential Event of Default has occurred
unless, in its capacity as the Agent, it has acquired actual knowledge
to
the contrary; and
|
9.8.3
|
rely
on any document or Communication believed by it to be genuine;
and
|
9.8.4
|
rely
as to legal or other professional matters on opinions and statements
of
any legal or other professional advisers selected or approved by
it;
and
|
9.8.5
|
rely
as to any factual matters which might reasonably be expected to be
within
the knowledge of any of the Security Parties on a certificate signed
by or
on behalf of that Security Party;
and
|
9.8.6
|
refrain
from exercising any right, power, discretion or remedy unless and
until
instructed to exercise that right, power, discretion or remedy and
as to
the manner of its exercise by the Banks (or, where applicable, by
the
Majority Banks) and unless and until the Agent has received from
the Banks
any payment which the Agent may require on account of, or any security
which the Agent may require for, any costs, claims, expenses (including
legal and other professional fees) and liabilities which it considers
it
may incur or sustain in complying with those
instructions.
|
9.9
|
The
Agent's duties
The
Agent shall:-
|
9.9.1
|
if
requested in writing to do so by a Bank, make enquiry and advise
the Banks
as to the performance or observance of any of the provisions of the
Security Documents by any of the Security Parties or as to the existence
of an Event of Default; and
|
9.9.2
|
inform
the Banks promptly of any Event of Default of which the Agent has
actual
knowledge.
|
9.10
|
No
deemed knowledge
The
Agent shall not be deemed to have actual knowledge of the falsehood
or
incompleteness of any representation or warranty made or deemed repeated
by any of the Security Parties or actual knowledge of the occurrence
of
any Event of Default or Potential Event of Default unless a Bank
or any of
the Security Parties shall have given written notice thereof to the
Agent.
|
9.11
|
Other
business
The
Agent may, without any liability to account to the Banks, generally
engage
in any kind of banking or trust business with any of the Security
Parties
or any of their respective Subsidiaries or associated companies or
with a
Bank as if it were not the Agent.
|
9.12
|
Indemnity
The
Banks shall, promptly on the Agent's request, reimburse the Agent
in their
respective Proportionate Shares, for, and keep the Agent fully indemnified
in respect of:-
|
9.12.1
|
all
amounts payable by the Borrower to the Agent pursuant to Clause 17
(other
than under Clauses 17.3 and 17.4) to the extent that those amounts
are not
paid by the Borrower;
|
9.12.2
|
all
liabilities, damages, costs and claims sustained or incurred by the
Agent
in connection with the Security Documents, or the performance of
its
duties and obligations, or the exercise of its rights, powers, discretions
or remedies under or pursuant to any of the Security Documents; or
in
connection with any action taken or omitted by the Agent under or
pursuant
to any of the Security Documents, unless in any case those liabilities,
damages, costs or claims arise solely from the Agent's wilful misconduct
or gross negligence.
|
9.13
|
Employment
of agents
In
performing its duties and exercising its rights, powers, discretions
and
remedies under or pursuant to the Security Documents, the Agent shall
be
entitled to employ and pay agents to do anything which the Agent
is
empowered to do under or pursuant to the Security Documents (including
the
receipt of money and documents and the payment of money) and to act
or
refrain from taking action in reliance on the opinion of, or advice
or
information obtained from, any lawyer, banker, broker, accountant,
valuer
or any other person believed by the Agent in good faith to be competent
to
give such opinion, advice or
information.
|
9.14
|
Distribution
of payments
The
Agent shall pay promptly to the order of each of the Banks that Bank's
Proportionate Share and provided that a Future Swap Provider had
entered
into a Subordination Agreement to a Future Swap Provider its share
of
every sum of money received by the Agent pursuant to the Security
Documents (with the exception of any amounts payable pursuant to
Clause 7
and any amounts which, by the terms of the Security Documents, are
paid to
the Agent for the account of the Agent alone or specifically for
the
account of one or more of the Finance Parties) and until so paid
such
amount shall be held by the Agent on trust absolutely for that Finance
Party.
|
9.15
|
Reimbursement
The
Agent shall have no liability to pay any sum to another Party until
it has
itself received payment of that sum. If, however, the Agent does
pay any
sum to a Party on account of any amount prospectively due to it pursuant
to Clause 9.14 or otherwise before it has itself received payment of
that amount, and the Agent does not in fact receive payment within
five
Business Days after the date on which that payment was required to
be made
by the terms of the Security Documents, the recipient will, on demand
by
the Agent, refund to the Agent an amount equal to the amount received
by
it, together with an amount sufficient to reimburse the Agent for
the cost
of money for funding the amount in question during the period beginning
on
the date on which that amount was required to be paid by the terms
of the
Security Documents and ending on the date on which the Agent receives
reimbursement.
|
9.16
|
Redistribution
of payments
Unless
otherwise agreed between the Finance Parties, if at any time a Finance
Party receives or recovers by way of set-off, the exercise of any
lien or
otherwise other than from any assignee or transferee of or sub-participant
in that Bank's Commitment, an amount greater than that Bank's
Proportionate Share of any sum due from any of the Security Parties
under
the Security Documents or in the case of a Future Swap Provider (provided
that such Future Swap Provider has entered into a Subordination Agreement)
an amount greater than the amount outstanding and due to any Future
Swap
Provider under a Master Agreement (the amount of the excess being
referred
to in this Clause as the "
Excess
Amount
")
then:-
|
9.16.1
|
that
Finance Party shall promptly notify the Agent (which shall promptly
notify
each other Finance Party);
|
9.16.2
|
that
Finance Party shall pay to the Agent an amount equal to the Excess
Amount
within ten days of its receipt or recovery of the Excess Amount;
and
|
9.16.3
|
the
Agent shall treat that payment as if it were a payment by the Security
Party in question on account of the sum owed to the Finance Parties
as
aforesaid and shall account to the Finance Parties in respect of
the
Excess Amount in accordance with the provisions of this
Clause.
|
|
However,
if a Finance Party has commenced any Proceedings to recover sums
owing to
it under the Security Documents and, as a result of, or in connection
with, those Proceedings has received an Excess Amount, the Agent
shall not
distribute any of that Excess Amount to any other Finance Party which
had
been notified of the Proceedings and had the legal right to, but
did not,
join those Proceedings or commence and diligently prosecute separate
Proceedings to enforce its rights in the same or another
court.
|
9.17
|
Rescission
of Excess Amount
If
all or any part of any Excess Amount is rescinded or must otherwise
be
restored to any of the Security Parties or to any other third party,
the
Finance Parties which have received any part of that Excess Amount
by way
of distribution from the Agent pursuant to Clause 9.16 shall repay
to the
Agent for the account of the Finance Party which originally received
or
recovered the Excess Amount, the amount which shall be necessary
to ensure
that (i) all of the Banks share rateably in accordance with their
Proportionate Shares and (ii) subject to any Subordination Agreement
each
Future Swap Provider shares in the amount of the receipt or payment
retained, together with interest on that amount at a rate equivalent
to
that (if any) paid by the Finance Party receiving or recovering the
Excess
Amount to the person to whom that Finance Party is liable to make
payment
in respect of such amount, and Clause 9.16.3 shall apply only to
the
retained amount.
|
9.18
|
Proceedings
Each
of the Finance Parties shall notify one another of the proposed
commencement of any Proceedings under any of the Security Documents
prior
to their commencement. No such Proceedings may be commenced without
the
prior written consent of the Majority
Banks.
|
9.19
|
Instructions
Where
the Agent is authorised or directed to act or refrain from acting
in
accordance with the instructions of the Banks, or of the Majority
Banks
where applicable, each of the Banks shall provide the Agent with
instructions within seven Business Days of the Agent's written request
or
such shorter period as the Agent may reasonably specify. If a Bank
does
not provide the Agent with instructions within that period, (i) that
Bank
shall be bound by the decision of the Agent, (ii) that Bank shall
have no
vote for the purposes of this Clause and (iii) the combined Proportionate
Shares of the other Banks who provided such instructions shall be
deemed
to contribute 100%. Nothing in this Clause shall limit the right
of the
Agent to take, or refrain from taking, any action without obtaining
the
instructions of the Banks if the Agent in its discretion considers
it
necessary or appropriate to take, or refrain from taking, such action
in
order to preserve the rights of the Banks under or in connection
with the
Security Documents. In that event, the Agent will notify the Banks
of the
action taken by it as soon as reasonably practicable, and the Banks
agree
to ratify any action taken by the Agent pursuant to this
Clause.
|
9.20
|
Communications
Any
Communication under this Clause shall be given, delivered, made or
served,
in the case of the Agent (in its capacity as Agent or as one of the
Banks), and in the case of the other Finance Parties, at the address
indicated in Schedule 1 or such other addresses as shall be duly
notified
in writing to the Agent on behalf of the
Banks.
|
9.21
|
Payments
All amounts payable to a Finance Party under this Clause shall be
paid to
such account at such bank as that Finance Party may from time to
time
direct in writing to the Agent.
|
9.22
|
Retirement
Subject
to a successor being appointed in accordance with this Clause, the
Agent
may retire as agent and/or security trustee at any time without assigning
any reason by giving to the Borrower and the other Finance Parties
notice
of its intention to do so, in which event the following shall apply:-
|
9.22.1
|
with
the consent of the Borrower, not to be unreasonably withheld, the
other
Finance Parties may within thirty days after the date of the Agent's
notice appoint a successor to act as agent and/or security trustee
or, if
they fail to do so with the consent of the Borrower, not to be
unreasonably withheld, the Agent may appoint any other bank or financial
institution as its successor;
|
9.22.2
|
the
resignation of the Agent shall take effect simultaneously with the
appointment of its successor on written notice of that appointment
being
given to the Borrower and the other Finance Parties;
|
9.22.3
|
the
Agent shall thereupon be discharged from all further obligations
as agent
and/or security trustee but shall remain entitled to the benefit
of the
provisions of this Clause;
|
9.22.4
|
the
Agent's successor and each of the other parties to this Agreement
shall
have the same rights and obligations amongst themselves as they would
have
had if that successor had been a party to this
Agreement.
|
9.23
|
No
fiduciary relationship
Except
as provided in Clauses 9.3 and 9.14, the Agent shall not have any
fiduciary relationship with or be deemed to be a trustee of or for
any
other Finance Party and nothing contained in any of the Security
Documents
shall constitute a partnership between any two or more Banks or between
the Agent and any other Finance
Party.
|
9.24
|
The
Agent as a Bank
The
expression "
the
Banks
"
when used in the Security Documents includes the Agent in its capacity
as
one of the Banks. The Agent shall be entitled to exercise its rights,
powers, discretions and remedies under or pursuant to the Security
Documents in its capacity as one of the Banks in the same manner
as any
other Bank and as if it were not also the
Agent.
|
9.25
|
The
Agent as security trustee
Unless the context otherwise requires, the expression "
the
Agent
"
when used in the Security Documents includes the Agent acting in
its
capacities both as agent and security
trustee.
|
9.26
|
Notwithstanding
the provisions of Clauses 9.1 and 9.2 the Agent shall not carry out
any
action or execute any document on behalf of the Banks pursuant to
its
rights and powers under the Security Documents until such time as
the
Majority Banks have authorised it to do so and each Bank has
either:
|
(i)
|
authorised
the Agent to take such action or execute such document on its behalf
or
|
(ii)
|
taken
such action as is necessary to execute any such document.
|
|
Each
of the Banks undertakes to the Agent that it will either grant such
authority or execute such documents within three (3) Business Days
of the
Agent notifying the Banks that the Majority Banks have given such
authority to the Agent. If such authorisation or execution have not
been
carried out within such three (3) Banking Days period the Agent shall
be
entitled to carry out any action or execute any document on behalf
of
those of the Banks that have complied with the provisions of (i)
or (ii)
above only, pursuant to its rights and powers under the Security
Documents. For the avoidance of doubt as between the Borrower, the
Agent
and the Banks the Borrower shall not be concerned with the Agent's
authority to act under the provisions of this Clause
9
|
10 |
Covenants
|
10.1
|
Negative
covenants
|
10.1.1
|
no
third party rights
without
the Majority Banks' prior written consent, create or permit to arise
or
continue and procure that the Owners do not consent, create, or permit
to
arise or continue any Encumbrance on or over all or any part of the
Vessels or their Earnings or Insurances or the Charters except for
Permitted Liens; nor
|
10.1.2
|
no
other business
materially change the nature of its business as carried on at the
Execution Date and shall procure that there is no material change
in the
nature of the business of the Borrower Group as a whole from that
advised
to the Agent of the date of this Agreement;
nor
|
10.1.3
|
merger
or amalgamation
without the prior written consent of the Majority Banks, permit any
merger
or amalgamation, save with another member of the Borrower Group where
the
Borrower is to be the only surviving entity;
nor
|
10.1.4
|
no
change in management
permit anyone other than the Managers or a subsidiary of Teekay Shipping
Corporation, the Borrower or a Subsidiary of the Borrower to be appointed
as commercial or technical managers of the Vessels;
nor
|
10.1.5
|
no
dealings with a Master Agreement
assign, novate or encumber or in any other way transfer any of its
rights
or obligations under a Master
Agreement.
|
10.2
|
Positive
covenants
|
10.2.1
|
Other
information
The
Borrower will promptly supply to the Agent such information and
explanations as the Majority Banks may from time to time reasonably
require in connection with the operation of the
Vessels.
|
10.2.2
|
Notification
of Event of Default
The
Borrower will promptly upon becoming aware of the same notify the
Agent in
writing of the occurrence of any Event of Default and upon receipt
of a
written request to that effect from the Agent confirm to the Agent
that
save as previously notified to the Agent or as notified in such
confirmation no Event of Default has
occurred.
|
10.2.3
|
Pari
Passu
The Borrower shall ensure that its obligations under this Agreement
shall
at all times rank at least pari passu with all of its other present
and
future unsecured and unsubordinated indebtedness with the exception
of any
obligations which are mandatorily preferred by any applicable laws
to
companies generally and not by
contract.
|
10.2.4
|
Corporate
Existence
Save as permitted by Clause 10.1.3, the Borrower shall ensure that
throughout the Facility Period each of the Security Parties shall
(i)
remain duly formed and validly existing under the laws of its respective
jurisdiction of incorporation (ii) remain authorised to do business
in the
jurisdiction in which it transacts its business (iii) continue to
have the
power to carry on its business as it is now being conducted and to
enter
into and perform its obligations under the Security Documents to
which it
is a party and (iv) continue to comply with all applicable laws,
statutory, regulatory and other requirements relative to its business,
where a failure so to comply could reasonably be expected to have
a
Material Adverse Effect.
|
10.2.5
|
Registration
of Vessels
The Borrower undertakes to procure that the Owners shall maintain
the
registration of the Vessels under the flag indicated in Schedule
2 (or a
Pre-Approved Flag or such other flag as the Majority Banks may approve
in
writing) for the duration of the Facility Period.
|
10.2.6
|
Evidence
of current COFR
The Borrower will from time to time on the request of the Agent provide
the Agent with such evidence as the Agent may reasonably require
that each
Vessel has a valid and current Certificate of Financial Responsibility
pursuant to the United States Oil Pollution Act
1990.
|
10.2.7
|
ISM
Code compliance
The Borrower will and will procure that the relevant Owner
will:-
|
(a)
|
procure
that each of the Vessels remains for the duration of the Facility
Period
subject to a SMS;
|
(b)
|
maintain
a valid and current SMC for each of the Vessels throughout the Facility
Period;
|
(c)
|
procure
that each Company maintains a valid and current DOC throughout the
Facility Period;
|
(d)
|
immediately
notify the Agent in writing of any withdrawal, suspension, cancellation
or
modification of the SMC of any Vessel or of the DOC of any Company;
and
|
(e)
|
not
without the prior written consent of the Agent (which will not be
unreasonably withheld) change the identity of any Company to any
company
which is not a Subsidiary of either the Borrower or Teekay Shipping
Corporation.
|
10.2.8
|
ISPS
Code compliance
The Borrower will and will procure that the relevant Owner
will:-
|
(a)
|
procure
that each of the Vessels maintains for the duration of the Facility
Period
a valid International Ship Security
Certificate;
|
(b)
|
procure
that each of the Vessels' security system and associated security
equipment complies in all material respects with the applicable
requirements of Chapter XI-2 of SOLAS and Part A of the ISPS Code;
and
|
(c)
|
procure
that an approved ship security plan is in
place.
|
10.2.9
|
Classification
The Borrower shall procure that the Owners shall ensure that each
Vessel
maintains the highest classification required for the purpose of
the
relevant trade of such Vessel which shall be with a Pre-Approved
Classification Society or such other society as may be acceptable
to the
Agent, in each case, free from any overdue recommendations and conditions
affecting that Vessel’s
class.
|
10.2.10
|
Master
Agreements
The
Borrower or any of its Subsidiaries may enter into an ISDA Master
Agreement or similar arrangement for a notional amount not exceeding
the
Facility Outstandings as applicable from time to time and that ISDA
Master
Agreement may be designated by the Borrower as a Master Agreement
for the
purposes of this Facility and secured by the Security Documents provided
that the relevant Future Swap Provider enters into a Subordination
Agreement.
|
10.2.11
|
Compliance
with Applicable Laws
The Borrower shall comply with all applicable laws to which it may
be
subject if a failure to do the same may have a Material Adverse
Effect.
|
10.2.12
|
Inspection
of records
The Borrower will permit the inspection of its financial records
and
accounts on reasonable notice from time to time during business hours
by
the Agent or its nominee.
|
10.2.13
|
Information
re Charters
The Borrower will promptly notify the Agent
of:
|
(i)
|
any
termination, purported termination or threat by the Charterers to
terminate either of the Charters;
or
|
(ii)
|
any
circumstances where a Vessel is off-hire for a period in excess of
45
consecutive days; or
|
(iii)
|
any
failure of a Charterer to pay hire when due or within 10 Business
Days of
the due date; or
|
(iv)
|
if
a Charterer shall, on three (3) consecutive occasions, pay hire at
a rate
that represents a reduction of twenty five per centum (25%) or more
on the
full rate of hire.
|
10.2.14
|
Financial
covenants of the Borrower
Throughout the Facility Period the Borrower
shall:-
|
(i)
|
maintain
an aggregate to Free Liquidity and undrawn committed revolving credit
lines available to the Borrower and/or its Subsidiaries (excluding
undrawn
committed revolving credit lines with less than six (6) months to
maturity) of not less than thirty five million Dollars ($35,000,000);
and
|
(ii)
|
maintain
a Tangible Net Worth of at least four hundred million Dollars
($400,000,000).
|
10.2.15
|
Financial
statements
The
Borrower will (i) deliver to the Agent without request copies of
its
accounts for each financial period ending during the Facility Period,
containing (amongst other things) the Borrower's consolidated profit
and
loss account for, and balance sheet at the end of, each such financial
period, prepared in accordance with GAAP and, in the case of the
annual
financial statements, audited by a firm of chartered accountants
(or
equivalent) acceptable to the
Agent:
|
(a)
|
in
the case of annual financial statements within one hundred and twenty
(120) days of the end of the financial year to which they relate
together
with a compliance certificate in the form set out in Schedule 7;
and
|
(b)
|
in
the case of quarterly financial statements within ninety (90) days
of the
end of the financial quarter to which they relate
|
|
together
with a compliance certificate in the form set out in Schedule 7
and such
financial statements shall accurately and fairly represent the
financial
condition of the Borrower Group. Such financial statements may
be provided
in electronic form at the Borrower's
option.
|
10.2.16
|
Further
financial information
The Borrower shall provide such further financial or other information
as
the Agent may reasonably request.
|
10.2.17
|
Inspection
of Property
The Borrower will, after the occurrence and during the continuance
of an
Event of Default or a Potential Event of Default, permit the Agent
to
inspect any property owned by it on reasonable notice from the
Agent.
|
10.2.18
|
Notification
The Borrower will notify the Agent in writing of any Proceedings
brought
against it or its Subsidiaries where the same may, if adversely
determined, have a Material Adverse
Effect.
|
10.2.19
|
Environmental
Laws
The
Borrower shall ensure that the Owners comply in all material respects
with
any applicable Environmental Laws.
|
10.2.20
|
Borrower
Listing
The
Borrower shall remain listed on a recognised stock exchange throughout
the
Facility Period.
|
10.2.21
|
Insurances
The
Borrower shall procure that the Owners comply with the requirements
to
insure and maintain the Vessels set out in the respective Deeds of
Assignment.
|
10.2.22
|
Payment
of Taxes
The Borrower shall pay, or shall procure that the Owners shall pay,
all
Taxes and other obligations due in respect of the Vessels or the
Indebtedness.
|
11 |
Earnings
|
11.1
|
Remittance
of Earnings
Immediately
upon the occurrence of an Event of Default which is continued unremedied
or unwaived, the Borrower shall procure that all Earnings and any
Requisition Compensation are paid to the Earnings Account (to be
opened in
the joint names of the Owners with the Account Holder following the
occurrence of an Event of Default) or to such other account(s) as
the
Agent shall from time to time specify by notice in writing to the
Borrower.
|
11.2
|
Earnings
Account
The
Borrower shall procure that following the occurrence of an Event
of
Default which is continued unremedied or unwaived, the Owners shall
maintain the Earnings Account with the Earnings Account Holder for
the
duration of the remainder of the Facility Period free of Encumbrances
and
rights of set off other than those created by or under the Finance
Documents.
|
12 |
Events Of Default
|
12.1
|
The
Agent's rights
If
any of the events set out in Clause 12.2 occurs, the Agent may at
its
discretion (and, on the instructions of the Majority Banks,
will):
|
12.1.1
|
by
notice to the Borrower declare the Banks to be under no further obligation
to the Borrower under or pursuant to this Agreement and may (and,
on the
instructions of the Majority Banks, will) declare all or any part
of the
Indebtedness (including such unpaid interest as shall have accrued
and any
Break Costs incurred by the Finance Parties) to be immediately payable,
whereupon the Indebtedness (or the part of the Indebtedness referred
to in
the Agent's notice) shall immediately become due and payable without
any
further demand or notice of any kind;
and/or
|
12.1.2
|
declare
that any undrawn portion of the Facility shall be cancelled, whereupon
the
same shall be cancelled and the corresponding Commitment of each
Bank
shall be reduced to zero; and/or
|
12.1.3
|
exercise
any rights and remedies in existence or arising under the Security
Documents.
|
12.2
|
Events
of Default
The
events referred to in Clause 12.1
are:-
|
12.2.1
|
payment
default
if
|
(a)
|
the
Borrower defaults in the payment of any
part of the Indebtedness when due PROVIDED ALWAYS that if the Borrower
can
demonstrate to the reasonable satisfaction of the Agent that they
have
given all necessary instructions to effect payment and the non-receipt
thereof is attributable to an error in the banking system, such Event
of
Default shall only occur five (5) Business Days after such payment
fell
due; or
|
(b)
|
A
Security Party fails to pay any other amount due from it under a
Security
Document and such failure continues unremedied for five (5) Business
Days or, in the case of sums payable on demand, eight (8) Business
Days,
after such demand has been duly made on the relevant Security Party;
or
|
12.2.2
|
other
default
if
any of the Security Parties fails to observe or perform any of the
covenants, conditions, undertakings, agreements or obligations on
its part
contained in any of the Security Documents or shall in any other
way be in
breach of or do or cause to be done any act repudiating or evidencing
an
intention to repudiate any of the Security Documents and such default
(if
in the reasonable opinion of the Majority Banks capable of remedy)
is not
remedied within twenty one (21) days after notice of the default
has been
given to the Borrower
PROVIDED
ALWAYS
that any breach of (i) a financial covenant set out in Clause 10.2.17
or
(ii) the change of management covenant set out in Clause 10.1.4 shall
constitute an immediate Event of Default; or
|
12.2.3
|
misrepresentation
or breach of warranty
if
any representation, warranty or statement made, deemed to be made,
or
repeated under any of the Security Documents or in any accounts,
certificate, notice instrument, written statement or opinion delivered
by
a Security Party under or in connection with any Security Document
is
incorrect or misleading in any material respect when made, deemed
to be
made or repeated and gives rise to a Material Adverse Effect;
or
|
12.2.4
|
execution
if
a distress or execution or other process of a court or authority
is levied
on any of the property of any of the Security Parties before or after
final judgment or by order of any competent court or authority for
an
amount in excess of ten million Dollars ($10,000,000) (in the case
of the
Owners), twenty five million Dollars ($25,000,000) (in the case of
the
Corporate Guarantor) or fifty million Dollars ($50,000,000) (in the
case
of the Borrower) or its equivalent in any other currency and is not
satisfied or stayed (with a view to being contested in good faith)
within
thirty days of levy or any other applicable cure period (if longer);
or
|
12.2.5
|
insolvency
events
if
any of the Security Parties or their
Subsidiaries:-
|
(a)
|
resolves
to appoint, or applies for, or consents to the appointment of, a
receiver,
administrative receiver, trustee, administrator or liquidator of
itself or
of all or part of its assets other than for the purposes of a merger
or
amalgamation approved pursuant to Clause 10.1.3;
or
|
(b)
|
is
unable or admits its inability to pay its debts as they fall due;
or
|
(c)
|
makes
a general assignment for the benefit of creditors;
or
|
(d)
|
ceases
trading or threatens to cease trading;
or
|
(e)
|
has
appointed an Inspector under the Companies Act 1985 or any statutory
provision which the Agent in its discretion considers analogous thereto;
or
|
12.2.6
|
insolvency
proceedings
if
any proceedings are commenced or threatened, or any order or judgment
is
given by any court, for the bankruptcy, liquidation, winding up,
administration or re-organisation of any of the Security Parties
or a
Material Subsidiary or for the appointment of a receiver, administrative
receiver, administrator, liquidator or trustee of any of the Security
Parties or a Material Subsidiary or of all or any material part of
the
assets of any of the Security Parties or a Material Subsidiary or
if any
person appoints or purports to appoint such receiver, administrative
receiver, administrator, liquidator or trustee which proceeding is
not
discharged within thirty (30) days of its commencement;
or
|
12.2.7
|
impossibility
or illegality
unless
covered by Clause 15.7, if any event occurs which would, or would
with the
passage of time, render performance of any of the Security Documents
impossible, unlawful or unenforceable by the Banks or the Agent and
such
illegality is not remedied or mitigated to the satisfaction of the
Agent
within 30 days after it has given notice thereof to the relevant
Security
Party; or
|
12.2.8
|
conditions
subsequent
if
any of the conditions set out in Clause 3.2 is not satisfied within
the
time reasonably required by the Agent;
or
|
12.2.9
|
revocation
or modification of consents etc.
if
any material consent, licence, approval or authorisation which is
now or
which at any time during the Facility Period becomes necessary to
enable
any of the Security Parties to comply with any of their obligations
in or
pursuant to any of the Security Documents is revoked, withdrawn or
withheld, or modified in a manner which the Agent reasonably considers
is,
or may be, prejudicial to the interests of the Banks in a material
manner,
or any material consent, licence, approval or authorisation ceases
to
remain in full force and effect; or
|
12.2.10
|
curtailment
of business
if
the business of any of the Security Parties is wholly or materially
curtailed by any intervention by or under authority of any government,
or
if all or a substantial part of the undertaking, property or assets
of any
of the Security Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any government or
any
Security Party disposes or threatens to dispose of a substantial
part of
its business or assets; or
|
12.2.11
|
acceleration
of other indebtedness
if
any other indebtedness or obligation for borrowed money of any of
the
Security Parties becomes due prior to its stated maturity by reason
of
default on the part of that Security Party, or is not repaid or satisfied
on the due date for its repayment (or within any applicable grace
period)
or any such other loan, guarantee or indebtedness becomes enforceable
save
for amounts of less than ten million Dollars ($10,000,000) (in the
case of
the Owners), twenty five million Dollars ($25,000,000) (in the case
of the
Corporate Guarantor) or fifty million Dollars ($50,000,000) (in the
case
of the Borrower) in aggregate, or its equivalent in any other currency;
or
|
12.2.12
|
reduction
of capital
If
any of the Security Parties reduces its authorised or issued or subscribed
capital; or
|
12.2.13
|
challenge
to registration
if
the registration of any Vessel or any Mortgage becomes void or voidable
or
liable to cancellation or termination;
or
|
12.2.14
|
war
if
the country of registration of any Vessel becomes involved in war
(whether
or not declared) or civil war or is occupied by any other power and
the
Agent reasonably considers that, as a result, the security conferred
by
the Security Documents is materially prejudiced;
or
|
12.2.15
|
notice
of termination
if
the Corporate Guarantor gives notice to the Agent to determine its
obligations under its Corporate Guarantee or either Owner gives notice
to
the Agent to determine its obligations under the Owners Guarantee;
or
|
12.2.16
|
material
adverse change etc.
if
at any time there shall occur a change in the business or operations
of a
Security Party or a change in the financial condition of any Security
Party which, in the reasonable opinion of the Majority Banks, materially
impairs such Security Party's ability to discharge its obligations
under
the Security Documents to which it is a party in the manner provided
therein and such change, if capable of remedy, is not so remedied
within
15 Business Days of the delivery of a notice confirming such change
by the
Agent to the relevant Security Party; or
|
12.2.17
|
final
judgements
if
any of the Security Parties fails to comply with any non appealable
court
order or fails to pay a final unappealable judgment against it, in
either
case, in excess of ten million Dollars ($10,000,000) (in the case
of the
Owners), twenty five million Dollars ($25,000,000) in the case of
the
Corporate Guarantor or fifty million Dollars ($50,000,000) (in the
case of
the Borrower) which remains unsettled for fourteen (14) days;
or
|
12.2.18
|
loss
of stock market listing
if
the Borrower ceases to be listed on a recognised stock exchange;
or
|
12.2.19
|
similar
event
any
event occurs which, under the laws of any jurisdiction, has a similar
or
analogous effect to any of those events mentioned in Clauses 12.2.4,
12.2.5 and 12.2.6; or
|
12.2.20
|
environmental
matters
|
(a)
|
any
Environmental Claim is pending or made against an Owner or any of
the
Owner's Environmental Affiliates or in connection with a Vessel,
where
such Environmental Claim has a Material Adverse Effect;
|
(b)
|
any
actual Environmental Incident occurs in connection with a Vessel,
where
such Environmental Incident has a Material Adverse Effect;
or
|
12.2.21
|
repudiation
any Security Party repudiates any Security Document to which it is
a party
or does or causes to be done any act or thing evidencing an intention
to
repudiate any such Security Documents;
or
|
12.2.22
|
Change
of Control
a
Change of Control occurs in relation to any of the Owners, the Corporate
Guarantor or the General Partner;
or
|
12.2.23
|
termination
of a Charter
if
(a) either of the Owners is in material breach of the Charter relative
to
its Vessel such that a right of the Charterer to terminate or treat
as
repudiated that Charter has arisen or (b) either of the Charters
is
terminated by the Charterers (save where a Charterer has exercised
its
contractual rights to early termination under a Charter and made
any
corresponding payments); or
|
12.2.24
|
insurances
and class
if
the Owners fail to comply with the Insurance obligations outlined
in the
relevant Deed of Assignment or a Vessel has its classification withdrawn
by the relevant Classification Society PROVIDED THAT if such breach
is (in
the opinion of the Agent in its absolute discretion) capable of remedy
such Event of Default shall only occur if the breach is not remedied
to
the satisfaction of the Agent within twenty one (21)
days.
|
12.3
|
Events
of Default in the Mortgage
In
the event of there being any conflict between the Events of Default
listed
in this Clause 12 and the events listed in Clause 5.1.1 of the Mortgages
the Events of Default listed in this Clause 12 shall
prevail.
|
13 |
Application
of Monies
|
13.1
|
Master
Agreement rights
The
rights conferred on a Future Swap Provider by this Clause 13 shall
be in
addition to, and without prejudice to or limitation of, the rights
of
netting and set off conferred on such Future Swap Provider by the
relevant
Master Agreement.
|
13.2
|
Application
Whilst
an Event of Default is continuing unremedied or unwaived, the Borrower
irrevocably authorises the Agent to apply all sums which the Agent
may
receive:-
|
13.2.1
|
pursuant
to a sale or other disposition of a Vessel or any right, title or
interest
in a Vessel; or
|
13.2.2
|
by
way of payment to the Agent of any sum in respect of the Insurances,
Earnings or Requisition Compensation of a Vessel;
or
|
13.2.3
|
otherwise
arising under or in connection with any of the Security
Documents
|
|
in
or towards satisfaction, or by way of retention on account, of the
Indebtedness, in such manner as the Agent may in its discretion determine
PROVIDED THAT any part of the Indebtedness arising out of a Master
Agreement shall be satisfied only after every other part of the
Indebtedness for the time being due and payable has been satisfied
in
full.
|
14 |
Assignment
and
Sub-Participation
|
14.1
|
Right
to assign
Subject
always to the provisions of clause 14.7 each of the Banks may assign
or
transfer to any other bank or financial institution all or any of
its
rights under or pursuant to the Security Documents or assign or grant
sub-participations in all or any part of its Commitment provided
that each
such assignment, transfer or sub-participation shall (unless the
assignment transfer or sub-participation is to another Bank or an
affiliate of a Bank) be in a minimum amount of five million Dollars
($5,000,000) and with the prior written consent of the Borrower (which
shall not be unreasonably withheld and which shall be deemed given
if no
response shall be received within ten (10) Business Days of a request
or
at any time whilst an Event of Default is in
existence).
|
14.2
|
Borrower's
co-operation
The
Borrower will co-operate fully and will procure that the other Security
Parties co-operate fully with the Banks in connection with any assignment,
transfer or sub-participation pursuant to Clause 14.1; will execute
and
procure the execution of such documents as the Banks may require
in
connection therewith; and irrevocably authorise each of the Finance
Parties to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer
or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Facility or the Security Documents which each
such
Finance Party may in its discretion consider necessary or desirable
(subject to any duties of confidentiality applicable to the Banks
generally).
|
14.3
|
Rights
of assignee
Any
assignee or transferee of a Bank shall (unless limited by the express
terms of the assignment or transfer) take the full benefit of every
provision of the Security Documents benefiting that Bank.
|
14.4
|
Transfer
Certificates
If
any Bank wishes to transfer all or any of its Commitment as contemplated
in Clause 14.1 then such transfer may be effected by the delivery
to the
Agent 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 the date of delivery
of such
Transfer Certificate to the Agent:
|
14.4.1
|
to
the extent that in such Transfer Certificate the Bank which is a
party
thereto seeks to transfer its Commitment in whole, the Borrower and
such
Bank shall be released from further obligations towards each other
under
this Agreement and their respective rights against each other shall
be
cancelled other than existing claims against such Bank for breach
of this
Agreement (such rights, benefits and obligations being referred to
in this
Clause 14.4 as "
discharged
rights and obligations
");
|
14.4.2
|
the
Borrower and the Transferee which is a party thereto shall assume
obligations towards each other and/or acquire rights against each
other
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;
|
14.4.3
|
the
Finance Parties and the Transferee shall acquire the same rights
and
benefits and assume the same obligations between themselves as they
would
have acquired and assumed had such Transferee been an original party
to
this Agreement as a Bank with the rights, benefits and/or obligations
acquired or assumed by it as a result of such transfer;
and
|
14.4.4
|
the
Transferee shall pay to the Agent a transfer fee of four thousand
Dollars
($4,000). Subject to the provision of Clause 17.3, any expense incurred
in
connection with any Spanish registration requirements resulting from
any
such assignment or transfer, including but not limited to any registration
requirements in respect of the Mortgages and any legal fees, notarial
fees
and other registration taxes and fees) shall be for the cost of the
Transferee.
|
14.5
|
Power
of Attorney
In
order to give effect to each Transfer Certificate the Finance Parties
and
the Borrower each hereby irrevocably and unconditionally appoint
the Agent
as its true and lawful attorney and/or irrevocably authorise with
full
power to execute on their respective behalves each Transfer Certificate
delivered to the Agent pursuant to Clause 14.4 without the Agent
being
under any obligation to take any further instructions from or give
any
prior notice to, any of the Finance Parties or, subject to the Borrower's
rights under Clause 14.1, the Borrower before doing so and the Agent
shall
so execute each such Transfer Certificate on behalf of the other
Finance
Parties and the Borrower immediately on their receipt of the same
pursuant
to Clause 14.4.
|
14.6
|
Notification
The
Agent shall promptly notify the other Finance Parties, the Transferee
and
the Borrower on the execution by it of any Transfer Certificate together
with details of the amount transferred, the Transfer Date and the
parties
to such transfer.
|
14.7
|
Transfer
of the Loan Agreement by KfW
.
Notwithstanding
the provisions of Clause 14.1 KfW may transfer all its rights and
obligations under this Agreement to a KfW Subsidiary with effect
from
1 January 2008 or any later date. By signing this Agreement the
Borrower consents to such a transfer. KfW or the KfW Subsidiary will
inform the Borrower of the date on which the transfer of KfW’s rights and
obligations to the KfW Subsidiary takes effect. In this connection
the
following will apply:
|
14.7.1
|
Deductions
and Increased costs.
If,
by reason of circumstances already existing at the transfer date,
the
Borrower would be obliged to make a payment to the KfW Subsidiary
under
Clauses 15.2, 15.3 or 15.6, it need pay the KfW Subsidary only such
an
amount as it would have been obliged to pay KfW if the transfer had
not
occurred.
|
14.7.2
|
Costs
.
KfW
will pay all costs incurred as a result of or in connection with
such
transfer.
|
|
For
the purposes of this Clause
KfW
Subsidiary
means
a company which within the meaning of section 15 ff. German Stock
Corporation Act (
Aktiengesetz
)
is directly or indirectly (i) majority owned (
im
Mehrheitsbesitz
)
by KfW or (ii) controlled (
abh’ngig
)
by KfW.
|
14.8
|
Disclosure
of information
.
In
connection with any transfer under Clause 14.7
KfW
may disclose confidential information to the KfW Subsidiary or its
agents
or its legal advisors.
|
14.9
|
Mitigation
If
a transfer is to take place under Clause 14.7 then, without in any
way
limiting the rights of KfW under Clauses 15.2, 15.3 or 15.6, KfW
shall
take reasonable steps to mitigate any circumstances which arise and
which
would result in any amount becoming payable under or pursuant to
Clauses
15.2, 15.3 or 15.6 and it shall co-operate in completing any procedural
formalities necessary for the Borrower to obtain authorisation to
make any
payment under Clauses 15.2, 15.3 and 15.6 without a deduction or
withholding.
|
15 |
Payments,
Mandatory Prepayment, Reserve Requirements and
Illegality
|
15.1
|
Payments
All
amounts payable by the Borrower under or pursuant to any of the Security
Documents shall be paid to such accounts at such banks as the Agent
may
from time to time direct to the Borrower and shall be paid in Dollars
in
same day funds (or such funds as are required by the authorities
in the
United States of America for settlement of international payments
for
immediate value). Payments shall be deemed to have been received
by the
Agent on the date on which the Agent receives authenticated advice
of
receipt, unless that advice is received by the Agent on a day other
than a
Business Day or at a time of day (whether on a Business Day or not)
when
the Agent in its reasonable discretion considers that it is impossible
or
impracticable for the Agent to utilise the amount received for value
that
same day, in which event the payment in question shall be deemed
to have
been received by the Agent on the Business Day next following the
date of
receipt of advice by the Agent.
|
15.2
|
No
deductions or withholdings
All
payments (whether of principal or interest or otherwise) to be made
by the
Borrower pursuant to the Security Documents shall, subject only to
Clause
15.3, be made free and clear of and without deduction for or on account
of
any Taxes or other deductions, withholdings, restrictions, conditions
or
counterclaims of any nature, and the Borrower will not claim any
equity in
respect of any payment due from it to the Banks or to the Agent under
or
in relation to any of the Security
Documents.
|
15.3
|
Grossing-up
If
at any time any law requires (or is interpreted to require) the Borrower
to make any deduction or withholding from any payment, or to change
the
rate or manner in which any required deduction or withholding is
made, the
Borrower will promptly notify the Agent and, simultaneously with
making
that payment, will pay to the Agent whatever additional amount (after
taking into account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is
necessary to ensure that, after making the deduction or withholding,
the
Agent and the Banks receive a net sum equal to the sum which they
would
have received had no deduction or withholding been made.
|
15.4
|
Evidence
of deductions
If
at any time the Borrower is required by law to make any deduction
or
withholding from any payment to be made by it pursuant to any of
the
Security Documents, the Borrower will pay the amount required to
be
deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty days after
making
that payment, deliver to the Agent an original receipt issued by
the
relevant authority, or other evidence reasonably acceptable to the
Agent,
evidencing the payment to that authority of all amounts required
to be
deducted or withheld.
If
the Borrower makes any deduction or withholding from any payment
under or
pursuant to any of the Security Documents, and a Bank subsequently
receives a refund or allowance from any tax authority which that
Bank at
its sole discretion identifies as being referable to that deduction
or
withholding, that Bank shall, as soon as reasonably practicable,
pay to
the Borrower an amount equal to the amount of the refund or allowance
received, if and to the extent that it may do so without prejudicing
its
right to retain that refund or allowance and without putting itself
in any
worse financial position than that in which it would have been had
the
deduction or withholding not been required to have been made. Nothing
in
this Clause shall be interpreted as imposing any obligation on any
Bank to
apply for any refund or allowance nor as restricting in any way the
manner
in which any Bank organises its tax affairs, nor as imposing on any
Bank
any obligation to disclose to the Borrower any information regarding
its
tax affairs or tax computations. All costs and expenses incurred
by any
Bank in obtaining or seeking to obtain a refund or allowance from
any tax
authority pursuant to this Clause shall be for the Borrower's
account.
|
15.5
|
Adjustment
of due dates
If
any payment to be made under any of the Security Documents, other
than a
payment of interest on the Facility (to which Clause 6.5 applies),
shall
be due on a day which is not a Business Day, that payment shall be
made on
the next succeeding Business Day (unless the next succeeding Business
Day
falls in the next calendar month in which event the payment shall
be made
on the next preceding Business Day). Any such variation of time shall
be
taken into account in computing any interest in respect of that
payment.
|
15.6
|
Change
in law
If,
by reason of the introduction of any law, or any change in any law,
or the
interpretation or administration of any law, or in compliance with
any
request or requirement from any central bank or any fiscal, monetary
or
other authority:-
|
15.6.1
|
any
Finance Party (or the holding company of any Finance Party) shall
be
subject to any Tax with respect to payments of all or any part of
the
Indebtedness; or
|
15.6.2
|
the
basis of Taxation of payments to any Finance Party in respect of
all or
any part of the Indebtedness shall be changed;
or
|
15.6.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans
by
any branch of any Finance Party or its direct or indirect holding
company;
or
|
15.6.4
|
any
ratio (whether cash, capital adequacy, liquidity or otherwise) which
any
Finance Party or its direct or indirect holding company is required
or
requested to maintain shall be affected;
or
|
15.6.5
|
there
is imposed on any Finance Party (or on the direct or indirect holding
company of any Finance Party) any other condition in relation to
the
Indebtedness or the Security Documents;
|
|
and
the result of any of the above shall be to increase the cost to any
Bank
(or to the direct or indirect holding company of any Bank) of that
Bank
making or maintaining its Commitment or its Drawing, or to cause
any
Finance Party to suffer (in its reasonable opinion) a material reduction
in the rate of return on its overall capital below the level which
it
reasonably anticipated at the Execution Date and which it would have
been
able to achieve but for its entering into this Agreement and/or performing
its obligations under this Agreement, the Finance Party affected
shall
notify the Agent and, on demand to the Borrower by the Agent, the
Borrower
shall from time to time pay to the Agent for the account of the Finance
Party affected the amount which shall compensate that Finance Party
or the
Agent (or the relevant holding company) for such additional cost
or
reduced return. A certificate signed by an authorised signatory of
the
Agent or of the Finance Party affected setting out the amount of
that
payment and the basis of its calculation shall be submitted to the
Borrower and shall be conclusive evidence of such amount save for
manifest
error or on any question of law.
|
15.7
|
Illegality
and impracticality
Notwithstanding
anything contained in the Security Documents, the obligations of
a Bank to
advance or maintain its Commitment shall terminate in the event that
a
change in any law or in the interpretation of any law by any authority
charged with its administration shall make it unlawful for that Bank
to
advance or maintain its Commitment. In such event the Bank affected
shall
notify the Agent and the Agent shall, by written notice to the Borrower,
declare that Bank's obligations to be immediately terminated. If
all or
any part of the Facility shall have been advanced by the Banks to
the
Borrower the portion of the Indebtedness (including all accrued interest)
advanced by the Bank so affected shall be prepaid within thirty days
from
the date of such notice, or sooner if illegality is determined. Clause
5.4
shall apply to that prepayment if it is made on a day other than
the last
day of an Interest Period. During that period, the affected Bank
shall
negotiate in good faith with the Borrower to find an alternative
method or
lending base in order to maintain the
Facility.
|
15.8
|
Changes
in market circumstances
If
at any time a Bank determines (which determination shall be final
and
conclusive and binding on the Borrower) that, by reason of changes
affecting the London Interbank market, adequate and fair means do
not
exist for ascertaining the rate of interest on the Facility or any
part
thereof pursuant to this
Agreement:-
|
15.8.1
|
that
Bank shall give notice to the Agent and the Agent shall give notice
to the
Borrower of the occurrence of such event;
and
|
15.8.2
|
the
Agent shall as soon as reasonably practicable certify to the Borrower
in
writing the effective cost to that Bank of maintaining its Commitment
for
such further period as shall be selected by that Bank and the rate
of
interest payable by the Borrower for that period; or, if that is
not
acceptable to the Borrower,
|
15.8.3
|
the
Agent in accordance with instructions from that Bank and subject
to that
Bank's approval of any agreement between the Agent and the Borrower,
will
negotiate with the Borrower in good faith with a view to modifying
this
Agreement to provide a substitute basis for that Bank’s Commitment which
is financially a substantial equivalent to the basis provided for
in this
Agreement.
|
|
If,
within thirty days of the giving of the notice referred to in
Clause 15.8.1, the Borrower and the Agent fail to agree in writing on
a substitute basis for such Bank’s Commitment the Borrower will
immediately prepay the amount of such Bank’s Commitment and the Maximum
Facility Amount will automatically decrease by the amount of such
Commitment and such decrease shall not be reversed. Clause 5.4 shall
apply
to that prepayment if it is made on a day other than the last day
of an
Interest Period.
|
15.9
|
Non-availability
of currency
If
a Bank is for any reason unable to obtain Dollars in the London Interbank
market and is, as a result, or as a result of any other contingency
affecting the London Interbank market, unable to advance or maintain
its
Commitment in Dollars, that Bank shall give notice to the Agent and
the
Agent shall give notice to the Borrower and that Bank's obligations
to
make the Facility available shall immediately cease. In that event,
if all
or any part of the Facility shall have been advanced by that Bank
to the
Borrower, the Agent in accordance with instructions from that Bank
and
subject to that Bank's approval of any agreement between the Agent
and the
Borrower, will negotiate with the Borrower in good faith with a view
to
establishing a mutually acceptable basis for funding the Facility
or
relevant part thereof from an alternative source. If the Agent and
the
Borrower have failed to agree in writing on a basis for funding the
Facility or relevant part thereof from an alternative source by 11.00
a.m.
on the second Business Day prior to the end of the then current relevant
Interest Period, the Borrower will (without prejudice to its other
obligations under or pursuant to this Agreement, including, without
limitation, its obligation to pay interest on the Facility, arising
on the
expiry of the then relevant Interest Period) prepay the Indebtedness
(or
relevant part thereof) to the Agent on behalf of that Bank on the
expiry
of the then current relevant Interest Period.
|
16 |
Communications
|
16.1
|
Method
Except for Communications pursuant to Clause 9, which shall be made
or
given in accordance with Clause 9.20, any Communication may be given,
delivered, made or served (as the case may be) under or in relation
to
this Agreement by letter or fax and shall be in the English language
and
sent addressed:-
|
16.1.1
|
in
the case of any of the Finance Parties to the Agent at its address
at the
head of this Agreement (fax no:+44 20 7767 7324) marked for the attention
of: the Agency Department; and
|
16.1.2
|
in
the case of the Borrower to the Communications
Address;
|
|
or
to such other address or fax number as the Agent or the Borrower
may
designate for themselves by written notice to the
others.
|
16.2
|
Timing
A
Communication shall be deemed to have been duly given, delivered,
made or
served to or on, and received by a party to this Agreement:-
|
16.2.1
|
in
the case of a fax when the sender receives one or more transmission
reports showing the whole of the Communication to have been transmitted
to
the correct fax number;
|
16.2.2
|
if
delivered to an officer of the relevant party or (in the case of
the
Borrower) left at the Communications Address at the time of delivery
or
leaving; or
|
16.2.3
|
if
posted, at 9.00 a.m. on the fifth Business Day after posting by prepaid
first class post. PROVIDED ALWAYS that Communications to the Agent
and (to
the extent that they relate to the matters specified in Clause 9.4
only)
the Banks shall be effective only upon
receipt.
|
|
Any
Communication by fax shall be promptly confirmed in writing by post
or
hand delivery.
|
17 |
General
Indemnities
|
17.1
|
Currency
In
the event of any Finance Party receiving or recovering any amount
payable
under any of the Security Documents in a currency other than the
Currency
of Account, and if the amount received or recovered is insufficient
when
converted into the Currency of Account at the date of receipt to
satisfy
in full the amount due, the Borrower shall, on the Agent's written
demand,
pay to the Agent such further amount in the Currency of Account as
is
sufficient to satisfy in full the amount due and that further amount
shall
be due to the Agent on behalf of the Finance Parties as a separate
debt
under this Agreement.
|
17.2
|
Costs
and expenses
The
Borrower will, within fourteen (14) days of the Agent's written demand,
reimburse the Agent (on behalf of each of the Finance Parties) for
all
reasonable out of pocket expenses including internal and external
legal
costs (including stamp duty, Value Added Tax or any similar or replacement
tax if applicable) of and incidental to:-
|
17.2.1
|
the
negotiation, syndication, preparation, execution and registration
of the
Security Documents (whether or not any of the Security Documents
are
actually executed or registered and whether or not all or any part
of the
Facility is advanced);
|
17.2.2
|
any
amendments, addenda or supplements to any of the Security Documents
(whether or not completed);
|
17.2.3
|
any
other documents which may at any time be required by any Finance
Party to
give effect to any of the Security Documents or which any Finance
Party is
entitled to call for or obtain pursuant to any of the Security Documents;
and
|
17.2.4
|
the
exercise of the rights, powers, discretions and remedies of the Finance
Parties under or pursuant to the Security
Documents.
|
17.3
|
Events
of Default
The
Borrower shall indemnify the Finance Parties from time to time on
demand
against all losses and costs incurred or sustained by any Finance
Party as
a consequence of any Event of Default, including (without limitation)
any
Break Costs and any costs of assignment of transfer (as envisaged
by
Clause 14.4.4) following and during the continuance of an Event of
Default.
|
17.4
|
Funding
costs
The Borrower shall indemnify the Finance Parties from time to time
on
demand against all losses and costs incurred or sustained by any
Finance
Party if, for any reason due to a default or other action by the
Borrower,
any Drawing is not advanced to the Borrower after the relevant Drawdown
Notice has been given to the Agent, or is advanced on a date other
than
that requested in the Drawdown Notice, including (without limitation)
any
Break Costs.
|
17.5
|
Protection
and enforcement
The
Borrower shall indemnify the Finance Parties from time to time on
demand
against all losses, costs and liabilities which any Finance Party
may from
time to time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on
the
Finance Parties by the Security Documents or in or about the exercise
or
purported exercise by the Finance Parties of any of the rights, powers,
discretions or remedies vested in them under or arising out of the
Security Documents, including (without limitation) any losses, costs
and
liabilities which any Finance Party may from time to time sustain,
incur
or become liable for by reason of any Finance Party being mortgagees
of
any Vessel, assignees of any Mortgage and/or a lender to the Borrower,
or
by reason of any Finance Party being deemed by any court or authority
to
be an operator or controller, or in any way concerned in the operation
or
control, of any Vessel. No such indemnity will be given to a Finance
Party
where any such loss, cost or liability has occurred due to gross
negligence or wilful misconduct on the part of that Finance Party;
however
this shall not affect the right of any other Finance Party to receive
any
such indemnity.
|
17.6
|
Liabilities
of Finance Parties
The
Borrower will from time to time reimburse the Finance Parties on
demand
for all sums which any Finance Party may pay on account of any of
the
Security Parties or in connection with any Vessel (whether alone
or
jointly or jointly and severally with any other person) including
(without
limitation) all sums which any Finance Party may pay or guarantees
which
any Finance Party may give in respect of the Insurances, any expenses
incurred by any Finance Party in connection with the maintenance
or repair
of any Vessel or in discharging any lien, bond or other claim relating
in
any way to any Vessel, and any sums which any Finance Party may pay
or
guarantees which they may give to procure the release of any Vessel
from
arrest or detention.
|
17.7
|
Taxes
The
Borrower shall pay all Taxes to which all or any part of the Indebtedness
or any of the Security Documents may be at any time subject and shall
indemnify the Finance Parties on demand against all liabilities,
costs,
claims and expenses incurred in connection therewith, including but
not
limited to any such liabilities, costs, claims and expenses resulting
from
any omission to pay or delay in paying any such Taxes. The indemnity
contained in this Clause shall survive the repayment of the
Indebtedness.
|
18 |
Miscellaneous
|
18.1
|
Waivers
No
failure or delay on the part of any Finance Party in exercising any
right,
power, discretion or remedy under or pursuant to any of the Security
Documents, nor any actual or alleged course of dealing between any
Finance
Party and any of the Security Parties, shall operate as a waiver
of, or
acquiescence in, any default on the part of any Security Party, unless
expressly agreed to do so in writing by the Agent, nor shall any
single or
partial exercise by any Finance Party of any right, power, discretion
or
remedy preclude any other or further exercise of that right, power,
discretion or remedy, or the exercise by a Finance Party of any other
right, power, discretion or remedy.
|
18.2
|
No
oral variations
No
variation or amendment of any of the Security Documents shall be
valid
unless in writing and signed on behalf of the Agent and the relevant
Security Party.
|
18.3
|
Severability
If
at any time any provision of any of the Security Documents is invalid,
illegal or unenforceable in any respect that provision shall be severed
from the remainder and the validity, legality and enforceability
of the
remaining provisions shall not be affected or impaired in any
way.
|
18.4
|
Successors
etc.
The
Security Documents shall be binding on the Security Parties and on
their
successors and permitted transferees and assignees, and shall inure
to the
benefit of the Finance Parties and their respective successors,
transferees and assignees. The Borrower may not assign or transfer
any of
its rights or duties under or pursuant to any of the Security Documents
without the prior written consent of the
Banks.
|
18.5
|
Further
assurance
If
any provision of the Security Documents shall be invalid or unenforceable
in whole or in part by reason of any present or future law or any
decision
of any court, or if the documents at any time held by the Finance
Parties
on their behalf are considered by the Banks for any reason insufficient
to
carry out the terms of this Agreement, then from time to time the
Borrower
will promptly, on demand by the Agent, execute or procure the execution
of
such further documents as in the reasonable opinion of the Banks
are
necessary to provide adequate security for the repayment of the
Indebtedness.
|
18.6
|
Other
arrangements
The
Finance Parties may, without prejudice to their rights under or pursuant
to the Security Documents, at any time and from time to time, on
such
terms and conditions as they may in their discretion determine, and
without notice to the Borrower, grant time or other indulgence to,
or
compound with, any other person liable (actually or contingently)
to the
Finance Parties or any of them in respect of all or any part of the
Indebtedness, and may release or renew negotiable instruments and
take and
release securities and hold funds on realisation or suspense account
without affecting the liabilities of the Borrower or the rights of
the
Finance Parties under or pursuant to the Security
Documents.
|
18.7
|
Advisers
The Borrower irrevocably authorises the Agent, at any time and from
time
to time during the Facility Period, to consult insurance advisers
on any
matters relating to the Insurances, including, without limitation,
the
collection of insurance claims, and from time to time to consult
or retain
advisers or consultants to monitor or advise on any other claims
relating
to the Vessels. The Borrower will provide such advisers and consultants
with all information and documents which they may from time to time
reasonably require and will reimburse the Agent on demand for all
reasonable costs and expenses incurred by the Agent in connection
with the
consultation or retention of such advisers or
consultants.
|
18.8
|
Delegation
The
Finance Parties may at any time and from time to time delegate to
any
person any of their rights, powers, discretions and remedies pursuant
to
the Security Documents, other than rights relating to actions to
be taken
by the Majority Banks or the Banks as a group on such terms as they
may
consider appropriate (including the power to
sub-delegate).
|
18.9
|
Rights
etc. cumulative
Every
right, power, discretion and remedy conferred on the Finance Parties
under
or pursuant to the Security Documents shall be cumulative and in
addition
to every other right, power, discretion or remedy to which they may
at any
time be entitled by law or in equity. The Finance Parties may exercise
each of their rights, powers, discretions and remedies as often and
in
such order as they deem appropriate subject to obtaining the prior
written
consent of the Majority Banks. The exercise or the beginning of the
exercise of any right, power, discretion or remedy shall not be
interpreted as a waiver of the right to exercise any other right,
power,
discretion or remedy either simultaneously or
subsequently.
|
18.10
|
No
enquiry
The
Finance Parties shall not be concerned to enquire into the powers
of the
Security Parties or of any person purporting to act on behalf of
any of
the Security Parties, even if any of the Security Parties or any
such
person shall have acted in excess of their powers or if their actions
shall have been irregular, defective or informal, whether or not
any
Finance Parties had notice thereof.
|
18.11
|
Continuing
security
The
security constituted by the Security Documents shall be continuing
and
shall not be satisfied by any intermediate payment or satisfaction
until
the Indebtedness shall have been repaid in full and none of the Finance
Parties shall be under any further actual or contingent liability
to any
third party in relation to the Vessels, the Insurances, Earnings
or
Requisition Compensation or any other matter referred to in the Security
Documents.
|
18.12
|
Security
cumulative
The
security constituted by the Security Documents shall be in addition
to any
other security now or in the future held by the Finance Parties or
any of
them for or in respect of all or any part of the Indebtedness, and
shall
not merge with or prejudice or be prejudiced by any such security
or any
other contractual or legal rights of any of the Finance Parties,
nor
affected by any irregularity, defect or informality, or by any release,
exchange or variation of any such security. Section 93 of the Law
of
Property Act 1925 and all provisions which the Agent considers analogous
thereto under the law of any other relevant jurisdiction shall not
apply
to the security constituted by the Security Documents.
|
18.13
|
Re-instatement
If
any Finance Party takes any steps to exercise any of its rights,
powers,
remedies or discretions pursuant to the Security Documents and the
result
shall be adverse to the Finance Parties, the Borrower and the Finance
Parties shall be restored to their former positions as if no such
steps
had been taken.
|
18.14
|
No
liability
None
of the Finance Parties, nor any agent or employee of any Finance
Party,
nor any receiver and/or manager appointed by the Agent, shall be
liable
for any losses which may be incurred in or about the exercise of
any of
the rights, powers, discretions or remedies of the Finance Parties
under
or pursuant to the Security Documents nor liable as mortgagee in
possession for any loss on realisation or for any neglect or default
of
any nature for which a mortgagee in possession might otherwise be
liable
unless such Finance Party’s action constitutes gross negligence or wilful
misconduct.
|
18.15
|
Rescission
of payments etc.
Any
discharge, release or reassignment by any of the Finance Parties
of any of
the security constituted by, or any of the obligations of any Security
Party contained in, any of the Security Documents shall be (and be
deemed
always to have been) void if any act (including, without limitation,
any
payment) as a result of which such discharge, release or reassignment
was
given or made is subsequently wholly or partially rescinded or avoided
by
operation of any law, unless such Finance Party's action constitutes
gross
negligence or wilful misconduct.
|
18.16
|
Subsequent
Encumbrances
If
the Agent receives notice of any subsequent Encumbrance (other than
any
Encumbrance permitted by the terms of this Agreement) affecting any
Vessel
or all or any part of the Insurances, Earnings, Requisition Compensation
or Charter Rights, the Agent may open a new account in its books
for the
Borrower. If the Agent does not open a new account, then (unless
the
Encumbrance is permitted by the terms of this Agreement or the Agent
gives
written notice to the contrary to the Borrower) as from the time
of
receipt by the Agent of notice of such subsequent Encumbrance, all
payments made to the Agent shall be treated as having been credited
to a
new account of the Borrower and not as having been applied in reduction
of
the Indebtedness.
|
18.17
|
Releases
If
any Finance Party shall at any time in its discretion release any
party
from all or any part of any of the Security Documents or from any
term,
covenant, clause, condition or obligation contained in any of the
Security
Documents, the liability of any other party to the Security Documents
shall not be varied or diminished.
|
18.18
|
Certificates
Any
certificate or statement signed by an authorised signatory of the
Agent
purporting to show the amount of the Indebtedness (or any part of
the
Indebtedness) or any other amount referred to in any of the Security
Documents shall, save for manifest error or on any question of law,
be
conclusive evidence as against the Borrower of that amount.
|
18.19
|
Survival
of representations and warranties
The
representations and warranties on the part of the Borrower contained
in
this Agreement shall survive the execution of this Agreement and
the
advance of the Facility or any part thereof.
|
18.20
|
Counterparts
This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same instrument.
|
18.21
|
Third
Party Rights
Notwithstanding the provisions of the Contracts (Rights of Third
Parties)
Act 1999, no term of this Agreement is enforceable by a person who
is not
a party to it other than any Future Swap
Provider.
|
19 |
Law and Jurisdiction
|
19.1
|
Governing
law
This
Agreement shall in all respects be governed by and interpreted in
accordance with English law.
|
19.2
|
Jurisdiction
For
the exclusive benefit of the Finance Parties, the parties to this
Agreement irrevocably agree that the courts of England are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement and that any Proceedings may be brought
in
those courts. The Borrower irrevocably waives any objection which
it may
now or in the future have to the laying of the venue of any Proceedings
in
any court referred to in this Clause, and any claim that those Proceedings
have been brought in an inconvenient or inappropriate
forum.
|
19.3
|
Alternative
jurisdictions
Nothing
contained in this Clause shall limit the right of the Finance Parties
to
commence any Proceedings against the Borrower in any other court
of
competent jurisdiction nor shall the commencement of any Proceedings
against the Borrower in one or more jurisdictions preclude the
commencement of any Proceedings in any other jurisdiction, whether
concurrently or not.
|
19.4
|
Service
of process
Without
prejudice to any other mode of service allowed under any relevant
law, the
Borrower:
|
19.4.1
|
irrevocably
appoints Teekay Shipping (UK) Ltd of 2
nd
Floor, 86 Jermyn Street, London SW1Y 6JD, England as its agent for
service
of process in relation to any proceedings before the English courts
in
connection with this Agreement;
and
|
19.4.2
|
agrees
that failure by a process agent to notify the Borrower of the process
will
not invalidate the proceedings
concerned.
|
The
Banks
|
The
Commitments ($)
|
The
Proportionate Shares (%)
|
ING
Bank N.V.,
London
Branch
60
London Wall
London
EC2M
5TQ
Fax
no: +44 207 767 7252
Attention:
David Rolls
|
70,000,000
|
21.212%
|
Alliance
& Leicester
Commercial
Finance plc
120
New Cavendish Street
London
W1W
6XX
Fax
no: + 44 (0) 161 953 3517
Attention:
Head of Corporate
Administration
|
30,000,000
|
9.091%
|
Banco
Bilbao Vizcaya
Argentaria
S.A.
Via
de los Poblados s/n
28033
Madrid
Spain
Fax
no: +34 91 374 4140
Attention:
Trinidad Bernad Oritz
|
30,000,000
|
9.091%
|
Caja
de Ahorros Y Monte de
Piedad
de Madrid
Paseo
de la Castellana
180
4
°
Planta
Madrid
Spain
Fax
no: +3491 423 9727/28
Attention:
Martin Alonso Ana
Marie
del Pozo
|
50,000,000
|
15.152%
|
KfW
Palmengartenstr.
5-9
D
-
60325 Frankfurt am Main
Fax:
+49-69 7431-3768
Attention:
Dr Marco Albers
|
50,000,000
|
15.152%
|
Landesbank
Hessen-Thüringen Girozentrale (Helaba)
420
Fifth Avenue, 24th Fl.
New
York, NY 10018-2729
Fax:
+1 212 703 - 5256
Attention:
Ralf Goebel
Gerhard
Winklmeier
|
50,000,000
|
15.152%
|
Lloyds
TSB Bank plc
25
Gresham Street
London
EC2V
7HN
Fax
no: +44 0207 356 2396
Attention:
Head of Portfolio
Management
|
50,000,000
|
15.152%
|
Owner
|
Country of
Incorporation
|
Vessel
|
Flag
|
Naviera Teekay
Gas II S.L.
|
Spain | GALICIA SPIRIT | Spain |
Naviera Teekay
Gas S.L.
|
Spain | HISPANIA SPIRIT | Spain |
Months
after Execution Date
|
Scheduled
Commitment
Reduction
|
Maximum
Facility Amount
|
0
|
US$330,000,000
|
|
6
|
US$4,328,000
|
US$325,672,000
|
12
|
US$4,459,000
|
US$321,213,000
|
18
|
US$4,595,000
|
US$316,618,000
|
24
|
US$4,735,000
|
US$311,883,000
|
30
|
US$4,880,000
|
US$307,003,000
|
36
|
US$5,029,000
|
US$301,974,000
|
42
|
US$5,182,000
|
US$296,792,000
|
48
|
US$5,340,000
|
US$291,452,000
|
54
|
US$5,503,000
|
US$285,949,000
|
60
|
US$5,670,000
|
US$280,279,000
|
66
|
US$5,844,000
|
US$274,435,000
|
72
|
US$6,022,000
|
US$268,413,000
|
78
|
US$6,206,000
|
US$262,207,000
|
84
|
US$6,395,000
|
US$255,812,000
|
90
|
US$6,589,000
|
US$249,223,000
|
96
|
US$6,791,000
|
US$242,432,000
|
102
|
US$6,998,000
|
US$235,434,000
|
108
|
US$7,212,000
|
US$228,222,000
|
114
|
US$7,431,000
|
US$220,791,000
|
120
|
US$7,658,000
|
US$213,133,000
|
126
|
US$7,892,000
|
US$205,241,000
|
132
|
US$8,132,000
|
US$197,109,000
|
138
|
US$8,381,000
|
US$188,728,000
|
144
|
US$8,636,000
|
US$180,092,000
|
This transfer certificate relates to a facility agreement (as the same may be from time to time amended, varied, novated or supplemented, the " Facility Agreement ") dated 2006 whereby an initial reducing revolving credit facility of up to $330,000,000 was made available to Teekay LNG Partners L.P. as borrower by a group of banks on whose behalf the Agent acts 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" and
"Transferee" are defined in the schedule to this transfer certificate
.
|
2 |
The
Bank (i) confirms that the details in the Schedule hereto under the
heading "
Bank's
Commitment
"
accurately summarises its Commitment in the Facility Agreement and
(ii)
requests the Transferee to accept and procure the transfer to the
Transferee of the portion of such Commitment specified in the Schedule
hereto by counter-signing and delivering the Transfer Certificate
to the
Agent at its address for the service of Communications specified
in the
Facility Agreement.
|
3 |
The
Transferee requests the Agent to accept this Transfer Certificate
as being
delivered to the Agent pursuant to and for the purposes of clause
14.4 of
the Facility Agreement so as to take effect in accordance with the
terms
thereof on the Transfer Date or on such later date as may be determined
in
accordance with the terms thereof.
|
4 |
The
Transferee confirms that it has received a copy of the 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 in the future
rely on the Bank or any other party to the Facility Agreement 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 or any
other
party to the Facility Agreement to access or keep under review on
its
behalf the financial condition, creditworthiness, condition, affairs,
status or nature of the Borrower or any other party to the Facility
Agreement.
|
5 |
Execution
of this Transfer Certificate by the Transferee constitutes its
representation to the Transferor and all other parties to the Facility
Agreement that it has power to become a party to the Facility Agreement
as
a Bank on the terms herein and therein set out and has taken all
steps to
authorise execution and delivery of this Transfer Certificate.
|
6 |
The
Transferee 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 the Transfer
Certificate is expressed to take
effect.
|
7 |
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 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.
|
8 |
The
Bank gives notice that nothing in this transfer certificate 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 acknowledges the absence of any such obligation as is
referred
to in (i) or (ii) above.
|
9 |
This
Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and interpreted in accordance with
English
law.
|
1 |
Bank:
|
2 |
Transferee:
|
3 |
Transfer
Date:
|
4 |
Commitment
1
:
Portion
Transferred
|
[Transferor Bank] | [Transferee Bank] |
By: | By: |
Date: | Date: |
ING Bank N.V. |
1. |
Los
términos definidos en el Acuerdo de Financiación tendrán, salvo indicación
en contrario, los mismos significados que en aquél. Los términos “Banco” y
“Cesionario” se definen en el anexo a este certificado de
cesión.
|
2. |
El
Banco (i) confirma que los particulares recogidos en el Anexo a la
presente bajo el encabezamiento
“Compromiso
del Banco”
resume de forma ajustada su Compromiso bajo el Acuerdo de Financiación y
(ii) requiere al Cesionario para que acepte y procure la cesión al
Cesionario de la parte de tal Compromiso que se especifica en el
Anexo
mediante la firma y entrega del Certificado de Cesión al Agente en la
dirección para el servicio de Comunicaciones especificado en el Acuerdo de
Financiación.
|
3. |
El
Cesionario requiere al Agente para que acepte este Certificado de
Cesión
como entregado al Agente para y a los efectos de la cláusula 14.4 del
Acuerdo de Financiación para que despliegue los efectos de conformidad con
los términos allí referidos en la Fecha de Cesión o en aquella fecha
posterior según ésta pueda ser fijada de conformidad con los términos allá
recogidos.
|
4. |
El
Cesionario confirma que ha recibido una copia del Acuerdo de Financiación
junto con cualquier otra información que ha requerido en relación con esta
transacción y que no se ha basado ni se basará en ningún momento en el
futuro en el Banco o en cualquier otra parte en el Acuerdo de Financiación
para verificar o requerir en su nombre sobre la legalidad, validez,
efectividad, adecuación, exactitud o integridad de cualquiera de dicha
información y además acuerda que no se ha basado y no se basará en el
Banco o en ninguna otra parte en el Contrato de Financiación para acceder
o mantener bajo revisión en su nombre la condición financiera, capacidad
crediticia, condición, asuntos, estatus o naturaleza del Prestatario o de
cualquier otra parte en el Acuerdo de
Financiación.
|
5. |
La
ejecución de este Certificado de Cesión por el Cesionario constituye su
manifestación al Cedente y a todas las partes en el Contrato de
Financiación de que tiene el poder de constituirse en parte del Acuerdo de
Financiación como un Banco en los términos aquí y allí recogidos y de que
ha adoptado todos los pasos necesarios para la firma y entrega de
este
Certificado de Cesión.
|
6. |
El
Cesionario se compromete con el Banco y con cada una de las otras
partes
en el Contrato de Financiación a que cumplirá de conformidad con sus
términos todas aquellas obligaciones que de conformidad con el Acuerdo
de
Financiación serán asumidas por aquél tras la entrega de este Certificado
de Cesión al Agente y que cumplirá todas las condiciones (si las hubiere)
sujetas a las cuales se exprese que este Certificado de Cesión tendrá
efecto.
|
7. |
El
Banco no presta representación ni garantía alguna y no asume ninguna
responsabilidad con relación a la legalidad, validez, efectividad,
adecuación o ejecutabilidad del Acuerdo de Financiación o de cualquier
documento con él relacionado y no asume responsabilidad alguna en relación
a la situación financiera del Prestatario o por el cumplimiento y
observancia por el Prestatario de cualquiera de sus obligaciones
bajo el
Acuerdo de Financiación o bajo cualquier documento relacionado con el
mismo y todas y cada una de las condiciones o garantías, ya sean expresas
o implícitas por ley o de cualquier otra forma, se excluyen por la
presente.
|
8. |
El
Banco notifica que nada en este certificado de cesión o en el Acuerdo de
Financiación (o en cualquier otro documento referente al mismo) obligará
al Banco a (i) aceptar una retrocesión por parte del Cesionario de todos o
parte de sus derechos, beneficios y/o obligaciones bajo el Acuerdo
de
Financiación cedidos por la presente o (ii) a soportar ninguna pérdida
sufrida o incurrida directa o indirectamente por el Cesionario por
cualquier razón incluida, sin limitación, la falta de cumplimiento por el
Prestatario o por cualquier otra parte en el Acuerdo de Financiación (o de
cualquier otro documento relacionado con éste) bajo cualquiera de dichos
documentos. El Cesionario reconoce la ausencia de cualquiera de dichas
obligaciones referidas en los apartados (i) o (ii)
precedentes.
|
9. |
Este
Certificado de Cesión y los derechos y obligaciones de las partes bajo el
mismo se regirán e interpretarán de conformidad con la ley
inglesa.
|
1. |
Banco:
|
2. |
Cesionario:
|
3. |
Fecha
de la Cesión:
|
4. |
Compromiso
2
:
Parte
Cedida:
|
(Banco Cedente) | (Banco Cesionario) |
Por: | Por: |
Fecha: | Fecha: |
To:
|
ING
BANK N.V.
|
From:
|
TEEKAY
LNG PARTNERS L.P.
|
[Date]
|
1
|
The
Mandatory Cost is an addition to the interest rate to compensate
the Banks
for the cost of compliance with (a) the requirements of the Bank
of
England and/or the Financial Services Authority (or, in either case,
any
other authority which replaces all or any of its functions) or (b)
the
requirements of the European Central
Bank.
|
2
|
On
the first day of each Interest Period (or as soon as possible thereafter)
the Agent shall calculate, as a percentage rate, a rate (the "
Additional
Cost Rate
")
for each Bank, in accordance with the paragraphs set out below. The
Mandatory Cost will be calculated by the Agent as a weighted average
of
the Banks' Additional Cost Rates (weighted in proportion to the percentage
participation of each Bank in the Loan) and will be expressed as
a
percentage rate per annum.
|
3
|
The
Additional Cost Rate for any Bank lending from a Facility Office
in a
Participating Member State will be the percentage notified by that
Bank to
the Agent. This percentage will be certified by that Bank in its
notice to
the Agent to be its reasonable determination of the cost (expressed
as a
percentage of that Bank's participation in all loans made from that
Facility Office) of complying with the minimum reserve requirements
of the
European Central Bank in respect of loans made from that Facility
Office.
|
4
|
The
Additional Cost Rate for any Bank lending from a Facility Office
in the
United Kingdom will be calculated by the Agent as
follows:
|
E
x 0.01
|
|
300
per
cent. per
annum.
|
Where
E is the rate of charge payable by a Bank to the Financial Services
Authority under the Fees Rules in respect of the relevant financial
year
of the Financial Services Authority (calculated for this purpose
by the
Agent as being the average of the Fee Tariffs applicable to that
Bank for
that financial year).
|
5
|
For
the purposes of this Schedule:
|
(a)
|
"
Eligible
Liabilities
and
"
Special
Deposits
"
have the meanings given to them from time to time under or pursuant
to the
Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;
|
(b)
|
"
Facility
Office
"
means the office notified by a Bank to the Agent in writing on or
before
the date it becomes a Bank as the office through which it will perform
its
obligations under the Agreement;
|
(c)
|
"
Fee
Rules
"
means the rules on periodic fees contained in the FSA Supervision
Manual
or such other law or regulation as may be in force from time to time
in
respect of the payment of fees for the acceptance of
deposits;
|
(d)
|
"
Fee
Tariffs
"
means the fee tariffs specified in the Fees Rules under the activity
group
A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required
pursuant to the Fee Rules but taking into account any applicable
discount
rate); and
|
(e)
|
"
Participating
Member State
"
means any member state of the European Communities that adopts or
has
adopted the euro as its lawful currency in accordance with legislation
of
the European Union relating to European Monetary
Union;
|
(f)
|
"
Parties
"
means any party to the Agreement, including its successors in title
permitted assigns and permitted transferees;
and
|
(g)
|
"
Tariff
Base
"
has the meaning given to it in, and will be calculated in accordance
with,
the Fees Rules.
|
6
|
If
requested by the Agent, each Bank shall, as soon as practicable after
publication by the Financial Services Authority, supply to the Agent,
the
rate of charge payable by that Bank to the Financial Services Authority
pursuant to the Fees Rules in respect of the relevant financial year
of
the Financial Services Authority (calculated for this purpose by
that Bank
as being the average of the Fee Tariffs applicable to that Bank for
that
financial year).
|
7
|
Each
Bank shall supply any information required by the Agent for the purpose
of
calculating its Additional Cost Rate. In particular, but without
limitation, each Bank Shall supply the following information on or
prior
to the date on which it becomes a
Bank:
|
(a)
|
the
jurisdiction of its Facility Office;
and
|
(b)
|
any
other information that the Agent may reasonably require for such
purpose.
|
|
Each
Bank shall promptly notify the Agent of any change to the information
provided by it pursuant to this
paragraph.
|
8
|
The
percentages of each Bank for the purpose of E above shall be determined
by
the Agent based upon the information supplied to it pursuant to paragraphs
6 and 7 above and on the assumption that, unless the Bank notifies
the
Agent to the contrary, each Bank's obligations in relation to cash
ratio
deposits and Special Deposits are the same as those of a typical
bank from
its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as in its Facility
Office.
|
9
|
The
Agent shall have no liability to any person if such determination
results
in an Additional Cost Rate which over or under compensates any Bank
and
shall be entitled to assume that the information provided by any
Bank
pursuant to paragraphs 3, 6 and 7 above is true and correct in all
respects.
|
10
|
The
Agent shall distribute the additional amounts received as a result
of the
Mandatory Cost to the Banks on the basis of the Additional Cost Rate
for
each Bank based on the information provided by each Bank pursuant
to
paragraphs 3, 6 and 7 above.
|
11
|
Any
determination by the Agent pursuant to this Schedule in relation
to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable
to a Bank shall, in the absence of manifest error, be conclusive
and
binding on all Parties.
|
12
|
The
Agent may from time to time, after consultation with the Borrower
and the
Banks determine and notify to all Parties any amendments which are
required to be made to this Schedule in order to comply with any
change in
law, regulation or any requirements from time to time imposed by
the Bank
of England, the Financial Services Authority or the European Central
Bank
(or, in any case, any other authority which replaces all or any of
its
functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all Parties.
|
1
|
the
aggregate of Free Liquidity and undrawn committed revolving credit
lines
available to be drawn by the Borrower and/or its Subsidiaries (but
excluding undrawn committed revolving credit lines with less than
six (6)
months to maturity) was at all times equal to or greater than/fell
below
$35,000,000. Therefore the condition contained in Clause 10.2.15(i)
of the
Loan Agreement [has/has not] been complied with in respect of the
Relevant
Period.
|
2
|
The
Tangible Net Worth of the Borrower [was at all times equal to or
greater
than/fell below] $400,000,000. Therefore the condition contained
in Clause
10.2.15(ii) of the Loan Agreement [has/has not] been complied
with.
|
SIGNED by | ) |
duly authorised for and on behalf | ) |
of TEEKAY GP L.L.C . as General Partner | ) |
for and on behalf of | ) |
TEEKAY LNG PARTNERS L.P. | ) |
in the presence of:- | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of ING BANK N.V. | ) |
(as the Agent) | ) |
in the presence of:- | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of ING BANK N.V. | ) |
(as the Arranger) | ) |
in the presence of:- | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of ING BANK N.V. | ) |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of ALLIANCE & LEICESTER | ) |
COMMERICAL FINANCE PLC | ) |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of BANCO BILBAO | ) |
VIZCAYA ARGENTARIA S.A. | ) |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of CAJA DE AHORROS Y MONTE DE | ) |
PIEDAD DE MADRID | ) |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of KfW | |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of LANDESBANK HESSEN- | ) |
THURINGEN GIROZENTRALE | ) |
(as Bank) | ) |
SIGNED by | ) |
duly authorised for and on behalf | ) |
of LLOYDS TSB BANK PLC | ) |
(as Bank) | ) |
CONTENTS
|
Page
|
|
1 | Definitions and Interpretation | 1 |
2 | The Facility and its Purpose | 20 |
3 | Conditions Precedent and Subsequent | 26 |
4 | Representations and Warranties | 29 |
5 | Repayment and Prepayment | 34 |
6 | Interest | 36 |
7 | Fees | 37 |
8 | Security Documents | 37 |
9 | Agency and Trust | 38 |
10 | Covenants | 48 |
11 | Earnings | 54 |
12 | Events Of Default | 54 |
13 | Application of Monies | 60 |
14 | Assignment and Sub-Participation | 61 |
15 | Payments, Mandatory Prepayment, Reserve Requirements and Illegality | 64 |
16 | Communications | 69 |
17 | General Indemnities | 70 |
18 | Miscellaneous | 72 |
19 | Law and Jurisdiction | 76 |
SCHEDULE 1
|
78 | |
The
Banks, the Commitments and the Proportionate Shares
|
78 | |
SCHEDULE
2
|
80 | |
The
Vessels
|
80 | |
SCHEDULE
3
|
81 | |
Reduction
Schedule
|
81 | |
SCHEDULE
4
|
82 | |
Form
of Transfer Certificate English Version
|
82 | |
Form
of Transfer Certificate Spanish Version
|
85 | |
SCHEDULE
5
|
89 | |
Form
of Drawdown Notice
|
89 | |
SCHEDULE
6
|
91 | |
Calculation
of the Mandatory Cost
|
91 | |
SCHEDULE
7
|
94 | |
Form
of Compliance Certificate : Teekay LNG Partners L.P.
|
94 |
21
|
Miscellaneous…………………………………………………………………………..
|
70
|
22
|
Law
and Jurisdiction…………………………………………………………………...
|
71
|
SCHEDULE
1: The Lenders and the Commitments………………………………………….
|
73
|
|
SCHEDULE
2: Conditions Precedent and Subsequent………………………………………
|
74
|
|
Part
I: Conditions precedent to the First Drawdown Date…………………………
|
74
|
|
Part
II: Conditions subsequent to the First Drawdown Date………………………
|
77
|
|
Part
III: Conditions precedent to the Step-up Date………………………………..
|
78
|
|
Part
IV: Conditions subsequent to the Step-up Date……………………………….
|
80
|
|
SCHEDULE
3: Calculation of Mandatory Cost……………………………………………...
|
81
|
|
SCHEDULE
4: Form of Drawdown Notice………………………………………………….
|
83
|
|
SCHEDULE
5: Form of Transfer Certificate…………………………………………………
|
84
|
|
SCHEDULE
6: Form of Compliance Certificate……………………………………………..
|
87
|
|
SCHEDULE
7: The Vessels…………………………………………………………………..
|
88
|
|
Part
I: The Initial Vessels………………………………………………………….
|
88
|
|
Part
II: The Step-up Vessels……………………………………………………….
|
89
|
|
SCHEDULE
8: Reductions…………………………………………………………………...
|
90
|
(1)
|
TEEKAY
OFFSHORE OPERATING L.P.
,
a
limited partnership formed and existing under the laws of the Republic
of
the Marshall Islands whose registered office is at The Trust Company
Complex, Ajeltake Island, PO Box 1405 Majuro, The Marshall Islands,
MH96960 (the
"
Borrower
");
and
|
(2)
|
the
banks listed in Schedule 1, each acting through its office at the
address
indicated against its name in Schedule 1 (together the
"
Lenders
"
and each a "
Lender
");
and
|
(3)
|
DNB
NOR BANK ASA
,
acting as agent (in that capacity the
"
Agent
");
|
(4)
|
DNB
NOR BANK ASA, NORDEA BANK NORGE ASA, New York Branch
and
FORTIS CAPITAL CORP.
acting
as mandated lead arrangers (in that capacity each an "
MLA
"
and together the
"MLAs
");
|
(5)
|
DNB
NOR BANK ASA
and
NORDEA
BANK NORGE ASA
,
New
York Branch
acting as bookrunners (in that capacity each a "
Bookrunner
"
and together the "
Bookrunners
"
);
and
|
(6)
|
DEUTSCHE
SCHIFFSBANK AKTIENGESELLSCHAFT
acting as security agent (in that capacity the "
Security
Agent
").
|
1
|
Definitions
and Interpretation
|
(a)
|
any
release of Environmentally Sensitive Material from a Vessel;
or
|
(b)
|
any
incident in which Environmentally Sensitive Material is released
from a
vessel other than a Vessel and which involves a collision between
a Vessel
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the relevant Vessel is actually
or potentially liable to be arrested, attached, detained or injuncted
and/or where any guarantor, any manager (or any sub-manager of such
Vessel) or any of its officers, employees or other persons retained
or
instructed by it (or such sub-manager) are at fault or allegedly
at fault
or otherwise liable to any legal or administrative action;
or
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from such Vessel and in connection with which that
Vessel
is actually or potentially liable to be arrested and/or where any
guarantor, any manager (or any sub-manager of the relevant Vessel)
or any
of its officers, employees or other persons retained or instructed
by it
(or such sub-manager) are at fault or allegedly at fault or otherwise
liable to any legal or administrative
action.
|
(a)
|
have
as a purpose or effect the protection of, and/or prevention of harm
or
damage to, the environment;
|
(b)
|
relate
to the carriage of Environmentally Sensitive Material or to actual
or
threatened releases of Environmentally Sensitive
Material;
|
(c)
|
provide
remedies or compensation for harm or damage to the environment;
or
|
(d)
|
relate
to Environmentally Sensitive Materials or health or safety
matters.
|
"
Event
of Default
"
means any of the events or circumstances set out in
Clause 13.1.
|
(a)
|
the
applicable Screen Rate; or
|
(b)
|
(if
no Screen Rate is available for any Interest Period) the arithmetic
mean
of the rates (rounded upwards to four decimal places) as supplied
to the
Agent at its request quoted by the Reference Banks (or by two of
them if
one is unable to quote) to leading banks in the London interbank
market,
|
(a)
|
the
financial condition, assets, prospects or business of any Security
Party
or on the consolidated financial condition, assets, prospects or
business
of the Group;
|
(b)
|
the
ability of any Security Party to perform and comply with its obligations
under any Security Document or to avoid any Event of
Default;
|
(c)
|
the
validity, legality or enforceability of any Security Document;
or
|
(d)
|
the
validity, legality or enforceability of any security expressed to
be
created pursuant to any Security Document or the priority and ranking
of
any such security,
|
(i)
|
in
respect of any Subsidiary of the Borrower, only the value of its
assets as
multiplied by the Relevant Percentage in respect of such Subsidiary
shall
be taken into
account
in the computation of the value of the assets of the
Group;
|
(ii)
|
a
statement by the auditors of the Borrower to the effect that,
in their
opinion, a Subsidiary of the Borrower is or is not or was or
was not at
any particular time a
Material
Subsidiary shall, in the absence of manifest error, be conclusive
and
binding on each of the parties to this Agreement.
|
(i)
|
prior
to the Step-up Date, five hundred and twenty million Dollars
($520,000,000); and
|
(ii)
|
on
or after the Step-up Date, nine hundred and forty million Dollars
($940,000,000),
|
(a)
|
lawfully
enter into and perform its obligations under the Security Documents
to
which it is party;
|
(b)
|
ensure
the legality, validity, enforceability or admissibility in evidence
in
England and, if different, its jurisdiction of incorporation, of
such
Security Documents to which it is party;
and
|
(c)
|
carry
on its business from time to time.
|
(a)
|
the
amount calculated in accordance with GAAP shown as each of "long
term
debt", "short term debt" and "current portion of long term debt"
on the
latest consolidated balance sheet of the Borrower;
and
|
(b)
|
the
amount of any liability in respect of any lease or hire purchase
contract
entered into by the Borrower or any of its Subsidiaries which would,
in
accordance with GAAP, be treated as a finance or capital lease (excluding
any amounts applicable to leases to the extent that the lease obligations
are secured by a security deposit which is held on the balance sheet
under
"
Restricted
Cash
").
|
(a)
|
an
actual, constructive, arranged, agreed or compromised total loss
of that
Vessel; or
|
(b)
|
the
requisition for title or compulsory acquisition, nationalisation
or
expropriation of that Vessel by or on behalf of any government or
other
authority (other than by way of requisition for hire);
or
|
(c)
|
the
capture, seizure, arrest, detention or confiscation of that Vessel
unless
the Vessel is released and returned to the possession of the Owner
within
ninety (90) days after the capture, seizure, arrest, detention or
confiscation in question.
|
(a)
|
all
benefits derived by the Security Agent from Clause 10;
and
|
(b)
|
all
benefits arising under (including, without limitation, all proceeds
of the
enforcement of) each of the Security
Documents,
|
1.2
|
In
this Agreement:
|
1.2.1
|
words
denoting the plural number include the singular and vice
versa;
|
1.2.2
|
words
denoting persons include corporations, partnerships, associations
of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
|
1.2.3
|
references
to Recitals, Clauses and Schedules are references to recitals, clauses
and
schedules to or of this Agreement;
|
1.2.4
|
references
to this Agreement include the Recitals and the
Schedules;
|
1.2.5
|
the
headings and contents page(s) are for the purpose of reference only,
have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
|
1.2.6
|
references
to any document (including, without limitation, to all or any of
the
Relevant Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from
time
to time;
|
1.2.7
|
references
to statutes or provisions of statutes are references to those statutes,
or
those provisions, as from time to time amended, replaced or
re-enacted;
|
1.2.8
|
references
to any Finance Party include its successors, transferees and assignees;
|
1.2.9
|
a
time of day (unless otherwise specified) is a reference to New York
time.
|
1.3
|
Offer
letter
|
2
|
The
Loan
and
its
Purpose
s
|
2.1
|
Amount
Subject to the terms of this Agreement, each of the Lenders agrees
to make
available to the Borrower
its
Commitment of
a
revolving credit in an aggregate amount not exceeding the Maximum
Amount
at any one time
.
|
2.2
|
Finance
Parties' obligations
The
obligations of each Finance Party under the Finance Documents are
several.
Failure by a Finance Party to perform its obligations under the Finance
Documents does not affect the obligations of any other party to the
Finance Documents. No Finance Party is responsible for the obligations
of
any other Finance Party under the Finance
Documents.
|
2.3
|
Purpose
s
The
Borrower shall apply
the
Loan for the purpose referred to in the Recital
.
|
2.4
|
Monitoring
No
Finance Party is bound to monitor or verify the application of any
amount
borrowed under this Agreement.
|
3
|
Conditions
of Utilisation
|
3.1
|
Conditions
precedent
Before
any Lender shall have any obligation to advance any Drawing under
the
Facility the Borrower shall deliver or cause to be delivered to or
to the
order of the Agent
all
of the documents and other
evidence listed in Part I of Schedule
2.
|
3.2
|
Further
conditions precedent
The
Lenders will only be obliged to advance
a
Drawing
if
on the date of the Drawdown Notice and on the proposed Drawdown
Date:
|
3.2.1
|
no
Default is continuing or would result from the advance of
that
Drawing
;
and
|
3.2.2
|
the
representat
ions
made by the Borrower under Clause 11 are true in all material
respects.
|
3.3
|
Drawing
limit
The
Lenders will only be obliged to advance a Drawing
if:
|
3.3.2
|
that
Drawing will not result in there being more than seven Drawings
outstanding at any one time;
|
3.3.3
|
that
Drawing is not less than five million Dollars ($5,000,000) and
in an
integral multiple of one million Dollars ($1,000,000);
and
|
3.3.4
|
that
Drawing will not increase the outstanding amount of the Loan
to a sum in
excess of the Maximum Amount.
|
3.4
|
Facility
Reduction
|
3.4.1
|
The
amount of the Facility available to the Borrower for drawing
under this
Agreement shall, subject to the provisions of Clause 3.4.5, be
five
hundred and twenty million Dollars ($520,000,000) prior to the
Step-up
Date and nine hundred and forty million Dollars ($940,000,000)
during the
period from the Step-up Date until the first Reduction Date.
On the
Reduction Dates the amount of the Facility available for drawing
shall be
reduced by the amounts set out in Schedule 8 (the "
Initial
Reduction Amounts
").
On the Maturity Date the Facility available shall be reduced
to zero.
Subject to the proviso hereto, the mandatory reductions in the
amount of
the Facility available for drawing required pursuant to this
Clause will
be made in the amounts and at the times specified whether or
not the
Maximum Amount is reduced pursuant to Clause 3.4.2, Clause 3.4.3,
Clause
3.4.4, Clause 6.1 or Clause 7.9. PROVIDED ALWAYS THAT any reductions
pursuant to Clause 3.4.2 (voluntary reductions), Clause 3.4.3
(sale) or
Clause 3.4.4 (Total Loss) shall be applied to the remaining mandatory
reductions hereunder on a pro rata
basis.
|
3.4.2
|
The
Borrower may voluntarily cancel the Maximum Amount in whole
or in part in
an amount of not less than five million Dollars ($5,000,000)
such amount
to be in integral multiples of one million Dollars ($1,000,000)
(or as
otherwise may be agreed by the Agent), provided that it has
first given to
the Agent not fewer than five (5) Business Days' prior written
notice
expiring on a Business Day (the "
Cancellation
Date
")
of its desire to reduce the Maximum Amount; such notice once
received by
the Agent shall be irrevocable and shall oblige the Borrower
to make
payment of all interest and Commitment Commission accrued
on the amount so
cancelled up to and including the Cancellation Date together
with any
Break Costs in respect of such cancelled amount if the Cancellation
Date
is not the final day of an Interest Period. Any such reduction
in the
Maximum Amount shall not be reversed. If, as a result of
any such
cancellation, the Loan outstanding would exceed the Maximum
Amount, the
Borrower shall, on the Cancellation Date, prepay such amount
of the Loan
as will ensure that the Loan outstanding is not greater than
the Maximum
Amount.
|
3.4.3
|
In
the event of a sale or disposal of a Vessel or the Agent
having received
not less than 5 Business Days' notice from the Borrower
requesting that
the security relating to a Vessel be released and discharged
(a "
Released
Vessel
"),
the Maximum Amount shall be reduced by the Relevant Reduction
Amount
applicable to that Vessel, such reduction to be applied
on a pro rata
basis against the Initial Reduction Amounts as reduced
from time to time
in accordance with this clause 3.4. Such reduction shall
be made in the
case of a sale or disposal of such Vessel on the date
of such sale or
disposal and in the case of a Released Vessel on the
date proposed by the
Borrower for release and discharge of the security relating
to that Vessel
unless the Vessel or Released Vessel in question is replaced
on or prior
to the sale, disposal or release with a Replacement Vessel
and in such
case of replacement any security held by the Agent (whether
directly or
indirectly) from the Owner and over such Vessel or Released
Vessel is
reconstituted immediately after the sale to the new owner
or after the
release and discharge of security (as the case may be)
or over the
Replacement Vessel in substantially identical form, and
the Agent obtains
favourable legal opinions in respect of such reconstituted
security. If,
as a result of any reduction in the Maximum Amount pursuant
to this
Clause, the Loan outstanding would exceed the Maximum
Amount, the Borrower
shall, on the date of the sale, disposal or replacement,
prepay such
amount of the Loan as will ensure that the Loan outstanding
is not greater
than the Maximum Amount. Any such prepayment shall oblige
the Borrower to
make payment of all interest and Commitment Commission
accrued on the
amount so reduced up to and including the date of reduction
together with
any Break Costs in respect of such reduced amount if
the date of such
reduction is not the final day of an Interest Period.
Any such reduction
in the Maximum Amount shall not be
reversed.
|
3.4.4
|
In
the event that any Vessel becomes a Total Loss, on
the earlier to occur of
(a) the date of receipt of the proceeds of the Total
Loss and (b) the date
falling one hundred and eighty (180) days after the
occurrence of the
Total Loss (the "
Reduction
Date
"),
the Maximum Amount shall (subject to the proviso
hereto) be reduced by the
Relevant Reduction Amount in respect of such Vessel.
Any such reductions
in the Maximum Amount shall not be reversed. If,
as a result of any
reduction in the Maximum Amount pursuant to this
Clause the Loan
outstanding would exceed the Maximum Amount, the
Borrower shall, on the
earlier to occur of (i) the date on which the Owner
receives the proceeds
of such Total Loss and (ii) the one hundred and eightieth
day after the
date of such Total Loss occurring, prepay such amount
of the Loan as will
ensure that the Loan outstanding is equal to or less
than the Maximum
Amount. Any such prepayment shall not be reborrowed
and Clause 8.3 shall
apply to any such prepayment. PROVIDED ALWAYS that
if there is an
investment in a Replacement Vessel on or prior to
the Reduction Date, and
a guarantee from the owner of the Replacement Vessel
(in substantially the
same form as the Guarantee or such other form as
the Majority Lenders may
require at that time) and security over such Replacement
Vessel acceptable
to the Majority Lenders in their absolute discretion
is also executed and
delivered either prior to or on the Reduction Date,
then the reduction in
the Maximum Amount shall not
apply.
|
3.4.5
|
To
the extent that repayments or prepayments made
by the Borrower to the
Agent in accordance with this Agreement reduce
the Loan outstanding to
less than the Maximum Amount, the Borrower shall
again be entitled to make
Drawings up to the Commitment Termination Date
in accordance with and
subject to the terms of this Agreement. Any part
of the Facility which is
undrawn on the Commitment Termination Date shall
be automatically
cancelled.
|
3.4.6
|
Simultaneously
with each reduction of the Maximum Amount
in accordance with Clause 3.4.1,
Clause 3.4.2, Clause 3.4.3 or Clause 3.4.4
(as the case may be), the
Commitment of each Lender will reduce so
that the Commitments of the
Lenders in respect of the reduced Maximum
Amount remain in accordance with
their respective Proportionate
Shares.
|
3.5
|
Termination
Date
No
Lender shall be under any obligation to advance all or any part
of its
Commitment after the Commitment Termination
Date.
|
3.6
|
Conditions
subsequent
The Borrower undertakes to deliver or to cause to be delivered
to the
Agent:
|
3.6.1
|
on,
or as soon as practicable after, the
First
Drawdown
Date the additional documents and other evidence listed in Part
II of
Schedule 2; and
|
3.6.2
|
on,
or as soon as practicable after, the Step-up Date the additional
documents
and other evidence listed in Part IV of Schedule
2.
|
3.7
|
No
Waiver
If
the Lenders in their sole discretion agree to advance a
Drawing
to
the Borrower before all of the documents and evidence required
by Clause
3.1 have been delivered to or to the order of the Agent, the Borrower
undertakes to deliver all outstanding documents and evidence to
or to the
order of the Agent no later than the date specified by the
Agent.
|
3.8
|
Form
and content
All documents and evidence delivered to the Agent under this Clause
3
shall:
|
3.8.1
|
be
in form and substance reasonably acceptable to the Agent;
and
|
3.8.2
|
if
reasonably required by the Agent, be certified, notarised, legalised
or
attested in a manner acceptable to the
Agent.
|
4.1
|
Drawdown
Request
The
Borrower may request a Drawing to be advanced in one amount on
any
Business Day prior to the Commitment Termination Date by delivering
to the
Agent a duly completed Drawdown Notice not more than ten (10) and
not
fewer than three (3) Business Days before the proposed Drawdown
Date save
in respect of a Same Day
Drawing.
|
4.2
|
Lenders'
participation
Subject
to Clauses 2 and 3, the Agent shall promptly notify each Lender
of the
receipt of
a
Drawdown Notice, following which each Lender shall advance its
Proportionate
Share of the relevant Drawing
to
the Borrower through the Agent on the
relevant
Drawdown Date.
|
5
|
Repayment
|
5.1
|
Repayment
of each Drawing
The
Borrower agrees to repay each Drawing to the Agent for the account
of the
Lenders on the last day of the Interest Period in respect of that
Drawing
unless the Borrower selects a further Interest Period for that
Drawing in
accordance with Clause 7 provided that the Borrower shall not be
permitted
to select such a further Interest Period if a Default has occurred
and
shall then be obliged to repay such Drawing on the last day of
its then
current Interest Period. The Borrower shall on the Maturity Date repay to
the Agent as agent for the Lenders all Facility
Outstandings.
|
5.2
|
Reborrowing
Amounts
of the Loan which are repaid or prepaid shall be available for
reborrowing
in accordance with Clause 3 prior to the Commitment Termination
Date
.
|
6
|
Prepayment
|
6.1
|
Illegality
If
it becomes unlawful in any jurisdiction for a Lender to fund or maintain
its Commitment as contemplated by this Agreement or to fund or maintain
the Loan
:
|
6.1.1
|
that
Lender shall promptly notify the Agent of that event;
|
6.1.2
|
upon
the Agent notifying the Borrower,
the
Commitment of that Lender (to the extent not already advanced)
will be
immediately cancelled;
and
|
6.1.3
|
the
Borrower shall repay that Lender's Proportionate Share of any Drawing
on
the last day of its current Interest Period or, if earlier, the
date
specified by that Lender in the notice delivered to the Agent and
notified
by the Agent to the Borrower (being no earlier than the last day
of any
applicable grace period permitted by law) and the Maximum Amount
shall be
reduced by the amount of that Lender's Commitment in the Loan.
Prior to the date on which repayment is required to be made under
this
Clause 6.1.3 the affected Lender shall negotiate in good faith
with the
Borrower to find an alternative method or lending base in order
to
maintain the Facility.
|
6.2
|
Voluntary
prepayment of Loan
The Borrower may prepay the whole or any part of a Drawing (but,
if in
part, being an amount that reduces that Drawing by a minimum amount
of
five million Dollars ($5,000,000)) provided that
it
gives the Agent not less than three (3) Business Days' prior
notice.
|
6.3
|
Restrictions
Any
notice of prepayment given under this Clause 6 shall be irrevocable
and,
unless a contrary indication appears in this Agreement, shall specify
the
date or dates upon which the relevant prepayment is to be made
and the
amount of that prepayment.
|
6.4
|
Mandatory
Prepayment
If
at any time the Facility Outstandings shall exceed the Maximum Amount
the
Borrower shall immediately prepay to the Agent on behalf of the Lenders
such amounts as will ensure that the Facility Outstandings do not
exceed
the Maximum Amount and shall pay to the Lenders all interest accrued
on
the amount prepaid up to and including the date on which such prepayment
occurred.
|
7.1
|
Interest
Periods
The period during which each Drawing shall be outstanding under
this
Agreement shall be an Interest Period of one, three or six months'
duration, as selected by the Borrower in the Drawdown Notice in
respect of
the Drawing in question, or such other duration as may be agreed
by the
Agent (acting on the instructions of all the Lenders).
Not more than five one (1) month Interest Periods may be selected
by the
Borrower in each twelve (12) month
period.
|
7.2
|
Beginning
and end of Interest Periods
The
first Interest Period in respect of each Drawing shall begin on
the
Drawdown Date of that Drawing and shall end on the last day of
the
Interest Period selected in accordance with Clause 7.1. Any subsequent
Interest Period selected in respect of each Drawing shall commence
on the
day following the last day of its previous Interest Period and
shall end
on the last day of its current Interest Period selected in accordance
with
Clause 7.1.
|
7.3
|
Interest
Periods to meet Maturity Date
If
an Interest Period for a Drawing would otherwise expire after the
Maturity
Date, the Interest Period for that Drawing shall expire on the
Maturity
Date
.
|
7.4
|
Non-Business
Days
If
an Interest Period would otherwise end on a day which is not a
Business
Day, that Interest Period will instead end on the next Business
Day in
that calendar month (if there is one) or the preceding Business
Day (if
there is not).
|
7.5
|
Interest
rate
During each Interest Period interest shall accrue on
the
relevant Drawing
at
the rate determined by the Agent to
be
|
(i)
|
the
WSJ Prime Rate in the case of a Same Day
Drawing; or
|
(ii)
|
in
all other cases the aggregate of (a) the
Margin,
(b) LIBOR and (c) the Mandatory Cost, if
applicable.
|
7.6
|
Failure
to select Interest Period
If
the Borrower at any time fails to select or agree an Interest Period
in
accordance with Clause 7.1
,
the interest rate applicable shall be three (3)
months.
|
7.7
|
Accrual
and payment of interest
Interest
shall accrue from day to day, shall be calculated on the basis
of a 360
day year and the actual number of days elapsed (or, in any circumstance
where market practice differs, in accordance with the prevailing
market
practice) and shall be paid by the Borrower to the Agent for the
account
of the Lenders on the last day of each Interest Period and, if
the
Interest Period is longer than three months, on the dates falling
at three
monthly intervals after the first day of that Interest
Period.
|
7.8
|
Default interest If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date, subject to any applicable grace period, up to the date of actual payment (both before and after judgment) at a rate which is one point five per cent (1.5%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Drawing for successive Interest Periods, each selected by the Agent (acting reasonably). Any interest accruing under this Clause 7. 8 shall be immediately payable by the Borrower on demand by the Agent. If unpaid, any such interest will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
7.9
|
Changes
in market circumstances
If
at any time the Agent determines (which determination shall be
final and
conclusive and binding on the Borrower) that, by reason of changes
affecting the London interbank market, adequate and fair means
do not
exist for determining the rate of interest on
a
Drawing
for any Interest Period:
|
7.9.1
|
the
Agent shall give notice to the Lenders and the Borrower of the
occurrence
of such event; and
|
7.9.2
|
the
rate of interest on each Lender's Commitment
in
the relevant Drawing
for that Interest Period shall be the rate per annum which is the
sum
of:
|
(a)
|
the
Margin; and
|
(b)
|
the
rate notified to the Agent by that Lender as soon as practicable,
and in
any event before interest is due to be paid in respect of that
Interest
Period, to be that which expresses as a percentage rate per annum
the cost
to that Lender of funding its Commitment
in
the relevant Drawing
from whatever source it may reasonably select;
and
|
(c)
|
the
Mandatory Cost, if any, applicable to that
Lender's
|
7.9.3
|
the
Agent on behalf of the Lenders will negotiate with the Borrower
in good
faith with a view to modifying this Agreement to provide a substitute
basis for determining the rate of interest which is financially
a
substantial equivalent to the basis provided for in this
Agreement;
|
7.9.4
|
any
substitute basis agreed pursuant to Clause 7.
9
.3
shall be binding on all the parties to this Agreement and shall
apply to
all Commitments
in
the relevant Drawing
;
and
|
7.9.5
|
if,
within thirty (30) days of the giving of the notice referred to
in Clause
7.9.1, the Borrower and the Agent fail to agree in writing on a
substitute
basis for determining the rate of interest in respect of the relevant
Drawing, the relevant Lender shall cease to be obliged to advance
its
Proportionate Share of that Drawing, but, if it has already been
advanced,
the Borrower will immediately prepay that Proportionate Share of
that
Drawing, together with any Break Costs, and the Maximum Amount
shall be
reduced by the amount of that Lender's Proportionate Share of that
Drawing
.
|
7.10
|
Determinations
conclusive
The
Agent shall promptly notify the Borrower of the determination of
a rate of
interest under this Clause 7 and each such determination shall
(save in
the case of manifest error) be final and
conclusive.
|
8
|
Indemnities
|
8.1
|
Transaction
expenses
The
Borrower will, within fourteen (14) days of the Agent's written demand,
pay the Agent (for the account of the Finance Parties) the amount
of all
reasonable out of pocket costs and expenses (including legal fees
and
Value Added Tax or any similar or replacement tax if applicable)
reasonably incurred by the Finance Parties or any of them in connection
with:
|
8.1.1
|
the
negotiation, preparation, printing, execution and registration
of the
Finance Documents (whether or not any Finance Document is actually
executed or registered and whether
or
not
a
Drawing
is
advanced
);
|
8.1.2
|
any
amendment, addendum or supplement to any Finance Document (whether
or not
completed); and
|
8.1.3
|
any
other document which may at any time be required by a Finance Party
to
give effect to any Finance Document or which a Finance Party is entitled
to call for or obtain under any Finance
Document.
|
8.2
|
Funding
costs
The Borrower shall indemnify each Finance Party, by payment to
the Agent
(for the account of that Finance Party) on the Agent's written
demand,
against all losses and costs incurred or sustained by that Finance
Party
if, for any reason due to a default or other action by the
Borrower
,
a
Drawing
is
not ad
vanced
to the Borrower after the relevant Drawdown Notice has been given
to the
Agent, or is advanced on a date other than that requested in the
Drawdown
Notice.
|
8.3
|
Break
Costs
The Borrower shall indemnify each Finance Party, by payment to
the Agent
(for the account of that Finance Party) on the Agent's written
demand,
against all documented costs, losses, premiums or penalties incurred
by
that Finance Party as a result of its receiving any prepayment
of all or
any part of
a
Drawing
(whether pursuant to Clause 6 or otherwise) on a day other than
the last
day of an Interest Period for
that
Drawing
,
or any other payment under or in relation to the Finance Documents
on a
day other than the due date for payment of the sum in question,
including
(without limitation) any losses or costs incurred in liquidating
or
re-employing deposits from third parties acquired to effect or
maintain
all or any part of
a
Drawing
,
and any liabilities, expenses or losses incurred by that Finance
Party in
terminating or reversing, or otherwise in connection with, any
interest
rate and/or currency swap, transaction or arrangement entered into
by that
Finance Party with any member of the Group to hedge any exposure
arising
under this Agreement, or in terminating or reversing, or otherwise
in
connection with, any open position arising under this
Agreement
.
|
8.4
|
Currency
indemnity
In
the event of a Finance Party receiving or recovering any amount payable
under a Finance Document in a currency other than the Currency of
Account,
and if the amount received or recovered is insufficient when converted
into the Currency of Account at the date of receipt to satisfy in
full the
amount due, the Borrower shall, on the Agent's written demand, pay
to the
Agent for the account of the relevant Finance Party such further
amount in
the Currency of Account as is sufficient to satisfy in full the amount
due
and that further amount shall be due to the Agent on behalf of the
relevant Finance Party as a separate debt under this
Agreement.
|
8.5
|
Increased
costs (subject to Clause 8.6)
If,
by reason of the introduction of any law, or any change in any law,
or any
change in the interpretation or administration of any law, or compliance
with any request or requirement from any central bank or any fiscal,
monetary or other authority occurring after the date of this
Agreement:
|
8.5.1
|
a
Finance Party (or the holding company of a Finance Party) shall be
subject
to any Tax with respect to payment of all or any part of the Indebtedness
(other than Tax on overall net income);
or
|
8.5.2
|
the
basis of Taxation of payments to a Finance Party in respect of all
or any
part of the Indebtedness shall be changed;
or
|
8.5.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans
by
any branch of a Finance Party; or
|
8.5.4
|
the
manner in which a Finance Party allocates capital resources to its
obligations under this Agreement or any ratio (whether cash, capital
adequacy, liquidity or otherwise) which a Finance Party is required
or
requested to maintain shall be affected;
or
|
8.5.5
|
there
is imposed on a Finance Party (or on the holding company of a Finance
Party) any other condition in relation to the Indebtedness or the
Finance
Documents;
|
8.6
|
Exceptions
to increased costs
Clause
8.5 does not apply to the extent any additional cost or reduced return
referred to in that Clause is:
|
8.6.1
|
compensated for by a payment made under Clause 8.10; or |
8.6.2
|
compensated for by a payment made under Clause 17.3; or |
8.6.3
|
compensated for by the payment of the Mandatory Cost; or |
8.6.4
|
attributable
to the wilful breach by the relevant Finance Party (or the holding
company
of that Finance Party) of any law or
regulation.
|
8.7
|
Events
of Default
The
Borrower shall indemnify each Finance Party from time to time, by
payment
to the Agent (for the account of that Finance Party) on the Agent's
written demand, against all losses and costs incurred or sustained
by that
Finance Party as a consequence of any Event of Default.
|
8.8
|
Enforcement
costs
The Borrower shall pay to the Agent (for the account of each Finance
Party) on the Agent's written demand the amount of all costs and
expenses
(including legal fees) incurred by a Finance Party in connection
with the
enforcement of, or the preservation of any rights under, any Finance
Document including (without limitation) any losses, costs and expenses
which that Finance Party may from time to time sustain, incur or
become
liable for by reason of that Finance Party being mortgagee of a Vessel
and/or a lender to the Borrower, or by reason of that Finance Party
being
deemed by any court or authority to be an operator or controller,
or in
any way concerned in the operation or control, of a Vessel. No such
indemnity will be given where any such loss or cost has occurred
due to
gross negligence or wilful misconduct on the part of that Finance
Party;
however, this shall not effect the right of any other Finance Party
to
receive such indemnity.
|
8.9
|
Other
costs
The Borrower shall pay to the Agent (for the account of each Finance
Party) on the Agent's written demand the amount of all sums which
a
Finance Party may pay or become actually or contingently liable for
on
account of the Borrower in connection with a Vessel (whether alone
or
jointly or jointly and severally with any other person) including
(without
limitation) all sums which that Finance Party may pay or guarantees
which
it may give in respect of the Insurances, any expenses incurred by
that
Finance Party in connection with the maintenance or repair of a Vessel
or
in discharging any lien, bond or other claim relating in any way
to a
Vessel, and any sums which that Finance Party may pay or guarantees
which
it may give to procure the release of a Vessel from arrest or
detention.
|
8.10
|
Taxes
The
Borrower shall pay all Taxes to which all or any part of the Indebtedness
or any Finance Document may be at any time subject (other than Tax
on a
Finance Party's overall net income) and shall indemnify the Finance
Parties, by payment to the Agent (for the account of the Finance
Parties)
on the Agent's written demand, against all liabilities, costs, claims
and
expenses resulting from any omission to pay or delay in paying any
such
Taxes.
|
9
|
Fees
|
9.1
|
Commitment
fee
The Borrower shall pay to the Agent (for the account of the Lenders
in
proportion to their Commitments) a fee computed at the rate of
thirty two
point five per cent (32.5%) of the Margin on the undrawn and uncancelled
amount of the Maximum Amount from time to time from the date of
this
Agreement until the Commitment Termination Date. The accrued commitment
fee is payable on the last day of each successive period of three
months
from the Execution Date and on the Commitment Termination
Date.
|
9.2
|
Other
fees
The Borrower shall pay to the Agent the fees
in
the amount and at the times agreed in a Fee
Letter.
|
10
|
Security
and Application of
Moneys
|
10.1
|
Security
Documents
As
security for the payment of the Indebtedness, the Borrower shall
execute
and deliver to the Security Agent or cause to be executed and delivered
to
the Security Agent the following documents in such forms and containing
such terms and conditions as the Security Agent shall
require:
|
10.1.1
|
a
first priority statutory mortgage over each of the Vessels together
with a
collateral deed of covenants;
|
10.1.2
|
a
first priority deed or deeds of assignment of the Insurances, Earnings,
Charter Rights (if applicable)
and Requisition Compensation of each of the Vessels, and of the benefit
of
any relevant Charterer's Assignment;
and
|
10.1.3
|
an
on demand guarantee and indemnity from the
Guarantor;
|
10.2
|
Remittance
of Earnings
Immediately
upon the occurrence of an Event of Default the Borrower shall procure
that
all Earnings are paid to such account(s) as the Agent shall from
time to
time specify by notice in writing to the
Borrower.
|
10.3
|
General
application of moneys
Whilst an Event of Default is continuing unremedied and unwaived
the
Borrower irrevocably authorises the Agent and the Security Agent
to apply
all sums which either of them may
receive:
|
10.3.1
|
pursuant
to a sale or other disposition of a Vessel or any right, title or
interest
in the Vessel; or
|
10.3.2
|
by
way of payment of any sum in respect of the Insurances, Earnings,
Charter
Rights or Requisition Compensation;
or
|
10.3.3
|
otherwise
arising under or in connection with any Security
Document,
|
(i)
|
first in payment of all outstanding fees and expenses of the Agent and the Security Agent; |
(ii) | secondly in or towards payment of all outstanding interest hereunder; |
(iii)
|
thirdly
in or towards payment of all outstanding principal
hereunder;
|
(iv) |
fourthly
in or towards payment of all other
Indebtedness hereunder;
|
(v) |
fifthly
the balance, if any, shall be remitted
to the Borrower or whoever may be entitled
thereto.
|
11
|
Representations
and
Warranties
|
11.1
|
Status
and Due Authorisation
Each
of the Security Parties is a corporation or limited partnership duly
incorporated or formed under the laws of its jurisdiction of
incorporation, organisation or formation (as the case may be) with
power
to enter into the Security Documents and to exercise its rights and
perform its obligations under the Security Documents and all corporate
and
other action required to authorise its execution of the Security
Documents
and its performance of its obligations thereunder has been duly
taken.
|
11.2
|
No
Deductions or Withholding
Under the laws of the Security Parties' respective jurisdictions
of
incorporation or formation in force at the date hereof, none of the
Security Parties will be required to make any deduction or withholding
from any payment it may make under any of the Security
Documents.
|
11.3
|
Claims
Pari Passu
Under the laws of the Security Parties' respective jurisdictions
of
incorporation or formation in force at the date hereof, the Indebtedness
will, to the extent that it exceeds the realised value of any security
granted in respect of the Indebtedness, rank at least
pari
passu
with all the Security Parties' other unsecured indebtedness save
that
which is preferred solely by any bankruptcy, insolvency or other
similar
laws of general application.
|
11.4
|
No
Immunity
In
any proceedings taken in any of the Security Parties' respective
jurisdictions of incorporation or formation in relation to any of
the
Security Documents, none of the Security Parties will be entitled
to claim
for itself or any of its assets immunity from suit, execution, attachment
or other legal process.
|
11.5
|
Governing
Law and Judgments
In
any proceedings taken in any of the Security Parties' jurisdiction
of
incorporation or formation in relation to any of the Security Documents
in
which there is an express choice of the law of a particular country
as the
governing law thereof, that choice of law and any judgment or (if
applicable) arbitral award obtained in that country will be recognised
and
enforced.
|
11.6
|
Validity
and Admissibility in Evidence
As
at the date hereof, all acts, conditions and things required to be
done,
fulfilled and performed in order (a) to enable each of the Security
Parties lawfully to enter into, exercise its rights under and perform
and
comply with the obligations expressed to be assumed by it in the
Security
Documents, (b) to ensure that the obligations expressed to be assumed
by
each of the Security Parties in the Security Documents are legal,
valid
and binding and (c) to make the Security Documents admissible in
evidence
in the jurisdictions of incorporation or formation of each of the
Security
Parties, have been done, fulfilled and
performed.
|
11.7
|
No
Filing or Stamp Taxes
Under
the laws of the Security Parties' respective jurisdictions of
incorporation or formation in force at the date hereof, it is not
necessary that any of the Security Documents be filed, recorded or
enrolled with any court or other authority in its jurisdiction of
incorporation or formation (other than the Registrar of Companies
for
England and Wales or the relevant maritime registry, to the extent
applicable) or that any stamp, registration or similar tax be paid
on or
in relation to any of the Security
Documents.
|
11.8
|
Binding
Obligations
The obligations expressed to be assumed by each of the Security Parties
in
the Security Documents are legal and valid obligations, binding on
each of
them in accordance with the terms of the Security Documents and no
limit
on any of their powers will be exceeded as a result of the borrowings,
granting of security or giving of guarantees contemplated by the
Security
Documents or the performance by any of them of any of their obligations
thereunder.
|
11.9
|
No
Winding-up
Neither
the Borrower, the Guarantor nor any Material Subsidiary have taken
any
corporate or limited partnership action nor have any other steps
been
taken or legal proceedings been started or (to the best of the Borrower's
knowledge and belief) threatened against the Borrower, the Guarantor
or
any Material Subsidiary for its winding-up, dissolution, administration
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 which might have a material adverse effect
on
the business or financial condition of the Group taken as a
whole.
|
11.10
|
Solvency
|
11.10.1
|
Neither
the Borrower, the Guarantor nor the Group taken as a whole is
unable, or
admits or has admitted its inability, to pay its debts or has
suspended
making
payments
in respect of any of its debts.
|
11.10.2
|
Neither the Borrower, the Guarantor nor any Material Subsidiary by reason of actual or anticipated financial difficulties, has commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. |
11.10.3
|
The value of the assets of each of the Borrower, the Guarantor and the Group taken as a whole is not less than the liabilities of such entity or the Group taken as a whole (as the case may be) (taking into account contingent and prospective liabilities). |
11.10.4
|
No moratorium has been, or may, in the reasonably foreseeable future be, declared in respet of any indebtedness of the Borrower, the Guarantor or any Material Subsidiary. |
11.11
|
No
Material Defaults
|
11.11.1
|
Without prejudice to Clause 11.11.2, neither the Borrower, the Guarantor nor any Material Subsidiary 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 the business or financial condition of the Group taken as a whole. |
11.12
|
No
Material Proceedings
No
action or administrative proceeding of or before any court, arbitral
body
or agency which is not covered by adequate insurance or which might
have a
material adverse effect on the business or financial condition of
the
Group taken as a whole has been started or is reasonably likely to
be
started.
|
11.13
|
Borrower's
Accounts
All
financial statements relating to the Group required to be delivered
under
Clause 12.1, were each prepared in accordance with GAAP, give (in
conjunction with the notes thereto) a true and fair view of (in the
case
of annual financial statements) or fairly represent (in the case
of
quarterly accounts) the financial condition of the Group at the date
as of
which they were prepared and the results of the Group’s operations during
the financial period then ended.
|
11.14
|
No
Material Adverse Change
Since the publication of the last financial statements relating
to the
Group delivered pursuant to Clause 12.1, there has been no change
that has
a Material Adverse Effect.
|
11.15
|
No
Undisclosed Liabilities
As
at the date to which the Borrower's Accounts were prepared neither
the
Borrower, the Guarantor nor any Material Subsidiary had any material
liabilities (contingent or otherwise) which were not disclosed thereby
(or
by the notes thereto) or reserved against therein nor any unrealised
or
anticipated losses arising from commitments entered into by it which
were
not so disclosed or reserved against
therein.
|
11.16
|
No
Obligation to Create Security
The
execution of the Security Documents by the Security Parties and their
exercise of their rights and performance of their obligations thereunder
will not result in the existence of nor oblige the Borrower or the
Guarantor to create any Encumbrance over all or any of their present
or
future revenues or assets, other than pursuant to the Security
Documents.
|
11.17
|
No
Breach
The
execution of the Security Documents by each of the Security Parties
and
their exercise of their rights and performance of their obligations
under
any of the Security Documents do not constitute and will not result
in any
breach of any agreement or treaty to which any of them is a
party.
|
11.18
|
Security
Each of the Security Parties is the legal and beneficial owner of
all
assets and other property which it purports to charge, mortgage,
pledge,
assign or otherwise secure pursuant to each Security Document and
those
Security Documents to which it is a party create and give rise to
valid
and effective security having the ranking expressed in those Security
Documents.
|
11.19
|
Necessary
Authorisations
The Necessary Authorisations required by each Security Party, are
in full
force and effect, and each Security Party is in compliance with the
material provisions of each such Necessary Authorisation relating
to it
and, to the best of its knowledge, none of the Necessary Authorisations
relating to it are the subject of any pending or threatened proceedings
or
revocation.
|
11.20
|
Money
Laundering
Any
amount borrowed hereunder, and the performance of the obligations
of the
Security Parties under the Security Documents, will be for the
account of
members of the Group and will not involve any breach by any of
them of any
law or regulatory measure relating to "money laundering" as defined
in
Article 1 of the Directive (91/308/EEC) of the Council of the
European
Communities.
|
11.21
|
Disclosure
of material facts
The
Borrower is not aware of any material facts or circumstances which
have
not been disclosed to the Agent and which might, if disclosed, have
reasonably been expected to adversely affect the decision of a person
considering whether or not to make loan facilities of the nature
contemplated by this Agreement available to the
Borrower.
|
11.22
|
Use
of Facility
The Facility will be used for the purposes specified in the
Recital.
|
11.23
|
Representations
Limited
The representation and warranties of the Borrower in this Clause
11 are
subject to:
|
11.23.1
|
the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court; |
11.23.2
|
the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting or limiting the rights of creditors; |
11.23.3 | the time barring of claims under any applicable limitation acts; |
11.23.4 | the possibility that a court may strike out provisions for a contract as being invalid for reasons of oppression, undue influence or similar; and |
11.23.5 | any other reservations or qualifications of law expressed in any legal opinions obtained by the Agent in connection with the Facility. |
12
|
Undertakings
and
Covenants
|
12.1
|
General
Undertakings
|
12.1.1
|
Financial
statements
The
Borrower shall supply to the Agent as soon as the same become available,
but in any event within one hundred and fifty (150) days after the
end of
each of its financial years, its audited consolidated financial statements
for that financial year, together with a Compliance Certificate,
signed by
a duly authorised representative of the Borrower, setting out computations
as to compliance with Clause 12.2 as at the date as at which those
financial statements were drawn up.
|
12.1.2
|
Requirements
as to financial statements
Each
set of financial statements delivered by the Borrower under Clause
12.1.1:
|
(a)
|
shall
be certified by an authorised signatory of the Borrower as fairly
representing its financial condition as at the date as at which those
financial statements were drawn up;
and
|
(b)
|
shall
be prepared in accordance with
GAAP.
|
12.1.3
|
Interim
financial statements
The Borrower shall supply to the Agent as soon as the same become
available, but in any event within ninety (90) days after the end
of each
quarter during each of its financial years, its unaudited consolidated
quarterly financial statements for that quarter together with a Compliance
Certificate, signed by a duly authorised representative of the Borrower,
setting out computations as to compliance with Clause 12.2 as at
the date
such financial statements were drawn
up.
|
12.1.4
|
Maintenance
of Legal Validity
The Borrower shall obtain, comply with the terms of and do all that
is
necessary to maintain in full force and effect all authorisations,
approvals, licences and consents required in or by the laws and
regulations of its jurisdiction of formation and all other applicable
jurisdictions, to enable it lawfully to enter into and perform its
obligations under the Security Documents and to ensure the legality,
validity, enforceability or admissibility in evidence of the Security
Documents in its jurisdiction of incorporation or organisation and
all
other applicable jurisdictions.
|
12.1.5
|
Notification
of Default
The Borrower shall promptly, upon becoming aware of the same, inform
the
Agent in writing of the occurrence of any Event of Default and, upon
receipt of a written request to that effect from the Agent, confirm
to the
Agent that, save as previously notified to the Agent or as notified
in
such confirmation, no Event of Default has
occurred.
|
12.1.6
|
Claims
Pari Passu
The Borrower shall ensure that at all times the claims of the Finance
Parties against it under the Security Documents rank at least pari
passu
with the claims of all its other unsecured creditors save those whose
claims are preferred by any bankruptcy, insolvency, liquidation,
winding-up or other similar laws of general
application.
|
12.1.7
|
Management
of Vessels
The Borrower shall procure that the Owner shall ensure that each
of the
Vessels is at all times technically and commercially managed by a
management company controlled by Teekay Shipping Corporation or the
Borrower or such other management company as may be acceptable to
the
Agent acting on the instructions of the Majority
Lenders.
|
12.1.8
|
Classification
The Borrower shall procure that the Owner shall ensure that each
of the
Vessels maintains the highest classification required for the purpose
of
the relevant trade of such Vessel which shall be with a Pre-Approved
Classification Society, in each case, free from any overdue
recommendations and conditions affecting that Vessel’s
class.
|
12.1.9
|
Certificate
of Financial Responsibility
The Borrower shall procure that the Owner shall obtain and maintain
a
certificate of financial responsibility in relation to any Vessel
which is
to call at the United States of
America.
|
12.1.10
|
Negative Pledge The Borrower shall procure that the Owner does not create, or permit to subsist, any Encumbrance (other than pursuant to the Security Documents) over all or any part of the Vessels or the Insurances other than a Permitted Encumbrance. |
12.1.11
|
Registration
The Borrower shall procure that for the duration of the Facility
Period
the Owner shall not change or permit a change to the flag of the
Vessels
other than to a Pre-Approved Flag or under such other flag as may
be
approved by the Agent acting on the instructions of the Majority
Lenders,
such approval not to be unreasonably withheld or
delayed.
|
12.1.12
|
ISM
and ISPS Compliance
The Borrower shall procure that the Owner shall ensure that the relevant
Company complies in all material respects with the ISM Code and the
ISPS
Code or any replacements thereof and in particular (without prejudice
to
the generality of the foregoing) shall procure that the Owner shall
ensure
that the Company holds (i) a valid and current Document of Compliance
issued pursuant to the ISM Code, (ii) a valid and current SMC issued
in
respect of each Vessel pursuant to the ISM Code, and (iii) an ISSC
in
respect of each Vessel, and the Borrower shall promptly, upon request,
supply the Agent with copies of the
same.
|
12.1.13
|
Necessary
Authorisations
Without prejudice to Clause 12.1.12 or any other specific provision
of the
Security Documents relating to an Authorisation, the Borrower shall
(i)
obtain, comply with and do all that is necessary to maintain in full
force
and effect all Necessary Authorisations if a failure to do the same
may
cause a Material Adverse Effect; and (ii) promptly upon request,
supply
certified copies to the Agent of all Necessary Authorisations.
|
12.1.14
|
Compliance
with Applicable Laws
The Borrower shall comply with all applicable laws to which it may
be
subject if a failure to do the same may have a Material Adverse
Effect.
|
12.1.15
|
Loans
and Guarantees
The Borrower shall be permitted to make loans and grant credit
upon such
terms as it may determine to any other member of the Group or
to any of
the Borrower's shareholders or unitholders and may otherwise
give any
guarantee or indemnity to procure financing for other members
of the
Group, but shall not otherwise make any loans or grant any credit
(save in
the ordinary course of business) or give any guarantee or indemnity
(except pursuant to the Security Documents); Provided that the
Borrower
shall not make any such loans following the occurrence of an
Event of
Default which is continuing unremedied or unwaived.
|
12.1.16
|
Further
Assurance
The Borrower shall at its own expense, promptly take all such action
as
the Agent may reasonably require for the purpose of perfecting or
protecting any Finance Party’s rights with respect to the security created
or evidenced (or intended to be created or evidenced) by the Security
Documents.
|
12.1.17
|
Other
information
The Borrower will promptly supply to the Agent such information and
explanations as the Majority Lenders may from time to time reasonably
require in connection with the operation of the Vessels and any reasonable
financial information in connection with the Borrower, and will procure
that the Agent be given the like information and explanations relating
to
all other Security Parties.
|
12.1.18
|
Inspection
of records
The Borrower will permit the inspection of its financial records
and
accounts on reasonable notice from time to time during business hours
by
the Agent or its nominee.
|
12.1.19
|
Valuations
The Borrower will deliver to the Agent a Valuation of each of the
Vessels
(i) on the due date for delivery of the annual Borrower's Accounts
pursuant to Clause 12.1 (ii) on a sale or Total Loss of any Vessel
to
determine the Relevant Reduction Amount for the purposes of clauses
3.4.3
and 3.4.4 respectively and (iii) following the occurrence of an Event
of
Default which is continuing unremedied and unwaived on such other
occasions as the Agent may request.
|
12.1.20
|
Insurance
The
Borrower shall procure that the Owner shall ensure at its own expense
throughout the Facility Period that the Vessels are insured and operated
in accordance with the provisions set out in the relevant Security
Documents.
|
12.1.21
|
Change
of Control
The Borrower shall procure that throughout the Facility
Period:
|
(a)
|
Teekay
Shipping Corporation owns a minimum of fifty one percent (51%) of
the
voting rights in Teekay Offshore GP L.L.C, the general partner in
the
MLP;
|
(b)
|
Teekay
Shipping Corporation or the MLP owns a minimum of fifty one percent
(51%)
of the voting rights in Teekay Offshore Operating GP L.L.C., the
general
partner in the Borrower;
|
(c)
|
there
is no change in the legal or beneficial ownership of the Guarantor
from
that advised to the Agent at the date of this Agreement without the
Agent's prior written consent provided that the Agent's consent shall
not
be required if the change of Guarantor shareholding arises from a
corporate reorganisation of the Group and the legal and beneficial
ownership of the Guarantor remains wholly owned within the Group
following
such re-organisation.
|
12.1.22
|
"Know
your customer" checks
If:
|
(a)
|
the
introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this
Agreement;
|
(b)
|
any
change in the status of the Borrower after the date of this Agreement;
or
|
(c)
|
a
proposed assignment or transfer by a Lender of any of its rights
and
obligations under this Agreement to a party that is not a Lender
prior to
such assignment or transfer,
|
12.1.23
|
Intercompany
borrowings
The Borrower will only borrow from other members of the Group on
a
subordinated and unsecured basis.
|
12.2
|
Financial
covenants
|
12.2.1
|
maintain a Free Liquidity together with undrawn committed revolving credit lines available to the Group (including under this Agreement but excluding undrawn committed revolving credit lines with less than six (6) months to maturity) of not less than seventy five million Dollars ($75,000,000); and |
12.2.2
|
ensure that the aggregate of the Free Liquidity and undrawn committed revolving credit lines available to be drawn by members of the Group (including under this Agreement, but excluding undrawn committed revolving credit lines with less than six (6) months to maturity) will not be less than five per cent (5%) of the Total Debt of the Group. |
13
|
Events
of
Default
|
13.1
|
Events
of Default
Each of the events or circumstances
set out in this Clause 13.1 is an
Event of Default.
|
13.1.1
|
Borrower's
Failure
to Pay under this Agreement
The
Borrower fails to pay any amount of principal due from it under
this
Agreement at the time, in the currency and otherwise in the manner
specified herein provided that, if the Borrower can demonstrate
to the
reasonable satisfaction of the Agent that all necessary instructions
were
given to effect such payment and the non-receipt thereof is attributable
solely to an error in the banking system, such payment shall instead
be
deemed to be due, solely for the purposes of this paragraph, within
three
(3) Business Days of the date on which it actually fell due under
this
Agreement (if a payment of principal), five (5) Business Days (if
a
payment of interest) or ten (10) Business Days (if a sum payable
on
demand); or
|
13.1.2
|
Misrepresentation
Any
representation or statement made by any Security Party in any
Security
Document to which it is a party or in any notice or other document,
certificate or statement delivered by it pursuant thereto or
in connection
therewith is or proves to have been incorrect or misleading in
any
material respect, where the circumstances causing the same give
rise to a
Material Adverse Effect; or
|
13.1.3
|
Specific
Covenants
A
Security Party fails duly to perform or comply with any of
the obligations
expressed to be assumed by or procured by the Borrower under
Clauses
12.1.4, 12.1.6, 12.1.10 or 12.1.21; or
|
13.1.4
|
Financial
Covenants
The
Borrower is in breach of the Borrower's financial covenants
set out in
Clause 12.2 at any time; or
|
13.1.5
|
Other
Obligations
A
Security Party fails duly to perform or comply with any
of the obligations
expressed to be assumed by it in any Security Document
(other than those
referred to in Clause 13.1.3 or Clause 13.1.4) and such
failure is not
remedied within 30 days after the Agent has given notice
thereof to the
Borrower; or
|
13.1.6
|
Cross
Default
Any
indebtedness of any Security Party or any Material
Subsidiary is not paid
when due (or within any applicable grace period) or
any indebtedness of
any Security Party or any Material Subsidiary is declared
to be or
otherwise becomes due and payable prior to its specified
maturity where
(in either case) the aggregate of all such unpaid or
accelerated
indebtedness (i) of the Borrower is equal to or greater
than fifty million
Dollars ($50,000,000) or its equivalent in any other
currency; or (ii) of
the Guarantor, or any Material Subsidiary is equal
to or greater than
twenty five million Dollars ($25,000,000) or its equivalent
in any other
currency; or
|
13.1.7
|
Insolvency
and Rescheduling
A
Security Party or a Material Subsidiary is unable
to pay its debts as they
fall due, commences negotiations with any one or
more of its creditors
with a view to the general readjustment or rescheduling
of its
indebtedness or makes a general assignment for
the benefit of its
creditors or a composition with its creditors;
or
|
13.1.8
|
Winding-up
A
Security Party or a Material Subsidiary takes
any corporate action or
other steps are taken or legal proceedings
are started for its winding-up,
dissolution, administration or re-organisation
or for the appointment of a
liquidator, receiver, administrator, administrative
receiver, conservator,
custodian, trustee or similar officer of
it or of any or all of its
revenues or assets or any moratorium is declared
or sought in respect of
any of its indebtedness; or
|
(a)
|
Any
Security Party or a Material Subsidiary fails to comply with or
pay any
sum due from it (within 30 days of such amount falling due) under
any
final judgment or any final order made or given by any court or
other
official body of a competent jurisdiction in an aggregate (i) in
respect
of the Borrower equal to or greater than fifty million Dollars
($50,000,000) or its equivalent in any other currency; or (ii)
in respect
of the Guarantor or a Material Subsidiary equal to or greater than
twenty
five million Dollars ($25,000,000) or its equivalent in any other
currency, being a judgment or order against which there is no right
of
appeal or if a right of appeal exists, where the time limit for
making
such appeal has expired.
|
(b)
|
Any
execution or distress is levied against, or an encumbrancer
takes
possession of, the whole or any part of, the property, undertaking
or
assets of a Security Party or a Material Subsidiary in an aggregate
amount
(i) in respect of the Borrower equal to or greater than fifty
million
Dollars ($50,000,000) or its equivalent in any other currency;
or (ii) in
respect of the Guarantor or a Material Subsidiary equal to
or greater than
twenty five million Dollars ($25,000,000) or its equivalent
in any other
currency, other than any execution or distress which is being
contested in
good faith and which is either discharged within 30 days or
in respect of
which adequate security has been provided within 30 days to
the relevant
court or other authority to enable the relevant execution or
distress to
be lifted or released.
|
(c)
|
Notwithstanding
the foregoing paragraphs of this Clause 13.1.9, any levy
of any distress
on or any arrest, condemnation, confiscation, requisition
for title or
use, compulsory acquisition, seizure, detention or forfeiture
of a Vessel
(or any part thereof) or any exercise or purported exercise
of any lien or
claim on or against a Vessel where the release of or discharge
the lien or
claim on or against such Vessel has not been procured within
30 days;
or
|
13.1.10
|
Similar
Event
Any
event occurs which, under the laws of any jurisdiction,
has a similar or
analogous effect to any of those events mentioned
in Clauses 13.1.7,
13.1.8 and 13.1.9; or
|
13.1.11
|
Insurances
Insurance
is not maintained in respect of any Vessel in
accordance with the terms of
the relevant Security Document in respect of
that Vessel; or
|
13.1.12
|
Class
A
Vessel has its classification withdrawn
by the relevant classification
society PROVIDED THAT if such withdrawal
is (in the opinion of the Agent
in its absolute discretion) capable of
remedy such Event of Default shall
only occur if the Vessel's classification
is not reinstated to the
satisfaction of the Agent within twenty
one (21) days;
or
|
13.1.13
|
Environmental
Matters
|
(a)
|
Any
Environmental Claim is pending or made against the Owner or any
of the
Owner's Environmental Affiliates or in connection with a Vessel,
where
such Environmental Claim has a Material Adverse Effect.
|
(b)
|
Any
actual Environmental Incident occurs in connection with a
Vessel, where
such Environmental Incident has a Material Adverse Effect;
or
|
13.1.14
|
Repudiation
Any
Security Party repudiates any Security Document to
which it is a party or
does or causes to be done any act or thing evidencing
an intention to
repudiate any such Security Document;
or
|
13.1.15
|
Validity
and Admissibility
At
any time any act, condition or thing required
to be done, fulfilled or
performed in
order:
|
(a)
|
to
enable any Security Party lawfully to enter into, exercise
its rights
under and perform the respective obligations expressed to be
assumed by it
in the Security Documents;
|
(b)
|
to
ensure that the obligations expressed to be assumed
by each of the
Security Parties in the Security Documents are legal,
valid and binding;
or
|
(c)
|
to
make the Security Documents admissible in evidence
in any applicable
jurisdiction
|
13.1.16
|
Illegality
At
any time it is or becomes unlawful for any Security Party
to perform or
comply with any or all of its obligations under the Security
Documents to
which it is a party or any of the obligations of the
Borrower hereunder
are not or cease to be legal, valid and binding and such
illegality is not
remedied or mitigated to the satisfaction of the Agent
within thirty (30)
days after it has given notice thereof to the relevant
Security Party;
or
|
13.1.17
|
Material
Advers Change
At any time there shall occur a
change in the
business or operations of a Security Party
or a change in the
financial
condition of any
Security
Party which, in the reasonable opinion of
the Majority Lenders, materially
impairs such Security Party's
ability
to discharge its obligations under the Security
Documents
in the manner provided therein and such change,
if capable of remedy, is
not
so remedied within 15 days of the delivery
of a notice confirming such
change
by the Agent to the relevant Security
Party; or
|
13.1.18
|
Qualifications
of Financial
Statements
The
auditors of the Group qualify their report
on any audited consolidated
financial statements of the Group in any
regard which, in the reasonable
opinion of the Agent, has a Material Adverse
Effect;
or
|
13.1.19
|
Conditions
Subsequent
if
any of the conditions set out in
Clause 3.6 is not satisfied within
thirty
(30) days or such other time period
specified by the Agent in its
discretion;
or
|
13.1.20
|
Revocation
or Modification of consents etc.
if
any Necessary Authorisation which
is now or which at any time during
the
Facility Period becomes necessary
to enable any of the Security
Parties to
comply with any of their obligations
in or pursuant to any of the
Security
Documents is revoked, withdrawn
or withheld, or modified in a
manner which
the Agent reasonably considers
is, or may be, prejudicial to
the interests
of a Finance Party in a material
manner, or if such Necessary
Authorisation ceases to remain
in full force and effect;
or
|
13.1.21
|
Curtailment
of Business
if
the business of any of the
Security Parties is wholly
or materially
curtailed by any intervention
by or under authority of
any government, or
if all or a substantial part
of the undertaking, property
or assets of any
of the Security Parties is
seized, nationalised, expropriated
or
compulsorily acquired by
or under authority of any
government or any
Security Party disposes or
threatens to dispose of a
substantial part of
its business or assets;
or
|
13.1.22
|
Reduction
of Capital
if
the Borrower reduces
its committed or subscribed
capital;
or
|
13.1.23
|
C
hallenge
to Registration
if
the registration
of any Vessel or
any Mortgage becomes
void or voidable
or
liable to cancellation
or termination;
or
|
13.1.24
|
War
if
the country of registration of any
Vessel becomes involved in war (whether
or not declared) or civil war or is
occupied by any other power and the
Agent reasonably considers that, as
a result, the security conferred by
the Security Documents is materially
prejudiced;
or
|
13.1.25
|
Notice
of Termination
if
the Guarantor gives notice
to the Agent to determine
its obligations under
the
Guarantee.
|
13.2
|
Acceleration
If
an
Event
of Default is continuing unremedied or unwaived the Agent may (with
the
consent of the Majority Lenders) and shall (at the request of the
Majority
Lenders) by notice to the Borrower
cancel any part of the Maximum Amount not then advanced and
:
|
13.2.1
|
declare
that the Loan
,
together with accrued interest, and all other amounts accrued or
outstanding under the Finance Documents are immediately due and payable,
whereupon they shall become immediately due and payable;
and/or
|
13.2.2
|
declare
that the Loan
is
payable
on demand, whereupon
it
shall immediately become payable on demand by the Agent;
and/or
|
13.2.3
|
declare
the Commitments terminated and the Maximum Amount reduced to
zero.
|
14
|
Assignment
and
Sub-Participation
|
14.1
|
Lenders'
rights
A
Lender may assign any of its rights under this Agreement or transfer
by
novation any of its rights and obligations under this Agreement
to any
other branch or Affiliate of
that
Lender or (subject to the prior written consent of the Borrower,
such
consent not to be unreasonably withheld but not to be required
at any time
after an Event of Default which is continuing unremedied and unwaived)
to
any other bank or financial institution, and may grant sub-participations
in all or any part of
its
Commitment
.
|
14.2
|
Borrower's
co-operation
The
Borrower will co-operate fully with a Lender in connection with any
assignment, transfer or sub-participation by that Lender; will execute
and
procure the execution of such documents as that Lender may require
in that
connection; and irrevocably authorises any Finance Party to disclose
to
any proposed assignee, transferee or sub-participant (whether before
or
after any assignment, transfer or sub-participation and whether or
not any
assignment, transfer or sub-participation shall take place) all
information relating to the Security Parties, the Loan, the Relevant
Documents and the Vessels which any Finance Party may in its discretion
consider necessary or desirable (subject to any duties of confidentiality
applicable to the Lenders generally). Additionally, (but subject
to the
same duties of confidentiality), any Lender may disclose the size
and term
of the Facility and the names of each Security Party to any investor
or
potential investor in a securitisation (or similar transaction of
broadly
equivalent economic effect) of that Lender's rights and obligations
under
the Finance Documents.
|
14.3
|
Rights
of assignee
Any
assignee of a Lender shall (unless limited by the express terms of
the
assignment) take the full benefit of every provision of the Finance
Documents benefitting that Lender PROVIDED THAT an assignment will
only be
effective on notification by the Agent to that Lender and the assignee
that the Agent is satisfied it has complied with all necessary "Know
your
customer" or other similar checks under all applicable laws and
regulations in relation to the assignment to the
assignee.
|
14.4
|
Transfer
Certificates
If
a Lender wishes to transfer any of its rights and obligations under
or
pursuant to this Agreement, it may do so by delivering to the Agent
a duly
completed Transfer Certificate, in which event on the Transfer
Date:
|
14.4.1
|
to
the extent that that Lender seeks to transfer its rights and obligations,
the Borrower (on the one hand) and that Lender (on the other) shall
be
released from all further obligations towards the
other;
|
14.4.2
|
the
Borrower (on the one hand) and the transferee (on the other) shall
assume
obligations towards the other identical to those released pursuant
to
Clause 14.4.1; and
|
14.4.3
|
the
Agent, each of the Lenders and the transferee shall have the same
rights
and obligations between themselves as they would have had if the
transferee had been an original party to this Agreement as a
Lender
|
(a)
|
it
is satisfied it has complied with all necessary "know your customer"
or
other similar checks under all applicable laws and regulations in
relation
to the transfer to the transferee;
and
|
(b)
|
the
transferee has paid to the Agent for its own account a transfer fee
of
three thousand Dollars.
|
14.5
|
Finance
Documents
Unless
otherwise expressly provided in any Finance Document or otherwise
expressly agreed between a Lender and any proposed transferee and
notified
by that Lender to the Agent on or before the relevant Transfer Date,
there
shall automatically be assigned to the transferee with any transfer
of a
Lender's rights and obligations under or pursuant to this Agreement
the
rights of that Lender under or pursuant to the Finance Documents
(other
than this Agreement) which relate to the portion of that Lender's
rights
and obligations transferred by the relevant Transfer
Certificate.
|
14.6
|
No
assignment or transfer by the Borrower
The Borrower may not assign any of its rights or transfer any of
its
rights or obligations under the Finance
Documents.
|
14.7
|
Transfer
of the Loan Agreement by KfW
.
Notwithstanding
the provisions of Clause 14.1 KfW may transfer all its rights and
obligations under this Agreement to a KfW Subsidiary with effect
from
1 January 2008 or any later date. By signing this Agreement the
Borrower consents to such a transfer. KfW or the KfW Subsidiary will
inform the Borrower of the date on which the transfer of KfW’s rights and
obligations to the KfW Subsidiary takes effect. In this connection
the
following will apply:
|
14.7.1
|
Deductions
and Increased costs.
If,
by reason of circumstances already existing at the transfer date,
the
Borrower would be obliged to make a payment to the KfW Subsidiary
under
Clauses 8.5, 17.2 or 17.3, it need pay the KfW Subsidiary only such
an
amount as it would have been obliged to pay KfW if the transfer had
not
occurred.
|
14.7.2
|
Costs
.
KfW
will pay all costs incurred as a result of or in connection with
such
transfer.
|
14.8
|
Disclosure
of information
.
In
connection with any transfer under Clause 14.7
KfW
may disclose confidential information to the KfW Subsidiary or its
agents
or its legal advisors.
|
14.9
|
Mitigation
If
a transfer is to take place under Clause 14.7 then, without in any
way
limiting the rights of KfW under Clauses 8.5, 17.2 or 17.3, KfW shall
take
reasonable steps to mitigate any circumstances which arise and which
would
result in any amount becoming payable under or pursuant to Clauses
8.5,
17.2 or 17.3 and it shall co-operate in completing any procedural
formalities necessary for the Borrower to obtain authorisation to
make any
payment under Clauses 8.5, 17.2 or 17.3 without a deduction or
withholding.
|
15
|
The
Agent, the Security
Agent and the
Lenders
|
15.1
|
Appointment
|
15.1.1
|
Each
Lender appoints the Agent to act as its agent under and in connection
with
the Finance Documents and each Lender and the Agent appoints the
Security
Agent to act as its security agent for the purpose of the Security
Documents.
|
15.1.2
|
Each
Lender authorises the Agent and each Lender and the Agent authorises
the
Security Agent to exercise the rights, powers, authorities and discretions
specifically given to the Agent or the Security Agent (as the case
may be)
under or in connection with the Finance Documents together with any
other
incidental rights, powers, authorities and
discretions.
|
15.1.3
|
Except
where the context otherwise requires, references in this Clause 15
to the
"
Agent
"
shall mean the Agent and the Security Agent individually and
collectively.
|
15.2
|
Authority
Each
Lender irrevocably authorises the Security Agent (in the case of
Clause
15.2.1) and the Agent (in the case of Clauses 15.2.2, 15.2.3 and
15.2.4)
(in each case subject to Clauses 15.4 and 15.18):
|
15.2.1
|
to
execute any Finance Document (other than this Agreement) on its
behalf;
|
15.2.2
|
to
collect, receive, release or pay any money on its
behalf;
|
15.2.3
|
acting
on the instructions from time to time of the Majority Lenders (save
where
the terms of any Security Document expressly provide otherwise) to
give or
withhold any waivers, consents or approvals under or pursuant to
any
Finance Document; and
|
15.2.4
|
acting
on the instructions from time to time of the Majority Lenders (save
where
the terms of any Security Document expressly provide otherwise)
to
exercise, or refrain from exercising, any rights, powers, authorities
or
discretions under or pursuant to any Finance Document.
|
15.3
|
Trust
The
Security Agent agrees and declares, and each of the other Finance
Parties
acknowledges, that, subject to the terms and conditions of this Clause
15.3, the Security Agent holds the Trust Property on trust for the
Finance
Parties absolutely. Each of the other Finance Parties agrees that
the
obligations, rights and benefits vested in the Security Agent shall
be
performed and exercised in accordance with this Clause 15.3. The
Security
Agent shall have the benefit of all of the provisions of this Agreement
benefiting it in its capacity as security agent for the Finance Parties,
and all the powers and discretions conferred on trustees by the Trustee
Act 1925 (to the extent not inconsistent with this Agreement). In
addition:
|
15.3.1
|
the
Security Agent and any attorney, agent or delegate of the Security
Agent
may indemnify itself or himself out of the Trust Property against
all
liabilities, costs, fees, damages, charges, losses and expenses sustained
or incurred by it or him in relation to the taking or holding of
any of
the Trust Property or in connection with the exercise or purported
exercise of the rights, trusts, powers and discretions vested in
the
Security Agent or any other such person by or pursuant to the Security
Documents or in respect of anything else done or omitted to be done
in any
way relating to the Security Documents other than as a result of
its gross
negligence or wilful misconduct;
|
15.3.2
|
the
other Finance Parties acknowledge that the Security Agent shall be
under
no obligation to insure any property nor to require any other person
to
insure any property and shall not be responsible for any loss which
may be
suffered by any person as a result of the lack or insufficiency of
any
insurance; and
|
15.3.3
|
the
Finance Parties agree that the perpetuity period applicable to the
trusts
declared by this Agreement shall be the period of eighty years from
the
date of this Agreement.
|
15.4
|
Limitations
on authority
Except
with the prior written consent of all the Lenders, the Agent
shall not be
entitled
to:
|
15.4.1
|
release
or vary any security given for the Borrower's obligations under this
Agreement; nor
|
15.4.2
|
waive
the payment of any sum of money payable by any Security Party under
the
Finance Documents; nor
|
15.4.3
|
change
the meaning of the expressions "
Majority
Lenders
",
"
Margin
",
"
Commitment
Commission
"
or "
Default
Rate
";
nor
|
15.4.4
|
exercise,
or refrain from exercising, any right, power, authority or discretion,
or
give or withhold any consent, the exercise or giving of which is,
by the
terms of this Agreement, expressly reserved to the Lenders;
nor
|
15.4.5
|
extend
the due date for the payment of any sum of money payable by any Security
Party under any Finance Document;
nor
|
15.4.6
|
take
or refrain from taking any step if the effect of such action or inaction
may lead to the increase of the obligations of a Lender under any
Finance
Document; nor
|
15.4.7
|
agree
to change the currency in which any sum is payable under any Finance
Document (other than in accordance with the terms of the relevant
Finance
Document); nor
|
15.4.8
|
agree
to amend this Clause 15.4.
|
15.5
|
Liability
Neither
the Agent nor any of its directors, officers, employees or agents
shall be
liable to the Lenders for anything done or omitted to be done by
the Agent
under or in connection with any of the Relevant Documents unless
as a
result of the Agent's gross negligence or wilful
misconduct.
|
15.6
|
Acknowledgement
Each
Lender acknowledges that:
|
15.6.1
|
it
has not relied on any representation made by the Agent or any of
the
Agent's directors, officers, employees or agents or by any other
person
acting or purporting to act on behalf of the Agent to induce it to
enter
into any Finance Document;
|
15.6.2
|
it
has made and will continue to make without reliance on the Agent,
and
based on such documents and other evidence as it considers appropriate,
its own independent investigation of the financial condition and
affairs
of the Security Parties in connection with the making and continuation
of
the Loan;
|
15.6.3
|
it
has made its own appraisal of the creditworthiness of the Security
Parties; and
|
15.6.4
|
the
Agent shall not have any duty or responsibility at any time to provide
it
with any credit or other information relating to any Security Party
unless
that information is received by the Agent pursuant to the express
terms of
a Finance Document.
|
15.7
|
Limitations
on responsibility
The
Agent shall have no responsibility to any Security Party or to any
Lender
on account of:
|
15.7.1
|
the
failure of a Lender or of any Security Party to perform any of its
obligations under a Finance Document;
nor
|
15.7.2
|
the
financial condition of any Security Party;
nor
|
15.7.3
|
the
completeness or accuracy of any statements, representations or warranties
made in or pursuant to any Finance Document, or in or pursuant to
any
document delivered pursuant to or in connection with any Finance
Document;
nor
|
15.7.4
|
the
negotiation, execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of any Finance
Document or of any document executed or delivered pursuant to or
in
connection with any Finance
Document.
|
15.8
|
The
Agent's rights
The
Agent
may:
|
15.8.1
|
assume
that all representations or warranties made or deemed repeated by
any
Security Party in or pursuant to any Finance Document are true and
complete, unless, in its capacity as the Agent, it has acquired actual
knowledge to the contrary;
|
15.8.2
|
assume
that no Default has occurred unless, in its capacity as the Agent,
it has
acquired actual knowledge to the contrary;
|
15.8.3
|
rely
on any document or notice believed by it to be genuine;
|
15.8.4
|
rely
as to legal or other professional matters on opinions and statements
of
any legal or other professional advisers selected or approved by
it;
|
15.8.5
|
rely
as to any factual matters which might reasonably be expected to be
within
the knowledge of any Security Party on a certificate signed by or
on
behalf of that Security Party; and
|
15.8.6
|
refrain
from exercising any right, power, discretion or remedy unless and
until
instructed to exercise that right, power, discretion or remedy and
as to
the manner of its exercise by the Lenders (or, where applicable,
by the
Majority Lenders) and unless and until the Agent has received from
the
Lenders any payment which the Agent may require on account of, or
any
security which the Agent may require for, any costs, claims, expenses
(including legal and other professional fees) and liabilities which
it
considers it may incur or sustain in complying with those
instructions.
|
15.9
|
The
Agent's duties
The
Agent shall:
|
15.9.1
|
if
requested in writing to do so by a Lender, make enquiry and advise
the
Lenders as to the performance or observance of any of the provisions
of
any Finance Document by any Security Party or as to the existence
of an
Event of Default; and
|
15.9.2
|
inform
the Lenders promptly of any Event of Default of which the Agent has
actual
knowledge.
|
15.10
|
No
deemed knowledge
The
Agent shall not be deemed to have actual knowledge of the falsehood
or
incompleteness of any representation or warranty made or deemed repeated
by any Security Party or actual knowledge of the occurrence of any
Default
unless a Lender or a Security Party shall have given written notice
thereof to the Agent in its capacity as the Agent. Any information
acquired by the Agent other than specifically in its capacity as
the Agent
shall not be deemed to be information acquired by the Agent in its
capacity as the Agent.
|
15.11
|
Other
business
The
Agent may, without any liability to account to the Lenders, generally
engage in any kind of banking or trust business with a Security Party
or
with a Security Party's subsidiaries or associated companies or with
a
Lender as if it were not the Agent.
|
15.12
|
Indemnity
The
Lenders shall, promptly on the Agent's request, reimburse the Agent
in
their respective Proportionate Shares
,
for, and keep the Agent fully indemnified in respect of all liabilities,
damages, costs and claims sustained or incurred by the Agent in connection
with the Finance Documents, or the performance of its duties and
obligations, or the exercise of its rights, powers, discretions or
remedies under or pursuant to any Finance Document, to the extent
not paid
by the Security Parties and not arising solely from the Agent's gross
negligence or wilful misconduct.
|
15.13
|
Employment
of agents
In
performing its duties and exercising its rights, powers, discretions
and
remedies under or pursuant to the Finance Documents, the Agent shall
be
entitled to employ and pay agents to do anything which the Agent
is
empowered to do under or pursuant to the Finance Documents (including
the
receipt of money and documents and the payment of money) and to act
or
refrain from taking action in reliance on the opinion of, or advice
or
information obtained from, any lawyer, banker, broker, accountant,
valuer
or any other person believed by the Agent in good faith to be competent
to
give such opinion, advice or
information.
|
15.14
|
Distribution
of payments
The
Agent shall pay promptly to the order of each Lender that Lender's
Proportionate Share of every sum of money received by the Agent pursuant
to the Finance Documents (with the exception of any amounts payable
pursuant to Clause 9 and/or any Fee Letter and any amounts which,
by the
terms of the Finance Documents, are paid to the Agent for the account
of
the Agent alone or specifically for the account of one or more Lenders)
and until so paid such amount shall be held by the Agent on trust
absolutely for that Lender.
|
15.15
|
Reimbursement
The
Agent shall have no liability to pay any sum to a Lender until it
has
itself received payment of that sum. If, however, the Agent does
pay any
sum to a Lender on account of any amount prospectively due to that
Lender
pursuant to Clause 15.14 before it has itself received payment of
that
amount, and the Agent does not in fact receive payment within five
(5)
Business Days after the date on which that payment was required to
be made
by the terms of the Finance Documents, that Lender will, on demand
by the
Agent, refund to the Agent an amount equal to the amount received
by it,
together with an amount sufficient to reimburse the Agent for any
amount
which the Agent may certify that it has been required to pay by way
of
interest on money borrowed to fund the amount in question during
the
period beginning on the date on which that amount was required to
be paid
by the terms of the Finance Documents and ending on the date on which
the
Agent receives reimbursement.
|
15.16
|
Redistribution
of payments
Unless
otherwise agreed between the Lenders and the Agent, if at any time
a
Lender receives or recovers by way of set-off, the exercise of any
lien or
otherwise from any Security Party, an amount greater than that Lender's
Proportionate Share of any sum due from that Security Party to the
Lenders
under the Finance Documents (the amount of the excess being referred
to in
this Clause 15.16 and in Clause 15.17 as the "
Excess
Amount
")
then:
|
15.16.1
|
that
Lender shall promptly notify the Agent (which shall promptly notify
each
other Lender);
|
15.16.2
|
that
Lender shall pay to the Agent an amount equal to the Excess Amount
within
ten (10) days of its receipt or recovery of the Excess Amount;
and
|
15.16.3
|
the
Agent shall treat that payment as if it were a payment by the Security
Party in question on account of the sum due from that Security Party
to
the Lenders and shall account to the Lenders in respect of the Excess
Amount in accordance with the provisions of this Clause
15.16.
|
15.17
|
Rescission
of Excess Amount
If
all or any part of any Excess Amount is rescinded or must
otherwise be
restored to any Security Party or to any other third party,
the Lenders
which have received any part of that Excess Amount by way
of distribution
from the Agent pursuant to Clause 15.16 shall repay to
the Agent for the
account of the Lender which originally received or recovered
the Excess
Amount, the amount which shall be necessary to ensure that
the Lenders
share rateably in accordance with their Proportionate Shares
in the amount
of the receipt or payment retained, together with interest
on that amount
at a rate equivalent to that (if any) paid by the Lender
receiving or
recovering the Excess Amount to the person to whom that
Lender is liable
to make payment in respect of such amount, and Clause 15.16.3
shall apply
only to the retained amount.
|
15.18
|
Instructions
Where
the Agent is authorised or directed to act or refrain from acting
in
accordance with the instructions of the Lenders or of the Majority
Lenders
each of the Lenders shall provide the Agent with instructions within
three
(3) Business Days of the Agent's request (which request may be made
orally
or in writing). If a Lender does not provide the Agent with instructions
within that period, that Lender shall be bound by the decision of
the
Agent. Nothing in this Clause 15.18 shall limit the right of the
Agent to
take, or refrain from taking, any action without obtaining the
instructions of the Lenders or the Majority Lenders if the Agent
in its
discretion considers it necessary or appropriate to take, or refrain
from
taking, such action in order to preserve the rights of the Lenders
under
or in connection with the Finance Documents. In that event, the Agent
will
notify the Lenders of the action taken by it as soon as reasonably
practicable, and the Lenders agree to ratify any action taken by
the Agent
pursuant to this Clause 15.18.
|
15.19
|
Payments
All amounts payable to a Lender under this Clause 15 shall be paid
to such
account at such bank as that Lender may from time to time direct
in
writing to the Agent.
|
15.20
|
"Know
your customer" checks
Each
Lender shall promptly upon the request of the Agent supply, or procure
the
supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself) in order for the Agent to carry
out
and be satisfied it has complied with all necessary "know your customer"
or other similar checks under all applicable laws and regulations
pursuant
to the transactions contemplated in the Finance
Documents.
|
15.21
|
Resignation
Subject
to a successor being appointed in accordance with this Clause 15.21,
the
Agent may resign as agent and/or the Security Agent may resign as
security
agent at any time without assigning any reason by giving to the Borrower
and the Lenders notice of its intention to do so, in which event
the
following shall apply:
|
15.21.1
|
with
the consent of the Borrower not to be unreasonably withheld (but
such
consent not to be required at any time after an Event of Default
which is
continuing unremedied and unwaived) the Lenders may within thirty
(30)
days after the date of the notice from the Agent or the Security
Agent (as
the case may be) appoint a successor to act as agent and/or security
agent
or, if they fail to do so with the consent of the Borrower, not to
be
unreasonably withheld (but such consent not to be required at any
time
after an Event of Default which is continuing unremedied and unwaived),
the Agent or the Security Agent (as the case may be) may appoint
any other
bank or financial institution as its
successor;
|
15.21.2
|
the
resignation of the Agent or the Security Agent (as the case may be)
shall
take effect simultaneously with the appointment of its successor
on
written notice of that appointment being given to the Borrower and
the
Lenders;
|
15.21.3
|
the
Agent or the Security Agent (as the case may be) shall thereupon
be
discharged from all further obligations as agent and/or security
agent but
shall remain entitled to the benefit of the provisions of this Clause
15;
and
|
15.21.4
|
the
successor of the Agent or the Security Agent (as the case may be)
and each
of the other parties to this Agreement shall have the same rights
and
obligations amongst themselves as they would have had if that successor
had been a party to this Agreement.
|
15.22
|
No
fiduciary relationship
Except
as provided in Clauses 15.3 and 15.14, the Agent shall not have any
fiduciary relationship with or be deemed to be a trustee of or for
any
other person and nothing contained in any Finance Document shall
constitute a partnership between any two or more Lenders or between
the
Agent and any other person.
|
16
|
Set-Off
|
17
|
Payments
|
17.1
|
Payments
Each
amount payable by the Borrower under a Finance Document shall be
paid to
such account at such bank as the Agent may from time to time direct
to the
Borrower in the Currency of Account and in such funds as are customary
at
the time for settlement of transactions in the relevant currency
in the
place of payment. Payment shall be deemed to have been received by
the
Agent on the date on which the Agent receives authenticated advice
of
receipt, unless that advice is received by the Agent on a day other
than a
Business Day or at a time of day (whether on a Business Day or not)
when
the Agent in its reasonable discretion considers that it is impossible
or
impracticable for the Agent to utilise the amount received for value
that
same day, in which event the payment in question shall be deemed
to have
been received by the Agent on the Business Day next following the
date of
receipt of advice by the Agent.
|
17.2
|
No
deductions or withholdings
Each
payment (whether of principal or interest or otherwise) to be made
by the
Borrower under a Finance Document shall, subject only to Clause 17.3,
be
made free and clear of and without deduction for or on account of
any
Taxes or other deductions, withholdings, restrictions, conditions
or
counterclaims of any nature.
|
17.3
|
Grossing-up
If
at any time any law requires (or is interpreted to require) the Borrower
to make any deduction or withholding from any payment, or to change
the
rate or manner in which any required deduction or withholding is
made, the
Borrower will promptly notify the Agent and, simultaneously with
making
that payment, will pay to the Agent whatever additional amount (after
taking into account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is
necessary to ensure that, after making the deduction or withholding,
the
relevant Finance Parties receive a net sum equal to the sum which
they
would have received had no deduction or withholding been made.
|
17.4
|
Evidence
of deductions
If
at any time the Borrower is required by law to make any deduction
or
withholding from any payment to be made by it under a Finance Document,
the Borrower will pay the amount required to be deducted or withheld
to
the relevant authority within the time allowed under the applicable
law
and will, no later than thirty (30) days after making that payment,
deliver to the Agent an original receipt issued by the relevant authority,
or other evidence reasonably acceptable to the Agent, evidencing
the
payment to that authority of all amounts required to be deducted
or
withheld.
|
17.5
|
Rebate
If
the Borrower pays any additional amount under Clause 17.3, and a
Finance
Party subsequently receives a refund or allowance from any tax authority
which that Finance Party identifies as being referable to that increased
amount so paid by the Borrower, that Finance Party shall, as soon
as
reasonably practicable, pay to the Borrower an amount equal to the
amount
of the refund or allowance received, if and to the extent that it
may do
so without prejudicing its right to retain that refund or allowance
and
without putting itself in any worse financial position than that
in which
it would have been had the relevant deduction or withholding not
been
required to have been made. Nothing in this Clause 17.5 shall be
interpreted as imposing any obligation on any Finance Party to apply
for
any refund or allowance nor as restricting in any way the manner
in which
any Finance Party organises its tax affairs, nor as imposing on any
Finance Party any obligation to disclose to the Borrower any information
regarding its tax affairs or tax
computations.
|
17.6
|
Adjustment
of due dates
If
any payment or transfer of funds to be made under a Finance Document,
other than a payment of interest
on
a
Drawing
,
shall be due on a day which is not a Business Day, that payment
shall be
made on the next succeeding Business Day (unless the next succeeding
Business Day falls in the next calendar month in which event the
payment
shall be made on the next preceding Business Day). Any such variation
of
time shall be taken into account in computing any interest in respect
of
that payment.
|
17.7
|
Control
Account
The Agent shall open and maintain on its books a control account
in the
name of the Borrower showing the advance of the Loan
and the computation and payment of interest and all other sums due
under
this Agreement. The Borrower's obligations to repay the Loan
and to pay interest and all other sums due under this Agreement shall
be
evidenced by the entries from time to time made in the control account
opened and maintained under this Clause 17.7 and those entries will,
in
the absence of manifest error, be conclusive and
binding.
|
18
|
Notices
|
18.1
|
Communications
in writing
Any
communication to be made under or in connection with this Agreement
shall
be made in writing and, unless otherwise stated, may be made by fax
or
letter or (subject to Clause 18.6) electronic mail.
|
18.2
|
Addresses
The
address and fax number (and the department or officer, if any, for
whose
attention the communication is to be made) of each party to this
Agreement
for any communication or document to be made or delivered under or
in
connection with this Agreement are:
|
18.2.1
|
in
the case of the Borrower, c/o Teekay Shipping (Canada) Ltd Suite
2000,
Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C 2K2 (fax
no: +1
604 681 3011) marked for the attention of Director
Finance;
|
18.2.2
|
in
the case of each Lender, those appearing opposite its name in
Schedule 1;
|
18.2.3
|
in
the case of the Agent,
200
Park Avenue, 31
st
Floor, New York, New York 10166-0396, United States of America
(fax
no: +1 212 681 3900) marked for the attention of Credit, Sanjiv
Nayer/Erlend Bryn; and
|
18.2.4
|
in
the case of the Security Agent,
Domshof
17, 28195 Bremen, Federal Republic of Germany
(fax
no: + 49 421 3609 329) marked for the attention of
Credit Department;
|
18.3
|
Delivery
Any
communication or document made or delivered by one party to this
Agreement
to another under or in connection this Agreement will only be
effective:
|
18.3.1
|
if
by way of fax, when received in legible form;
or
|
18.3.2
|
if
by way of letter, when it has been left at the relevant address or
five
(5) Business Days after being deposited in the post postage prepaid
in an
envelope addressed to it at that address;
or
|
18.3.3
|
if
by way of electronic mail, in accordance with Clause
18.6;
|
18.4
|
Notification
of address and fax number
Promptly
upon receipt of notification of an address, fax number or change
of
address, pursuant to Clause 18.2 or changing its own address or fax
number, the Agent shall notify the other parties to this
Agreement.
|
18.5
|
English
language
Any
notice given under or in connection with this Agreement must be in
English. All other documents provided under or in connection with
this
Agreement must be:
|
18.5.1
|
in
English; or
|
18.5.2
|
if
not in English, and if so required by the Agent, accompanied by a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or
other
official document.
|
18.6
|
Electronic
communication
|
(a)
|
Any communication to be made in connection with this Agreement may be made by electronic mail or other electronic means, if the Borrower and the relevant Finance Party: |
(i)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication; |
(ii)
|
notify
each other in writing of their electronic mail address and/or
any other
information required to enable the sending and receipt of
information by
that means; and
|
(iii) | notify each other of any change to their address or any other such information supplied by them. |
(b)
|
Any electronic communication made between the Borrower and the relevant Finance Party will be effective only when actually received in readable form and acknowledged by the recipient (it being understood that any system generated responses do not constitute an acknowledgement) and in the case of any electronic communication made by the Borrower to a Finance Party only if it is addressed in such a manner as the Finance Party shall specify for this purpose. |
19
|
Partial
Invalidity
|
20
|
Remedies
and
Waivers
|
21
|
Miscellaneous
|
21.1
|
No
oral variations
No
variation or amendment of a Finance Document shall be valid unless
in
writing and signed on behalf of all the Finance
Parties.
|
21.2
|
Further
Assurance
If
any provision of a Finance Document shall be invalid or unenforceable
in
whole or in part by reason of any present or future law or any decision
of
any court, or if the documents at any time held by or on behalf of
the
Finance Parties or any of them are considered by the Lenders for
any
reason insufficient to carry out the terms of this Agreement, then
from
time to time the Borrower will promptly, on demand by the Agent,
execute
or procure the execution of such further documents as in the opinion
of
the Lenders are necessary to provide adequate security for the repayment
of the Indebtedness.
|
21.3
|
Rescission
of payments etc.
Any
discharge, release or reassignment by a Finance Party of any of the
security constituted by, or any of the obligations of a Security
Party
contained in, a Finance Document shall be (and be deemed always to
have
been) void if any act (including, without limitation, any payment)
as a
result of which such discharge, release or reassignment was given
or made
is subsequently wholly or partially rescinded or avoided by operation
of
any law.
|
21.4
|
Certificates
Any
certificate or statement signed by an authorised signatory of the
Agent
purporting to show the amount of the Indebtedness (or any part of
the
Indebtedness) or any other amount referred to in any Finance Document
shall, save for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that amount.
|
21.5
|
Counterparts
This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same
instrument.
|
21.6
|
Contracts
(Rights of Third Parties) Act 1999
A
person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy
the
benefit of any term of this
Agreement.
|
21.7
|
Disclosure
of Information
The
Borrower authorises each Lender to disclose any information and/or
document(s) concerning its relationship with such Lender (i) to
authorities in any other countries where such Lender or any Affiliate
is
represented and/or where any Lender or any Affiliate may be requested
information by any regulatory authority, when this shall be deemed
necessary in order for such Lender or any Affiliate to meet its
requirements for the contribution to reduction or prevention of money
laundering, terrorism and corruption, and (ii) to any Affiliate of
that
Lender making it possible to consolidate the client's total commitments
and offer the client any other products offered by that Lender or
any
Affiliate, subject always to the duties of confidentiality on the
Lenders
set out herein.
|
22
|
Law
and
Jurisdiction
|
22.1
|
Governing
law
This
Agreement shall in all respects be governed by and interpreted in
accordance with English law.
|
22.2
|
Jurisdiction
For
the exclusive benefit of the Finance Parties, the parties to this
Agreement irrevocably agree that the courts of England are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement and that any proceedings may be brought
in
those courts.
|
22.3
|
Alternative
jurisdictions
Nothing
contained in this Clause 22 shall limit the right of the Finance
Parties
to commence any proceedings against the Borrower in any other court
of
competent jurisdiction nor shall the commencement of any proceedings
against the Borrower in one or more jurisdictions preclude the
commencement of any proceedings in any other jurisdiction, whether
concurrently or not.
|
22.4
|
Waiver
of objections
The
Borrower irrevocably waives any objection which it may now or in
the
future have to the laying of the venue of any proceedings in any
court
referred to in this Clause 22, and any claim that those proceedings
have
been brought in an inconvenient or inappropriate forum, and irrevocably
agrees that a judgment in any proceedings commenced in any such court
shall be conclusive and binding on it and may be enforced in the
courts of
any other jurisdiction.
|
22.5
|
Service
of process
Without
prejudice to any other mode of service allowed under any relevant
law, the
Borrower:
|
22.5.1
|
irrevocably
appoints Teekay Shipping (UK) Ltd of 2
nd
Floor, 86 Jermyn Street, London SW1Y 6JD England as its agent for
service
of process in relation to any proceedings before the English courts
in
connection with this Agreement; and
|
22.5.2
|
agrees
that failure by a process agent to notify the Borrower of the process
will
not invalidate the proceedings
concerned.
|
DnB NOR Bank ASA
200
Park Avenue
31
st
Floor
New
York, NY10166
United
States of America
Fax
no. +1 212 681 4123
Attn:
Teresa Rosu
|
230,000,000
|
24.5
|
Fortis
Capital Corp.
520
Madison Avenue
New
York
NY
10022 USA
Fax
no: +1 212 340 5370
Attn:
Global Shipping Group
|
230,000,000
|
24.5
|
Nordea
Bank Finland PLC,
New
York Branch
437
Madison Avenue
New
York
NY
10022
Fax
no: +1 212 421 4420
Attention:
Shipping, Offshore and
Oil
Services Group
|
230,000,000
|
24.5
|
Deutsche
Schiffsbank
Aktiengesellschaft
Domshof
17
28195
Bremen
Federal
Republic of Germany
Fax
no: +49 421 3609 329
Attn:
Credit Department
|
125,000,000
|
13.25
|
Landesbank
Hessen-Thuringen
Girozentrale
New
York Branch
420
Fifth Avenue, 25
th
Floor
New
York
NY
10018-2729
U.S.A.
Fax
no: +1212 703 5256
Attn:
Shipping Finance
|
125,000,000
|
13.25
|
1
|
Security
Parties
|
(a)
|
Constitutional
Documents
Copies of the constitutional documents of each Security Party together
with such other evidence as the Agent may reasonably require that
each
Security Party is duly formed or incorporated in its country of formation
or incorporation and remains in existence with power to enter into,
and
perform its obligations under, the Relevant Documents to which it
is or is
to become a party.
|
(b)
|
Certificates
of good standing
A
certificate of good standing in respect of each Security Party (if
such a
certificate can be obtained).
|
(c)
|
Board
resolutions
A
copy of a resolution of the board of directors of each Security Party
(or
its sole member or general
partner):
|
(i)
|
approving
the terms of, and the transactions contemplated by, the Relevant
Documents
to which it is a party and ratifying or resolving that it execute
those
Relevant Documents; and
|
(ii)
|
if
required authorising a specified person or persons to execute those
Relevant Documents (and all documents and notices to be signed and/or
despatched under those documents) on its
behalf.
|
(d)
|
Officer's
certificates
A
certificate of a duly authorised officer or representative of each
Security Party certifying that each copy document relating to it
specified
in this Part I of Schedule 2 is correct, complete and in full force
and
effect as at a date no earlier than the date of this Agreement and
setting
out the names of the directors and officers of that Security Party
(or its
sole member or general partner) and the proportion of shares held
by each
shareholder.
|
(e)
|
Powers
of attorney
The
notarially attested and legalised (where necessary for registration
purposes) power of attorney of each Security Party under which any
documents are to be executed or transactions undertaken by that Security
Party.
|
(a)
|
Vessel
documents
In
respect of each Initial Vessel photocopies, certified as true, accurate
and complete by a duly authorised representative of the Borrower,
of any
relevant Management Agreement together with all addenda, amendments
or
supplements.
|
(b)
|
Evidence
of Owner's title
Evidence
that on the Drawdown Date (i) each of the Initial Vessels will be
registered under the flag stated in Schedule 7 in the ownership of
the
Owner and (ii) each of the relevant Mortgages will be capable of
being
registered against the Initial Vessels with first
priority.
|
(c)
|
Evidence
of insurance
Evidence
that each of the Initial Vessels is insured in the manner required
by the
Security Documents and that letters of undertaking will be issued
in the
manner required by the Security Documents, together with the written
approval of the Insurances by an insurance adviser appointed by the
Agent.
|
(d)
|
Security
Documents
The
Security Documents (other than those relating to the Step-up Vessels),
together with all other documents required by any of them, including,
without limitation, all notices of assignment and/or charge and evidence
that those notices will be duly acknowledged by the
recipients.
|
(e)
|
Other
Relevant Documents
Copies of each of the Relevant Documents (other than those relating
to the
Step-up Vessels) not otherwise comprised in the documents listed
in this
Part I of Schedule 2.
|
3
|
Legal
opinions
|
4
|
Other
documents and evidence
|
(a)
|
Drawdown
Notice
A
duly completed Drawdown Notice.
|
(b)
|
Process
agent
Evidence
that any process agent referred to in Clause 22.5 and any process
agent
appointed under any other Finance Document has accepted its
appointment.
|
(c)
|
Other
authorisations
A
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Agent considers to be necessary
or desirable (if it has notified the Borrower accordingly) in connection
with the entry into and performance of the transactions contemplated
by
any of the Relevant Documents or for the validity and enforceability
of
any of the Relevant Documents.
|
(d)
|
Fees
Evidence
that the fees, costs and expenses then due from the Borrower under
Clause
8 and Clause 9 have been paid or will be paid by the Drawdown
Date.
|
(e)
|
"Know
your customer" documents
Such documentation and other evidence as is reasonably requested
by the
Agent in order for the Lenders to comply with all necessary "know
your
customer" or similar identification procedures in relation to the
transactions contemplated in the Finance Documents.
|
1
|
Evidence
of Owner's title
Certificate
of ownership and encumbrance (or equivalent) issued by the Registrar
of
Ships (or equivalent official) of each Initial Vessel's flag
state
confirming that (a) each of the Initial Vessels is permanently
registered
under that flag in the ownership of the Owner, (b) each of the
relevant
Mortgages has been registered with first priority against the
Initial
Vessels and (c) there are no further Encumbrances registered
against the
Initial Vessels.
|
2
|
Letters
of undertaking
Letters
of undertaking in respect of the Insurances as required by the
Security
Documents (other than those relating to the Step-up Vessels)
together with
copies of the relevant policies or cover notes or entry certificates
duly
endorsed with the interest of the Finance
Parties.
|
3
|
Acknowledgements
of notices
Acknowledgements
of all notices of assignment and/or charge given pursuant to
the Security
Documents (other than those relating to the Step-up
Vessels).
|
4
|
Legal
opinions
Such
of the legal opinions specified in Part I of this Schedule
2 as have not
already been provided to the
Agent.
|
5
|
Companies
Act registrations
Evidence
that the prescribed particulars of the Security Documents
have been
delivered to the Registrar of Companies of England and
Wales and (where
relevant) the appropriate registry in Singapore within
the statutory time
limit.
|
6
|
Confirmation
of class
Certificates
of Confirmation of Class for hull and machinery confirming
that each of
the Initial Vessels is classed with the highest class
applicable to
vessels of her type with a Pre-Approved Classification
Society.
|
7
|
Structure
Such
documents and information as the Lenders may
require to satisfy themselves
as to the corporate structure of the Borrower
and the
Guarantor.
|
1
|
Security
Parties
|
A
certificate from a duly authorised officer or representative of the
Borrower confirming that none of the documents delivered to the Agent
pursuant to Schedule 2 Part I (a), (b), (c), (d) and (e) have been
amended
or modified in any way since the date of their delivery to the
Agent
.
|
2
|
Security
and related documents
|
(a)
|
Vessel
documents
In
respect of each Step-up Vessel photocopies, certified as true, accurate
and complete by a duly authorised representative of the Borrower,
of:
|
(i)
|
the
Bareboat Charters and any relevant Head Charters;
|
(ii)
|
any
relevant Management Agreement
|
(b)
|
Evidence
of Owner's title
Evidence
that on the Step-up Date (i) the Step-up Vessels will be registered
under
the flag stated in Schedule 7 in the ownership of the Owner and (ii)
each
of the relevant Mortgages will be capable of being registered against
the
Step-up Vessels with first
priority.
|
(c)
|
Evidence
of insurance
Evidence
that each of the Step-up Vessels is insured in the manner required
by the
Security Documents and that letters of undertaking will be issued
in the
manner required by the Security Documents, together with the written
approval of the Insurances by an insurance adviser appointed by the
Agent.
|
(d)
|
Security
Documents
The
Security Documents relating to the Step-up Vessels, together with
all
other documents required by any of them, including, without limitation,
all notices of assignment and/or charge and evidence that those notices
will be duly acknowledged by the
recipients.
|
(e)
|
Charterer's
Assignments
The Charterer's Assignments, duly executed, together with evidence
of the
signing authority of the relevant Charterer and all notices of assignment
and evidence that those notices have been or will be duly acknowledged
by
the recipient.
|
(f)
|
Quiet
Enjoyment Letters
Any relevant Quiet Enjoyment Letters, duly executed, together with
evidence of the signing authority of the Bareboat
Charterer.
|
(g)
|
Other
Relevant Documents
Copies of each of the Relevant Documents not otherwise comprised
in the
documents listed in Part I of Schedule 2 or this Part III of
Schedule 2.
|
3
|
Legal
opinions
|
4
|
Other
documents and evidence
|
(a)
|
Process
agent
Evidence
that any process agent appointed under any Finance Document relating
to
the Step-up Vessels has accepted its
appointment.
|
(b)
|
Other
authorisations
A
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Agent considers to be necessary
or desirable (if it has notified the Borrower accordingly) in connection
with the entry into and performance of the transactions contemplated
by
any of the Relevant Documents or for the validity and enforceability
of
any of the Relevant Documents.
|
(c)
|
Fees
Evidence
that the fees, costs and expenses then due from the Borrower under
Clause
8 and Clause 9 have been paid or will be paid by the Step-up
Date.
|
1
|
Evidence
of Owner's title
Certificate
of ownership and encumbrance (or equivalent) issued by the Registrar
of
Ships (or equivalent official) of each Step-up Vessel's flag state
confirming that (a) each of the Step-up Vessels is permanently
registered
under that flag in the ownership of the Owner, (b) each of the
relevant
Mortgages has been registered with first priority against the Step-up
Vessels and (c) there are no further Encumbrances registered against
the
Step-up Vessels.
|
2
|
Letters
of undertaking
Letters
of undertaking in respect of the Insurances as required by the
Security
Documents relating to the Step-up Vessels together with copies
of the
relevant policies or cover notes or entry certificates duly endorsed
with
the interest of the Finance
Parties.
|
3
|
Acknowledgements
of notices
Acknowledgements of all notices of assignment and/or charge
given pursuant
to the Security Documents relating to the Step-up
Vessels.
|
4
|
Legal
opinions
Such
of the legal opinions specified in Part III of this Schedule
2 as have not
already been provided to the Agent.
|
5
|
Companies
Act registrations
Evidence that the prescribed particulars of the Security
Documents have
been delivered to the Registrar of Companies of England
and Wales and
(where relevant) the appropriate registry in Singapore
within the
statutory time limit.
|
6
|
Confirmation
of class
Certificates of Confirmation of Class for hull and machinery
confirming
that each of the Step-up Vessels is classed with the
highest class
applicable to vessels of her type with a Pre-Approved
Classification
Society.
|
1
|
The
Mandatory Cost is an addition to the interest rate to
compensate the Lenders for the cost of compliance with
(a) the
requirements of the Bank of England and/or the Financial
Services
Authority (or, in either case, any other authority which
replaces all or
any of its functions) or (b) the requirements of the
European Central
Bank.
|
(a)
|
On
the first day of each Interest Period (or as soon as possible
thereafter)
the Agent shall calculate, as a percentage rate, a rate (the
"Additional Cost Rate"
)
for each Lender in accordance with the paragraphs set out
below. The
Mandatory Cost will be calculated by the Agent as a weighted
average of
the Lenders' Additional Cost Rates (weighted in proportion
to the
percentage participation of each Lender in the
Loan) and will be expressed as a percentage rate per
annum.
|
(b)
|
The
Additional Cost Rate for any Lender lending from
an office in the
euro-zone will be the percentage notified by that
Lender to the Agent to
be its reasonable determination of the cost (expressed
as a percentage of
that Lender's participation in the
Loan)
of complying with the minimum reserve requirements
of the European Central
Bank as a result of participating in the
Loan from that
office.
|
(c)
|
The
Additional Cost Rate for any Lender lending from an office
in the United
Kingdom will be calculated by the Agent as
follows:
|
|
where
F is the charge payable by that Lender to the Financial
Services Authority
under paragraph 2.02 or 2.03 (as appropriate) of the Fees
Regulations or
the equivalent provisions in any replacement regulations
(with, for this
purpose, the figure for the minimum amount in paragraph
2.02b or such
equivalent provision deemed to be zero), expressed in pounds
per £1
million of the fee base of that
Lender.
|
2
|
For
the purpose of this
Schedule:
|
(a)
|
"
eligible
liabilities
"
and "
special
deposits
"
have the meanings given to them at the time of application of the
formula
by the Bank of England;
|
(b)
|
"
fee
base
"
has the meaning given to it in the Fees
Regulations;
|
(c)
|
"
Fees
Regulations
"
means the regulations governing periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force
from
time to time in respect of the payment of fees for the acceptance
of
deposits.
|
3
|
If
a Lender does not supply the information required by the Agent to
determine its Additional Cost Rate when requested to do so, the applicable
Mandatory Cost shall be determined on the basis of the information
supplied by the remaining Lenders.
|
4
|
If
a change in circumstances has rendered, or will render, the formula
inappropriate, the Agent shall notify the Borrower of the manner
in which
the Mandatory Cost will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the absence of manifest
error, be binding on the Borrower.
|
To:
|
DnB
NOR Bank ASA
|
1
|
Terms
defined in the Loan Agreement shall, unless otherwise expressly
indicated,
have the same meaning when used in this certificate. The terms
"
Transferor
"
and "
Transferee
"
are defined in the schedule to this
certificate.
|
2
|
The
Transferor:
|
2.1
|
confirms
that the details in the Schedule under the heading "
Transferor's
Commitment
"
accurately summarise its Commitment
;
and
|
2.2
|
requests
the Transferee to accept by way of novation the transfer to the Transferee
of the amount of the Transferor’s Commitment specified in the Schedule by
counter-signing and delivering this certificate to the Agent at its
address for communications specified in the Loan
Agreement.
|
3
|
The
Transferee requests the Agent to accept this certificate as being
delivered to the Agent pursuant to and for the purposes of clause
14.4 of
the Loan Agreement so as to take effect in accordance with the
terms of
that clause on the Transfer Date specified in the
Schedule.
|
4
|
The
Agent confirms its acceptance of this certificate for the purposes
of
clause 14.4 of the Loan
Agreement.
|
5
|
The
Transferee confirms that:
|
5.1
|
it
has received a copy of the Loan Agreement together with all
other
information which it has required in connection with this
transaction;
|
5.2
|
it
has not relied and will not in the future rely on the Transferor
or any
other party to the Loan Agreement to check or enquire on
its behalf into
the legality, validity, effectiveness, adequacy, accuracy
or completeness
of any such information; and
|
5.3
|
it
has not relied and will not in the future rely on the
Transferor or any
other party to the Loan Agreement to keep under review
on its behalf the
financial condition, creditworthiness, condition, affairs,
status or
nature of any Security
Party.
|
6
|
Execution
of this certificate by the Transferee constitutes its representation
and
warranty to the Transferor and to all other parties to the Loan
Agreement
that it has the power to become a party to the Loan Agreement as
a Lender
on the terms of the Loan Agreement and has taken all steps to authorise
execution and delivery of this certificate.
|
7
|
The
Transferee undertakes with the Transferor and each of the other
parties to
the Loan Agreement that it will perform in accordance with their
terms all
those obligations which by the terms of the Loan Agreement will
be assumed
by it after delivery of this certificate to the Agent and the
satisfaction
of any conditions subject to which this certificate is expressed
to take
effect.
|
8
|
The
Transferor makes no representation or warranty and assumes
no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any document
relating to any Finance Document, and assumes no responsibility
for the
financial condition of any Finance Party or for the performance
and
observance by any Security Party of any of its obligations
under any
Finance Document or any document relating to any Finance Document
and any
conditions and warranties implied by law are expressly
excluded.
|
9
|
The
Transferee acknowledges that nothing in this certificate
or in the Loan
Agreement shall oblige the Transferor to:
|
9.1
|
accept
a re-transfer from the Transferee of the whole or any part of the
rights,
benefits and/or obligations transferred pursuant to this certificate;
or
|
9.2
|
support
any losses directly or indirectly sustained or incurred by the Transferee
for any reason including, without limitation, the non-performance
by any
party to any Finance Document of any obligations under any Finance
Document.
|
10
|
The
address and fax number of the Transferee for the purposes of clause
18 of
the Loan Agreement are set out in the
Schedule.
|
11
|
This
certificate may be executed in any number of counterparts each
of which
shall be original but which shall together constitute the same
instrument.
|
12
|
This
certificate shall be governed by and interpreted in accordance
with
English law.
|
1
|
Transferor
:
|
2
|
Transferee
:
|
3
|
Transfer
Date
(not earlier that the fifth Business Day after the date of
delivery of the
Transfer Certificate to the
Agent):
|
4
|
Transferor’s
Commitment
:
|
5
|
Amount
transferred
:
|
6
|
Transferee’s
address and fax number for the purposes of clause 18
of the Loan
Agreement
:
|
1.
|
We
refer to the Agreement. This is a Compliance Certificate. Terms defined
in
the Agreement have the same meaning when used in this Compliance
Certificate unless given a different meaning in this Compliance
Certificate.
|
2.1
|
we
maintain a Free Liquidity together with undrawn committed revolving
credit
lines available to us (including under the Loan Agreement but excluding
undrawn committed revolving credit lines with less than six (6) months
to
maturity) of not less than seventy five million Dollars ($75,000,000);
and
|
2.2
|
the
aggregate of the Free Liquidity and undrawn committed revolving credit
lines available to be drawn by us (including under the Loan Agreement,
but
excluding undrawn committed revolving credit lines with less than
six (6)
months to maturity) is not less than five per cent (5%) of our Total
Debt.
|
Signed:
|
…..................
|
Duly
authorised representative
|
|
of
|
|
Teekay
Offshore Operating L.P.
|
Vessel
|
Flag
|
Bareboat
Charter (where relevant)
|
Fuji
Spirit
|
Bahamas
|
|
Gotland
Spirit
|
Bahamas
|
|
Hamane
Spirit
|
Bahamas
|
|
Kilimanjaro
Spirit
|
Bahamas
|
|
Leyte
Spirit
|
Bahamas
|
|
Luzon
Spirit
|
Bahamas
|
|
Navion
Fennia
|
Bahamas
|
|
Navion
Torinita
|
Bahamas
|
|
Nordic
Marita
|
Bahamas
|
|
Navion
Svenita
|
Bahamas
|
|
Poul
Spirit
|
Bahamas
|
|
Torben
Spirit
|
Bahamas
|
Vessel
|
Flag
|
Bareboat
Charter (where relevant)
|
Basker
Spirit
|
Bahamas
|
|
Navion
Stavanger
|
Bahamas
|
Bareboat
Charter dated 16 January 2006 granted by TKN as charterer in favour
of FIC
and Transpetro as bareboat charterers.
|
Nordic
Brasilia
|
Bahamas
|
Bareboat
Charter dated 26 August 2003 granted by UNS as charterer in favour
of FIC
and Transpetro as bareboat charterers;
|
Nordic
Savonita
|
NIS
|
|
Nordic
Spirit
|
Bahamas
|
Bareboat
Charter dated 5 August 2002 granted by UNS as charterer in favour
of FIC
and Transpetro as bareboat charterers;
|
Petroatlantic
|
Bahamas
|
Bareboat
Charter dated 19 June 2000 between UNS as original owner and Petrojarl
Production (in its former name of PGS Production AS) as bareboat
charterer
as transferred pursuant to a transfer agreement dated 23 August 2004
entered into between UNS as original owner, Petroatlantic as new
owner,
Petrojarl Production as bareboat charterer and Petroleum Geo as guarantor
(with Petrojarl having replaced Petroleum Geo as guarantor by a release
and replacement agreement dated 22 March 2006) as further transferred
to
the Owner by a deed of assignment dated on or about the date hereof
between Petroatlantic, the Owner, Petrojarl Production and
Petrojarl;
|
Petronordic
|
Bahamas
|
Bareboat
Charter dated 19 June 2000 between UNS as original owner and Petrojarl
Production (in its former name of PGS Production AS) as bareboat
charterer
as transferred pursuant to a transfer agreement dated 23 August 2004
entered into between UNS as original owner, Petronordic as new owner,
Petrojarl Production as bareboat charterer and Petroleum Geo as guarantor
(with Petrojarl having replaced Petroleum Geo as guarantor by a release
and replacement agreement dated 22 March 2006) as further transferred
to
the Owner by a deed of assignment dated on or about the date hereof
between Petronordic, the Owner, Petrojarl Production and
Petrojarl;
|
Reduction
Dates
(months
after the earlier to occur of (i) the First Drawdown Date and
(ii)
31
October 2006)
|
Reductions
|
Committed
amount
|
Initial
Reduction Amounts
|
0
|
$940,000,000
|
0
|
|
6
|
1
st
reduction
|
$910,902,375
|
$29,097,625
|
12
|
2
nd
reduction
|
$880,909,998
|
$29,992,377
|
18
|
3
rd
reduction
|
$849,995,355
|
$30,914,643
|
24
|
4
th
reduction
|
$818,130,088
|
$31,865,267
|
30
|
5
th
reduction
|
$785,284,963
|
$32,845,125
|
36
|
6
th
reduction
|
$751,429,850
|
$33,855,113
|
42
|
7
th
reduction
|
$716,533,693
|
$34,896,157
|
48
|
8
th
reduction
|
$680,564,479
|
$35,969,214
|
54
|
9
th
reduction
|
$643,489,212
|
$37,075,267
|
60
|
10
th
reduction
|
$605,273,880
|
$38,215,332
|
66
|
11
th
reduction
|
$565,883,427
|
$39,390,453
|
72
|
12
th
reduction
|
$525,281,718
|
$40,601,709
|
78
|
13
th
reduction
|
$483,431,505
|
$41,850,213
|
84
|
14
th
reduction
|
$440,294,399
|
$43,137,106
|
90
|
15
th
reduction
|
$395,830,827
|
$44,463,572
|
96
|
16
th
reduction
|
$350,000,000
|
$45,830,827
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of TEEKAY OFFSHORE | ) |
|
OPERATING L.P. | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of DNB NOR BANK ASA (as a Lender) | ) |
|
SIGNED by | ) |
|
duly
authorised for and on behalf
|
) |
[signed]
|
of
DEUTSCHE
SCHIFFSBANK
|
) |
|
AKTIENGESELLSCHAFT
|
) |
|
(as
a Lender)
|
) |
|
SIGNED
by
|
) |
|
duly
authorised for and on behalf
|
) |
[signed]
|
of
LANDESBANK
HESSEN-THURINGEN
|
) |
|
GIROZENTRALE | ) |
|
(as
a Lender)
|
) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of DNB NOR BANK ASA (as a Agent) | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of
DEUTSCHE
SCHIFFSBANK
|
) |
|
AKTIENGESELLSCHAFT | ) |
|
(as the Security Agent) | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of DNB NOR BANK ASA (as an MLA) | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of
NORDEA
BANK NORGE ASA
|
) |
|
(as an MLA) | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of
DNB
NOR BANK ASA
|
) |
|
(as a bookrunner) | ) |
|
SIGNED by | ) |
|
duly authorised for and on behalf | ) |
[signed]
|
of
NORDEA
BANK NORGE ASA
|
) |
|
(as a bookrunner) | ) |
|